[Senate Hearing 110-508]
[From the U.S. Government Publishing Office]
S. Hrg. 110-508
THE EMPLOYEE FREE CHOICE ACT: RESTORING
ECONOMIC OPPORTUNITY FOR WORKING
FAMILIES
=======================================================================
HEARING
OF THE
COMMITTEE ON HEALTH, EDUCATION,
LABOR, AND PENSIONS
UNITED STATES SENATE
ONE HUNDRED TENTH CONGRESS
FIRST SESSION
ON
EXAMINING THE EMPLOYEE FREE CHOICE ACT, FOCUSING ON RESTORING ECONOMIC
OPPORTUNITY FOR WORKING FAMILIES
__________
MARCH 27, 2007
__________
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Pensions
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COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS
EDWARD M. KENNEDY, Massachusetts, Chairman
CHRISTOPHER J. DODD, Connecticut MICHAEL B. ENZI, Wyoming
TOM HARKIN, Iowa JUDD GREGG, New Hampshire
BARBARA A. MIKULSKI, Maryland LAMAR ALEXANDER, Tennessee
JEFF BINGAMAN, New Mexico RICHARD BURR, North Carolina
PATTY MURRAY, Washington JOHNNY ISAKSON, Georgia
JACK REED, Rhode Island LISA MURKOWSKI, Alaska
HILLARY RODHAM CLINTON, New York ORRIN G. HATCH, Utah
BARACK OBAMA, Illinois PAT ROBERTS, Kansas
BERNARD SANDERS (I), Vermont WAYNE ALLARD, Colorado
SHERROD BROWN, Ohio TOM COBURN, M.D., Oklahoma
J. Michael Myers, Staff Director and Chief Counsel
Katherine Brunett McGuire, Minority Staff Director
(ii)
C O N T E N T S
__________
STATEMENTS
TUESDAY, MARCH 27, 2007
Page
Kennedy, Hon. Edward M., Chairman, Committee on Health,
Education, Labor, and Pensions, opening statement.............. 1
Prepared statement........................................... 4
Isakson, Hon. Johnny, a U.S. Senator from the State of Georgia,
opening statement.............................................. 6
Prepared statement........................................... 8
Hohrein, Errol, Former Front Range Energy Employee, United
Steelworkers................................................... 9
Estlund, Cynthia L., Catherine A. Rein, Professor of Law, New
York University School of Law.................................. 11
Prepared statement........................................... 12
Mishel, Lawrence, Ph.D., President, Economic Policy Institute,
Washington, DC................................................. 18
Prepared statement........................................... 20
Hurtgen, Peter J., Partner, Morgan, Lewis and Bockius, LLP....... 24
Prepared statement........................................... 27
Clinton, Hon. Hillary Rodham, a U.S. Senator from the State of
New York....................................................... 36
Alexander, Hon. Lamar, a U.S. Senator from the State of Tennessee 38
Reed, Hon. Jack, a U.S. Senator from the State of Rhode Island... 39
Roberts, Hon. Pat, a U.S. Senator from the State of Kansas....... 41
Prepared statement........................................... 42
Brown, Hon. Sherrod, a U.S. Senator from the State of Ohio....... 43
Coburn, Hon. Tom, a U.S. Senator from the State of Oklahoma...... 45
Prepared statement........................................... 47
Obama, Hon. Barack, a U.S. Senator from the State of Illinois.... 47
Allard, Hon. Wayne, a U.S. Senator from the State of Colorado.... 50
Sanders, Hon. Bernard, a U.S. Senator from the State of Vermont.. 52
Hatch, Hon. Orrin G., a U.S. Senator from the State of Utah...... 53
ADDITIONAL MATERIAL
Statements, articles, publications, letters, etc.:
Senator Enzi................................................. 59
Senator Murray............................................... 61
Letter of Support............................................ 63
Letters of Opposition........................................ 63
CRS Memorandum............................................... 72
Response to questions of Senator Hatch and Senator Coburn by
Peter J. Hurtgen........................................... 73
Questions of Senator Hatch to Professor Cynthia L. Estlund... 79
(iii)
THE EMPLOYEE FREE CHOICE ACT: RESTORING ECONOMIC OPPORTUNITY FOR
WORKING FAMILIES
----------
TUESDAY, MARCH 27, 2007
U.S. Senate,
Committee on Health, Education, Labor, and Pensions,
Washington, DC.
The committee met, pursuant to notice, at 9:30 a.m. in Room
SD-430, Hart Senate Office Building, Hon. Edward Kennedy,
chairman of the committee, presiding.
Present: Senators Kennedy, Reed, Clinton, Obama, Sanders,
Brown, Alexander, Isakson, Hatch, Roberts, Allard, and Coburn.
Opening Statement of Senator Kennedy
The Chairman. We'll come to order this morning. We regret
very much that my good friend and colleague and Ranking Member,
Senator Enzi, is necessarily absent this morning with a
sickness in his family and we're all very hopeful and prayerful
that they'll get through that challenge. I talked to him last
night and he understands that the work goes on and we welcome
very much our good friend here, Senator Isakson, who will take
on that particular opportunity and I'm grateful to him.
The fundamental promise of the American Dream is that hard
work leads to success and a better life for families. It is a
vision of shared prosperity where we all work to expand the
economic pie and we all reap the benefits. Unfortunately, the
American dream has become a false hope for many working
families. America is no longer growing together. We have an
economy that works for Wall Street but not for Main Street.
Our hearings so far have demonstrated the growing
insecurity faced by millions of working Americans. Men and
women are working harder than ever, not receiving their fair
share of the Nation's prosperity. Since President Bush took
office, corporate profits have increased 65 percent,
productivity is up 18 percent but household income has declined
significantly and the wages of working Americans are stagnant.
Six million more have lost their health insurance and their
retirement security is fading as well.
Only one in five Americans today earns a guaranteed pension
and the American dream is increasingly out of reach. It is
trying to return to a world where workers obtain their fair
share of the Nation's economic growth. The best way to do this
is to give them a stronger voice in the workplace.
Unions were fundamental in building America's middle class
and they still have a vital role in preserving the American
dream. In 1960, the private sector union membership was at its
peak. All Americans shared in the Nation's rapid growing
prosperity. The rising tide of prosperity truly did lift all
the boats. Now, union membership has sunk to record lows and
working families are falling farther and farther behind.
Inequality is rising to record levels not seen since the
gilded age and only those at the very top are profiting from
our economic growth. Today we have a system where CEO's demand
the inflated salaries for themselves, but fight to keep workers
from having a voice on the job.
Our workplaces have become less democratic and the voices
of working people have been silenced. In 2005, more than 30,000
workers were illegally fired or retaliated against for trying
to exercise their right to have a union in the workplace. Every
17 minutes a worker is fired or punished illegally for
supporting a union. Unscrupulous employers routinely break the
law to keep unions out. They intimidate workers, harass them
and discriminate against them. They close down whole
departments or even entire plants to avoid negotiating a union
contract. It's illegal, it's unacceptable but it happens every
day.
It happens to workers like Jeff Lemon of Beaver County,
Pennsylvania, who worked in the Beaver County Times
Distribution Center. When he and his co-workers weren't given
the raise as promised by the company, they tried to form a
union as the NLRB to conduct an election. At that point the
company launched its anti-union crusade. Management threatened
to eliminate their jobs and replace them with outside
contractors. They forced everyone to sit in meetings and listen
to why the union shouldn't be allowed in. They spied on workers
and they distributed information about the union at community
events. They fired Jeff for his union activity.
Despite the threats and intimidation, the employees voted
for the union 2 years ago. They still don't have a contract
because the company keeps stalling and refusing to reach any
kind of an agreement. The National Labor Relations Board ruled
that Jeff was unlawfully fired for his union support and the
company is appealing the ruling and refusing to restore him to
his position. It could be years before he gets back the job he
needs.
Stories like Jeff are all too common. The current system is
broken. The law isn't protecting workers. The cops stop the
anti-worker tactics that take place every day. Penalties for
misconduct are so minor that employers treat them as just
another cost of business. The rules of the NLRB are so biased
that workers never get a chance to have their voices heard. The
atmosphere has become so tainted that it is impossible for
workers to make a free choice about whether they want a union.
That is why we need the Employee Free Choice Act. It will
make America stronger by improving our economy and restoring
security and prosperity to the American middle class. Union
wages are 30 percent higher than nonunion wages. Eighty percent
of union workers have health insurance compared to 49 percent
of nonunion workers. Union members are almost twice as likely
to have paid sick days--four times more likely to have a secure
and guaranteed pension. Unions mean the difference between an
economy that is fair and an economy where working people are
left behind.
The Employee Free Choice Act will fix our broken system by
leveling the playing field for employees in three critical
ways. It supports the right of workers to choose their own
representatives, requires employees to come to the table to
talk and it puts real teeth in the law by strengthening the
penalties for discrimination against workers who favor a union.
These reforms will enable hard working Americans to make
their own decisions about whether they want to bargain together
without the threat of harassment and retribution or fear of
losing their livelihood. It will empower American workers to
work together to ensure fair treatment on the job and build a
better life for their families.
The Employee Free Choice Act is about more than changing
our labor laws. It's about giving workers basic dignity and
respect in the workplace. It's the first of many steps we need
to restore the voice of the American worker, which has been
silenced for too long. I look forward to hearing from our
witnesses today.
I just want to show very, very quickly with these charts
what has happened basically to the middle class. If you look at
where we were coming out of World War II up to the 1970's, you
will see that all America grew together. These are the
quintiles that we see from the lowest quintile, the second
quintile, all the way up to the top quintile. All America, from
1947 to 1973, and this was the time of greatest union activity,
all America grew, all America worked together.
Then what happens from 1973, really 1980, when we had the
real assault on the unions, we saw the beginning of the
disparity of the different quintiles and now if you look at
what is the most recent one, you'll see where the growth is in
terms of the American economy--completely different. Those at
the lowest end are falling further behind. You could do a
parallel chart of what has happened to the trade union movement
during this period of time.
For years during the 1947 through 1973, when we had had an
increase in productivity, it was shared with wages. This
indicates the abuses of worker's rights that were on the rise,
you see, from 2000 up to 2005--a growing incidence.
These are the National Labor Relations Board's own figures
showing increasing dramatically the tax on workers who are
trying to form unions, a dramatic increase in this. This chart
shows the whole question of productivity. This chart goes back
to 2000 but you'll see they are basically together at the time
when we had the greatest time of common economic growth. As
productivity went up, wages went up.
Now when we find this explosion of productivity that we see
the increase in disparity. All of those are the economic
indicators--all those parallels of what is happened to the
trade union movement. That is one of the factors, I think, if
we are concerned about what is happening to working Americans,
concerned with what is happening to the middle class, it is
important to make sure that their voices are going to be heard
and they are going to be treated fairly.
[The prepared statement of Senator Kennedy follows:]
Prepared Statement of Senator Kennedy
The fundamental promise of the American Dream is that hard
work leads to success and a better life for families. It's a
vision of shared prosperity where we all work hard to expand
the economic pie, and we all reap the benefits. Unfortunately,
the American Dream has become a false hope for many working
families. America is no longer growing together. We have an
economy that works for Wall Street, but not for Main Street.
Our hearings so far have demonstrated the growing
insecurity faced by millions of working Americans. Men and
women are working harder than ever and not receiving their fair
share of the Nation's prosperity.
Since President Bush took office, corporate profits have
increased 65 percent. Productivity is up 18 percent. But
household income has declined significantly and the wages of
working Americans are stagnant. Six million more have lost
their health insurance, and their retirement security is fading
as well. Only 1 in 5 workers today earns a guaranteed pension.
The American dream is increasingly out of reach.
It's time to return to a world where workers obtain their
fair share of the Nation's economic growth. The best way to do
so is to give them a stronger voice in the workplace. Unions
were fundamental in building America's middle class, and they
still have a vital role today in preserving the American dream.
In 1960, when private sector union membership was at its peak,
all Americans shared in the Nation's rapidly growing
prosperity. The rising tide of prosperity truly did lift all
boats.
Now, union membership has sunk to record lows, and working
families are falling farther and farther behind. Inequality is
rising to record levels not seen since the gilded age, and only
those at the very top are profiting from our economic growth.
Today, we have a system where CEO's demand strong contracts
with inflated salaries for themselves, but fight to keep
workers from having a voice on the job.
Our workplaces have become less democratic and the voices
of working people have been silenced. The National Labor
Relations Board's 2005 annual statistics show that, in that
year, more than 30,000 workers received backpay from employers
based on illegal employer activity.
This is the Board's own data. I know there have been a
number of attempts to discredit these numbers, but such attacks
are based on faulty data.\1\ The simple fact is that
unscrupulous employers routinely break the law to keep unions
out--they intimidate workers, harass them, and discriminate
against them. They close down whole departments--or even entire
plants--to avoid negotiating a union contract. It's illegal and
it's unacceptable, but it happens every day.
---------------------------------------------------------------------------
\1\ An employer-backed organization misleadingly called the
``Center for Union Facts,'' for example, has claimed that employees are
illegally fired in only 1 or 2 percent of union campaigns. This report
is based on data collected from the National Labor Relations Board's
Case Activity Tracking System (``CATS''), not the Board's own annual
statistics cited above. The committee contacted the Board about this
data and was informed in an e-mail from an NLRB Associate General
Counsel dated March 26, 2007 that the CATS system ``is not able to
provide reliable data with respect to the occurrence of unfair labor
practices during union organizing campaigns for fiscal years before
fiscal year 2007.'' The official explained that, ``While the data entry
screens [in the CATS system] . . . do contain a field to be selected by
our personnel when an unfair labor practice case arises in the course
of an organizing campaign, that field has not been utilized routinely
because the data was not necessary for case processing. Therefore, that
data in CATS is unreliable'' for the purpose of collecting data about
unfair labor practices during organizing campaigns.
---------------------------------------------------------------------------
It happens to workers like Jeff Lemon of Beaver County,
Pennsylvania, who worked in the Beaver County Times
distribution center. When he and his co-workers weren't given
the raises promised by the company, they tried to form a union
and asked the National Labor Relations Board to conduct an
election. At that point, the company launched its anti-union
crusade. Management threatened to eliminate their jobs and
replace them with outside contractors. They forced everyone to
sit in meetings and listen to why the union shouldn't be
allowed in. They spied on workers when they distributed
information about the union at community events. And they fired
Jeff for his union activity.
Despite the threats and intimidation, the employees voted
for the union 2 years ago. But, they still don't have a
contract, because the company keeps stalling and refusing to
reach any kind of agreement. The National Labor Relations Board
ruled that Jeff was unlawfully fired for his union support, and
the company is appealing the ruling and refusing to restore him
to his position. It could be years before he gets back the job
he needs.
Stories like Jeff's are all too common. The current system
is broken. The law isn't protecting workers, and it can't stop
the anti-worker tactics that take place every day. Penalties
for misconduct are so minor that employers treat them as just
another cost of doing business. The rules of the NLRB are so
biased that workers never get a chance to have their voices
heard. The atmosphere becomes so tainted that it's impossible
for workers to make a free choice about whether they want a
union.
That's why we need the Employee Free Choice Act. It will
make America stronger by improving our economy, and restoring
security and prosperity to the American middle class. Union
wages are 30 percent higher than non-union wages. Eighty
percent of union workers have health insurance, compared to
only 49 percent of non-union workers. Union members are almost
twice as likely to have paid sick days, and are four times more
likely to have a secure, guaranteed pension. Unions mean the
difference between an economy that's fair, and an economy where
working people are left behind.
The Employee Free Choice Act will fix our broken system by
leveling the playing field for employees in three critical
ways. It supports the right of workers to choose their own
representative. It requires employers to come to the table to
talk. And it puts real teeth in the law by strengthening the
penalties for discrimination against workers who favor a union.
These reforms will enable hardworking Americans to make
their own decision about whether they want to bargain
together--without the threat of harassment and retribution, or
the fear of losing their livelihood. It will empower American
workers to work together to ensure fair treatment on the job
and build a better life for their families.
The Employee Free Choice Act is about more than changing
our labor laws--it's about giving workers basic dignity and
respect in the workplace. As former Secretary of Labor Ray
Marshall wrote in a letter of support that I will include with
my testimony today, this bill ``is important to all Americans,
not just to workers. We are not likely to have either sound
public policies or fair and effective work practices if
millions of American workers' voices remain unheard.''
This bill is the first of many steps we need to take to
restore the voice of the American worker, which has been
silenced for far too long. I look forward to hearing from our
witnesses today about this important bill and how we can best
help America's working families build a better life and a
better future for themselves and their children.
[The letter referenced above may be found in additional material.]
Senator Kennedy. Senator Isakson.
Statement of Senator Isakson
Senator Isakson. Well first of all, I want to send our
thoughts and prayers to Ranking Member Enzi who has a personal
family situation that we all share in wishing him the very best
on that. I want to thank Senator Kennedy for calling this
hearing and allowing us to talk and get all the facts out on
the table on this important issue and I particularly want to
thank all our panelists for being here. I have apologized
already to them because I have to jump up after my remarks and
run to the Veteran's Committee to introduce three Iraqi wounded
veterans from Georgia but I'll be right back then so it is not
that I am not interested--it is only that I have two duties at
the same time.
Particularly I want to also recognize the NLRB former
Chairmen, Peter Hurtgen. Peter, thank you for being here--a
Clinton appointee and long time servant to the country--we
appreciate it.
Often we, as Republicans and Democrats, will share a goal,
say ending poverty or making the workplace safer, but we will
differ on methods of achieving it. This is not such a day. I
simply do not share the desire of this bill's proponents to
remove worker's fundamental rights.
Let us be clear, the legislation cleverly named ``The
Employee Free Choice Act,'' would radically change the way
millions of employees decide whether or not they want a union
to become their exclusive representative in the workplace. In
the vast majority of instances over the past seven decades, the
critical decision has been made through one of the most
fundamental institutions of our democracy, the secret ballot,
which is the private possession of every individual worker. In
a democratic society, nothing is more sacred than the right to
vote and nothing ensures truly free choice more than the use of
the secret ballot.
Thousands of Americans have died and given their lives to
ensure the constitutional guarantees of a right to vote and the
assurance of the privacy of that vote and that it is owned by
the voter, not a union, not the company and not the country.
This bill would create a tort type remedy system that would
bring a smile to any lawyer's face. The vast majority of labor
management disputes are voluntarily resolved. A tort type
system, while it will certainly keep trial lawyers busy, will
clog the system with litigation and simply delay the resolution
of claims.
This bill also seriously infringes on due process and the
right to manage a private business through its mandatory
injunctive provision. If an individual claimed that he was
terminated because of his union sentiments, the bill would
require that he return to work before the merits of his claim
were resolved. We rightly outlaw employment discrimination on
the basis of age, sex, religion and national origin but do not
require individuals claiming to have been discharged on these
bases to return to work before the merits of their claims are
determined and we should not do so.
There is no basis for dramatic change. We are told that
taking away private ballots is necessary because the election
process, overseen by NLRB, is increasingly tilted against
unions. However, the claim simply does not withstand
examination. The fact is that for the last decade, unions have
been winning a steadily increasing number of NLRB certification
elections. In fact, in fiscal year 2005, unions won over 61
percent of the time, a rate as high as it has ever been before.
We are also told that employers are making elections unfair.
These charges don't stand up either.
The NLRB guarantees the right of free speech to all parties
involved in union elections. Free speech, open debate, the free
exchange of ideas and opinions are, like the private election
ballot, hallmarks of a free and fair democratic society.
We are told we need to remove a worker's right to a private
ballot because of rampant employer coercion. The law already
prohibits conduct in the context of union organization that is
coercive or threatening. The NLRB scrupulously polices the
conduct of both unions and employers during an organizing
election and can invalidate any election if either party
engages is misconduct or coercion. The rate of elections
invalidated because of misconduct by either side is
extraordinarily low and has, in fact, been declining.
In 2005, over 2,300 certification elections were conducted
by NLRB. However, the NLRB conducted rerun elections because of
misconduct by either the employer or the union in only 19 cases
out of 2,300.
We are told the current low membership levels in unions
must be due to unfair law or unfair NLRB election procedures.
Sorry, those arguments don't hold either. The NLRB has not
changed in nearly 50 years. The law and procedures governing
union organization are the same as they were years ago when
unions enjoyed the highest level of membership among private
sector employees.
In conclusion, it has never been the role of government or
the purpose of Federal labor policy to affect the level of
union membership among private sector employees. Federal labor
laws on this issue have always been neutral. It has always been
clear that it was the employee's decision and their right to
decide. The private ballot is sacred. This bill passed the
House without nearly enough debate and I thank Senator Kennedy
very much for affording us the opportunity to express our
opinions today on this important issue before this Congress and
the American people.
[The prepared statement of Senator Isakson follows.]
Prepared Statement of Senator Isakson
First, I know we all want to send our thoughts and prayers
to Mike Enzi, who cannot be here today as he attends to a
family situation.
I want to thank Chairman Kennedy for holding this hearing
and offering us the opportunity to get all the facts out on the
table.
I welcome our panel, especially the distinguished former
Chair of the National Labor Relations Board, Peter Hurtgen.
Often we as Republicans and Democrats will share a goal,
say ending poverty or making workplaces safer, but differ on
the methods of achieving it. This is no such day. I simply do
not share the desire of this bill's proponents to remove
workers' fundamental rights.
Let us be clear. This legislation, the cleverly named
``Employee Free Choice Act,'' would radically change the way
that millions of employees decide whether or not they want a
union to become their exclusive representative in the
workplace.
Currently, this decision has been made through one of the
most fundamental institutions of our democracy--the private
ballot.
Many critics of the bill are almost too focused on this
first part of the bill, but as I read through the legislation,
it only gets worse, not better. This bill would require the
government to intrude upon the private negotiations between
labor and management. Essentially, a government bureaucrat will
be writing the contract for every unionized employer in
America. Moreover, the bill would create a tort-type remedy
system that would delight any trial lawyer.
The proponents of this legislation decry the decline in the
number of workers who choose to cede their rights to the
unions. Less unionized workers means less members' dues. That's
why we're here. Union dues, whether taken from the employee's
paycheck voluntarily or taken, in some cases, involuntarily in
non-right-to-work States, are the only source of union income.
We in Congress should let workers decide for themselves
whether joining a union is right for them, not decide for them,
as the so-called Employee Free Choice Act would require. That
is why the National Labor Relations Act specifically provides
in its ``bill of rights'' section that employees have both the
right to form and join labor organizations and the right not to
do so.
This bill passed the House without nearly enough debate. We
will see that this proposal receives much greater scrutiny here
in the Senate.
I look forward to hearing the testimony from our witnesses.
The Chairman. Thank you very much, Senator Isakson. We will
now hear from our panel. Errol Hohrein has worked as a
boilermaker for over 20 years. He is a Vietnam veteran and
father of three. In March 2006, he began a job at the Front
Range Energy in north Colorado after unsuccessfully voicing his
concern to management on workplace safety issues and salaries
and benefit issues. And his fellow workers decided to organize
formal union with steelworkers in order to improve working
conditions. He was fired shortly after the successful union
election.
The NLRB recently issued a complaint finding probable cause
to believe that Mr. Hohrein's termination violated the law.
I am going to introduce each person as they are recognized
rather than our whole group. We look forward to hearing from
you. Thank you very much for joining us.
Mr. Hohrein.
STATEMENT OF ERROL HOHREIN ENERGY EMPLOYEE, UNITED
STEELWORKERS, GREELY, COLORADO
Mr. Hohrein. Chairman Kennedy and the members of the
committee--I'm sorry.
The Chairman. Relax now, Errol. Errol, just relax now.
Mr. Hohrein. OK.
The Chairman. Take a deep breath here.
Mr. Hohrein. All right.
The Chairman. Pretend you're back out there in Northern
Colorado. We are here to listen to you so just relax. Thank you
very much for coming.
Mr. Hohrein. Mr. Chairman and members of the committee,
good morning. Thank you for inviting me to participate in this
important hearing on workers' rights.
My name is Errol Hohrein. I live in Greeley, Colorado. I've
been married for 21 years and I have two sons and a daughter. I
served in Vietnam and was honorably discharged after losing a
majority of my hearing as a result of an explosion. For more
than 20 years, I have been a boilermaker.
Last year, I began working at Front Range Energy to help
start up their $50 million ethanol distillery in Northern
Colorado. Like many of my co-workers, I was hired with the
promise of good pay, affordable health benefits and a safe
working environment.
Workplace safety has always been a top priority for me. A
boilermaker's work environment can be very hazardous. We often
work with dangerous equipment, such as flame cutting torches,
power grinders and large cranes. From every direction, there's
risk of injury and in some cases, death. While at Front Range
Energy, I began to notice potential safety risks. I went to
management several times with my concerns about leaks in the
ammonia tanks, leaks in steam systems and the inadequate
storage of reactive chemicals. But my requests fell on deaf
ears.
I quickly discovered that this was not the last of my
problems at Front Range. Despite the distillery's monthly
million dollar profits, the company callously reneged on their
pledge of wage increases and benefits. It was theft by
deception. We were shorted on wages and to make matters worse,
the company's medical benefits were priced at over $900 a
month--almost half of our paychecks. One co-worker wrote a
letter to management about having been shorted on his paycheck
and days later he was fired.
I was a union man for years. In fact, my grandfather,
father, brother and all--have all been union boilermakers. I
knew what a difference a union could make. I knew the value of
coming together with co-workers to bargain for better work
standards.
My co-workers were worried about workplace safety and fed
up with the company's misrepresentations about wages and
benefits and they were aware of my union background. So they
came to me to ask about how we could go about forming a union.
I have to say, I was reluctant at first because of how hard I
knew this would be but my co-workers were adamant about having
fairness on the job. We decided to organize and form a union
with the United Steelworkers to improve our working conditions.
Once the company found out that we were organizing,
management began trying to intimidate us, targeting those of us
who were active union supporters. They forced us to attend
meetings where they slammed the union and where we were not
allowed to say much. Following one meeting, I was written up
for insubordination. They threatened that if our campaign was
successful, our paychecks may suffer. Managers would follow me
around the workplace at all times. They would not permit other
workers to talk to me. They isolated me from my co-workers.
I used to hand out information to co-workers in the break
room, the only place the company would allow us to do so. One
day while handing out information to co-workers on the union
during my break, management ordered me to stop and threatened
to fire me.
We held our election on December 18 and 20, 2006 to
accommodate shift schedules. On both election days, the plant
manager hung out by the break room where we voted, reminding us
with his presence of prior threats about what might happen if
we were to vote in the union.
Despite Front Range Energy's intimidation tactics and other
efforts to keep us from organizing, we won our union. But for
me, victory was short-lived. The threat was real. Within days
after the union election was certified by the NLRB, I was
fired.
I've filed a challenge with the NLRB and it could be years
before I get my job back. But my organizing efforts at Front
Range have not ended. My commitment doesn't end until we get
our first union contract. I'm now sitting at the USW bargaining
table to negotiate. The company is all smiles, but I know
better. We won't get a first contract until the Employee Free
Choice Act is passed by this Congress with a mechanism that
gets the job done.
I'm no troublemaker. I served my country in Vietnam, I've
worked with youth as a junior high school history teacher, my
wife is a special education administrator, I've raised three
terrific children and I have one flaw--I tell the truth.
Labor law in this country is broken. It doesn't support
working people and we're paying a terrible price for it. No
matter what the Board rules in my case, I will lose. We're on
the brink and no one's looking out for us. It's no secret that
a union contract is the best economic program for uplifting
working people in this country. What the Employee Free Choice
Act does is restore the choice to bargain for a better life for
people like me who have been robbed of that choice.
Our government needs to take action and do the right thing
where working people are concerned. Our leaders need to pass
the Employee Free Choice Act. Thank you for letting me testify.
The Chairman. Thank you very much, Errol. Our next witness
is Cindy Estlund, who is a Catherine A. Rein Professor of Law
at New York University School of Law and leading scholar of
labor employment laws. She has written extensively on the
relationship between the workplace and democracy. In recent
work, she has focused on the current crisis workplace
governance brought about by the decline of collective
bargaining. Professor Estlund is a graduate Lawrence University
and Yale Law School. Prior to entering law teaching, she
practiced law at the labor law firm, Bredhoff and Kaiser. Her
recent publication, The Ossification of American Law,
Rebuilding the Law of the Workplace in an Era of Self-
Regulation and the book, Working Together: How Workplace Bonds
Strengthen Democracy. Thank you very much, Professor, for being
here.
STATEMENT OF CYNTHIA L. ESTLUND, CATHERINE A. REIN, PROFESSOR
OF LAW, NEW YORK UNIVERSITY SCHOOL OF LAW
Ms. Estlund. Thank you, Senator. Good morning. The mic
doesn't work.
The Chairman. If the little light is on, you're in.
Ms. Estlund. Got it. As Senator Kennedy just mentioned,
much of my scholarship since 1989 has been on serious
weaknesses in the Nation's labor laws. The most serious is the
law's inadequate response to the increasingly fierce anti-union
campaigns that employers have mounted with the help of high
paid anti-union consultants.
The problem is both illegal and legal conduct. Far too many
employers break the law. They fire union activists, threaten
mass layoffs or a shutdown, they spy on pro-union workers, or
bribe employees to vote no. The law's response to employer
illegality has been far too little and too late. Most
violations result in a slap on the wrist, maybe a rerun
election many years after the union campaign has been defeated.
Even anti-union discharges result, generally only in very small
back pay awards after years of delay and no penalties.
Meanwhile, the employer gets the benefit of its wrongdoing
by keeping the union out. As a result, union organizers can no
longer assure employees that the law will stand behind them if
they exercise their right to join a union. Employers can afford
to treat the risk of legal sanctions as an acceptable cost of
doing business. But the problem is not just employers who break
the law.
Employers' control of the workplace and their power over
workers gives them overwhelming advantages, built in
advantages, that no incumbent has in a political election. They
can ban union organizers from the workplace, including the
parking lot. They can lawfully bombard employees day after day
with anti-union propaganda in mandatory meetings often one on
one with the employee's own supervisors.
Many employers violate the law with near impunity, but
employers can and do create an egregiously hostile environment
for union supporters even without breaking the law.
The Employee Free Choice Act would begin to fix this badly
broken system. It would provide meaningful remedies and in
appropriate cases, penalties for serious employer misconduct
during the organizing process. And it would reduce employers'
opportunity to mount these fierce anti-union campaigns by
allowing employees to secure union representation on the basis
of majority signup.
I'll focus here on majority signup, which has attracted the
most attention. First, the Board has always relied on
authorization cards to determine majority sentiment in some
circumstances although mainly at the option of the employer.
The law allows the employer to rely on valid authorization
cards to recognize a new union if it chooses and it allows or
even requires employers to withdraw recognition from an
existing union if the employer knows on the basis of cards or
otherwise that a majority doesn't support the union. Yet, the
law does not allow employees and unions to rely on valid
authorization cards to secure union representation. This bill
would change that.
The reason for this change is that the formal campaign has
become a gross caricature of democracy in which employers hack
away for months at employee's support for the union by illegal
and legal means. If the only problem were employee's fear of
individual reprisals based on the vote they cast at the end of
the day then the secret ballot might seem to be the obvious and
democratic answer. But the modern anti-union campaign, which
has been honed by legions of highly paid consultants, makes the
secret ballot a wholly inadequate guarantee against employer
intimidation.
There are two reasons for that. First, a main goal of the
employer campaign is to discover every employee's union
sympathies well ahead of the election, for example, through
repeated mandatory one on one meetings. After that sort of
campaign, the secret ballot is a fiction. It gives a misleading
semblance of democracy to something that is really very
different. Second, the secret ballot is no protection at all
against employee's fear of adverse consequences for the workers
as a group and that is another mainstay of the modern anti-
union campaign.
Employees are told the employer will close or relocate the
business, that employees will lose existing benefits and that
the workplace will become a site of constant conflict. The
secret ballot does nothing to protect against those types of
fears.
Opponents of the bill claim that secret ballots are needed
to protect against union coercion in securing cards. No doubt
such coercion could happen. It is illegal. It renders the cards
invalid and the union loses everything as a result. That is a
very powerful deterrent against union coercion. In fact, there
is very little evidence of a problem in the many, many years in
which authorization cards have been relied upon by the Board.
A study of recent representation campaigns found the
employees experienced less pressure from any source in card
check than in election campaigns and much less pressure from
unions and employers in either election or card check
campaigns.
The current system is badly broken. The law that governs
the representation process helps to explain why a third or a
half of nonmanagerial employees who don't have a union wish
that they did. This bill would help restore some balance to the
system and allow employees to gain the collective voice that
they say they want and that they need to bargain for decent
wages and working conditions. Thank you very much.
[The prepared statement of Ms. Estlund follows:]
Prepared Statement of Cynthia L. Estlund
My name is Cynthia Estlund, and I am a law professor at the New
York University School of Law. Since 1989, after several years of
practicing labor law at the firm of Bredhoff & Kaiser here in
Washington, I have studied, taught, and written about labor and
employment law at the University of Texas School of Law, Columbia Law
School, and now at NYU. I have published and lectured extensively on
the law of the workplace. A significant part of my scholarship has
addressed the serious weaknesses of our Nation's labor laws and
particularly the law of the organizing and representational process.
I. WHY REFORM IS NEEDED
Congress has not revisited the core of the National Labor Relations
Act (NLRA) since 1947, when President Truman was in office, the U.S.
economy and its manufacturing base were unrivaled, and nearly one-third
of the workforce was represented by unions. Much has changed. The
system is now seriously broken, and it needs fixing.
There are many problems with the labor laws, and this bill only
addresses a few of them. But it does address one of the major problems
with the statute, and that is the law's wholly inadequate response to
employers' fiercely aggressive and often illegal response to union
organizing drives.
Any discussion of union organizing, and of fair ground rules for
determining employees' choices about representation, has to begin with
a few facts that the law is not going to change: The employer owns the
workplace, runs the business, determines its scope and its location,
establishes the rules, and hires and fires its workers. And all those
things will remain true if the union wins its bid for representation.
Unlike a political election, the incumbent employer that ``loses'' a
representation contest retains its position and power over the voters.
So when workers are told that the employer strongly opposes
unionization, what many are bound to hear is that union supporters will
be deemed traitors and dealt with accordingly, or that the employer
will move or shut down its operations to avoid dealing with a union.
Many employers faced with an organizing effort explicitly threaten job
loss. About half of the employers faced with a union organizing
campaign threaten to close or relocate all or part of their business in
the event of a union victory.\1\ Employees fear job loss even without
any explicit threats. A commission headed by John Dunlop, former
Secretary of Labor under President Ford, reported that 40 percent of
non-union, non-managerial employees believed that their own employer
would fire or otherwise mistreat them if they campaigned for a
union.\2\ Unfortunately, those beliefs are not unfounded. Studies have
found that between 25 and 30 percent of employers faced with an
organizing drive fired at least one union activist.\3\ A recent study
using rather conservative assumptions and methods estimated that about
one in five active union supporters was discriminatorily fired during
organizing campaigns in 2005.\4\ Whatever uncertainty there may be
about the exact numbers, it is safe to say that thousands of employees
have been fired in the last 10 years alone for their legally-protected
union organizing efforts. Union organizers can no longer assure
employees that the law will protect them if they support the union.
---------------------------------------------------------------------------
\1\ Chirag Mehta & Nik Theodore, Undermining the Right to Organize,
Employer Behavior During Union Representation Campaigns, p. 5 (American
Rights at Work, 2005).
\2\ See Dunlop Comm'n on the Future of Worker-Mgmt. Relations, Fact
Finding Report 75 (1994).
\3\ Id. at 70; Mehta & Theodore, supra note 1, at p. 9.
\4\ See John Schmitt & Ben Zipperer, Dropping the Ax: Illegal
Firings During Union Election Campaigns, p. 1 (Center for Economic &
Policy Research 2007).
---------------------------------------------------------------------------
What does the law do about it? Of course, the law does nothing
unless Board officials can prove a discriminatory motive on the part of
an employer who creates and controls nearly all the relevant documents
and employs nearly all the relevant witnesses. Even if those hurdles
are overcome and an employee is found to have been illegally
discharged, often years after the discharge, the employee may be
granted reinstatement (rarely implemented when years have gone by) and
backpay (minus any wages the employee has earned, or should have
earned, in the meantime). In many cases that amounts to almost nothing.
The employee does not get traditional compensatory damages or punitive
damages, and no fines are assessed. In the meantime, the damage to the
organizing effort has long been done, and the law does nothing to
repair that.
When comparing these remedies to what is available under other
Federal antidiscrimination statutes, one can only conclude that the law
doesn't regard anti-union discrimination, a violation of Federal law
since 1935, as all that bad.
One study of the U.S. labor laws for a major international human
rights organization concluded that ``many employers realize they have
little to fear from labor law enforcement through a ponderous, delay-
ridden legal system with meager remedial powers.'' \5\ The law's pallid
response to illegality has led many employers to regard the prospect of
legal sanctions ``as a routine cost of doing business, well worth it to
get rid of organizing leaders and derail workers' organizing efforts.
As a result, a culture of near-impunity has taken shape in much of U.S.
labor law and practice.\6\
---------------------------------------------------------------------------
\5\ Lance Compa, Unfair Advantage: Workers' Freedom of Association
in the United States under International Human Rights Standards, p. 16
(2000).
\6\ Id. at 10.
---------------------------------------------------------------------------
II. HOW EFCA WOULD HELP
So what would EFCA do to change this egregious state of affairs? It
would not further restrict what employers can do or say. Everything
that is lawful now during the organizing campaign would remain lawful
under EFCA. Employers would remain entitled to exclude union organizers
from the workplace--the only place where workers can be counted on to
convene--and to force organizers to buttonhole employees on their way
to and from work and to beg for a bit of their precious and pressured
time outside of work. Employers would remain entitled to compel workers
to attend ``captive audience'' meetings, en masse and one-on-one, as
often as they want during the work day, at which their supervisors or
managers express opposition to unionization, predict various dire
consequences of unionization, and urge workers to oppose the union.\7\
I and other labor law scholars believe that these are serious problems
in the law of union organizing, but this bill does not change any of
this.
---------------------------------------------------------------------------
\7\ These meetings are at the center of the union avoidance
strategies urged by well-paid consultants. See John Logan, Consultants,
Lawyers, and the ``Union-Free'' Movement in the USA since the 1970s, 33
Indus Rel. J. 197 (2002). One recent study found that over 90 percent
of employers hold one-on-one meetings, and 87 percent hold larger
mandatory meetings. Mehta & Theodore, supra note 1.
---------------------------------------------------------------------------
What the bill does do to reform the union representation process
is, first, to provide meaningful remedies and, in appropriate cases,
penalties for serious unfair labor practices during the organizing
process; and, second, to reduce the employer's opportunity to mount an
aggressive and coercive anti-union campaign by providing for the option
of union recognition on the basis of majority signup.\8\
---------------------------------------------------------------------------
\8\ The bill also recognizes that many employers who lose hard-
fought organizing campaigns continue their resistance by refusing to
bargain in good faith over a first contract. They do so in the
knowledge that the law's only response will be an order to bargain some
more, and that the employees' response will often be frustration,
demoralization, and the erosion of support for the union. In that light
EFCA would allow recourse to arbitration to establish the terms of a
first contract. The focus of my comments will be on the first two
reforms: enhanced enforcement and the majority signup process.
---------------------------------------------------------------------------
A. ENHANCED ENFORCEMENT
EFCA's enhanced enforcement provisions are designed to give some
teeth to a law whose toothlessness has become an international
embarassment. The trebling of backpay for an employee who suffers anti-
union discrimination during the representation and initial bargaining
phase operates as a rough proxy for the more generous damages remedies
that exist under most antidiscrimination statutes. Given the modest
amount of backpay that is typically awarded in an individual discharge
case, this is the least that can be expected to deter anti-union
discrimination that may be calculated to head off the prospects of
unionization and collective bargaining that many employers so
vehemently resist. For employers who persist, and who engage in
egregious or repetitive acts of discrimination and coercion, the bill
would authorize the assessment of civil penalties.
EFCA also provides for expedited investigations and injunctive
relief in appropriate cases. The statute already recognizes that
certain violations of the act threaten to accomplish their unlawful
aims long before the law's ordinary remedial proceedings have a chance
to run their course; if those wrongs are to be effectively remedied, it
must be done expeditiously and by injunction. As the law stands,
however, it is only certain union conduct--illegal secondary pressures
and recognitional picketing--that trigger that extra measure of
urgency.\9\ Once again, the implicit premise of existing law seems to
be that employer interference with the basic right to form a union is
just not that serious. EFCA would introduce some symmetry to the law's
remedial scheme.
---------------------------------------------------------------------------
\9\ Sec. 10(l) of the NLRA, 29 U.S.C. Sec. 160(l).
---------------------------------------------------------------------------
The discharge of a union activist during an organizing drive is the
quintessential case of a violation that must be remedied quickly if it
is to be effectively remedied at all. Too often, the real objective of
such a discharge is not just to rid the workplace of one employee but
to intimidate his or her co-workers and stall the organizing drive
itself. Prompt injunctive relief, subject to all the usual requirements
and safeguards of injunctive proceedings, is the only effective answer
to such direct and forceful interference with the right to organize.
B. MAJORITY SIGN-UP
Nearly all of the controversy surrounding this bill has been
generated by the provision for certification of a union not only on the
basis of a secret-ballot election but also on the basis of majority
signup, or presentation of valid authorization cards signed by a
majority of workers designating the union as their representative.
Under EFCA, elections will still take place, for example, if workers
prefer a secret ballot (such that a majority does not sign cards
seeking immediate recognition), or if unions and employers agree to
proceed by election. But under EFCA, employees and unions would have
the option of proceeding instead through majority signup.
As a historical matter, the hue and cry surrounding this provision
is a bit overwrought. The NLRA has provided for recognition and
bargaining on the basis of authorization cards since its inception,
although mainly at the option of the employer.\10\ Moreover, the law
not only allows but requires an employer to withdraw recognition from
an existing union if the employer knows, on the basis of valid cards or
other evidence, that a majority of employees does not support the
union.\11\ Current law thus allows employers to rely on valid
authorization cards in lieu of an election to displace an incumbent
union, and, if the employer chooses, to recognize a new union. Yet
current law does not allow employees and unions to rely on valid
authorization cards in lieu of an election to initiate union
representation. The implicit premise behind that contrast seems to be
that it is far worse to saddle employees with a union when there is a
hypothetical possibility that a majority does not want one than it is
to deny employees a union when, in fact, a majority wants one. That
implicit premise, to which I will return, has no basis in the policies
of the act, and should be abandoned.
---------------------------------------------------------------------------
\10\ Although the law has long required an election for
certification of a union, for much of the act's history the Board would
nonetheless order an employer to bargain with a union that presented a
valid majority of authorization cards (unless the employer petitioned
for an election to test the union's claim of majority status). It was
first in Linden Lumber that employers were held to have no duty to
bargain with a union on the basis of a card majority (absent
independent ULPs that tended to erode majority support). See Linden
Lumber Co. v. NLRB, 419 U.S. 301 (1974).
\11\ See Levitz Furniture Co., 333 NLRB 717 (2001).
---------------------------------------------------------------------------
There is also an affirmative rationale for allowing employees and
unions to opt out of the formal election process in favor of majority
signup: The formal election campaign--which typically lasts about 6
weeks from the filing of the union's petition but can often be
prolonged by procedural maneuvers--has become a gory battle scene in
which employers chop away, by legal and illegal means, at the
employees' support for the union.
In principle, the secret ballot, with its strong democratic
pedigree, seems unimpeachable. And if the only problem with the
electoral campaign were employees' fear of individual reprisals based
on their vote, then the secret ballot might seem to be the obvious
answer. But the modern anti-union campaign, as it has been honed in
recent years by growing legions of well-paid ``union avoidance''
consultants, makes the secret ballot a wholly inadequate guarantee
against coercion and intimidation. That is true for two reasons.
First, a main objective of the employer's campaign is to detect
employee sympathies well ahead of the election; and, unlike most
political incumbents, the employer has motive, means, and opportunity
to do that. Although employers may not lawfully ``interrogate''
employees about their sympathies or engage in ``surveillance'' during
off-duty time, they commonly do so anyway. And the employer can in any
event direct supervisors to discover employees' union sympathies by
confronting them day after day with anti-union diatribes and observing
their reaction, and by watching who employees talk to at work. It may
be possible for some individuals to conceal their union sympathies
throughout the campaign, and then to vote ``yes'' in the election. But
it is not normal human behavior, and it is not the nature of an
organizing campaign, to maintain the secrecy of employees' union
support up to the day of the election. So the secret ballot is often a
fiction, if not a farce, in the context of an electoral campaign
process that takes place on the employer's own turf and under the
employer's determined and omnipresent gaze.
Second, the secret ballot does nothing to allay employees' fear of
adverse consequences for the workers as a group; and instilling such
fear is another tried and true feature of the modern anti-union
campaign. The standard employer campaign includes express or implied
threats to shut down or relocate the business, predictions of violence
and confrontation, of lost business and degraded workplace relations,
of refusal to grant concessions or even maintain existing benefits.\12\
Most of these threats and predictions are currently legal and will
remain so; some of them are illegal and might be deterred by the
enhanced enforcement provisions of EFCA if it becomes the law. But
there is no reason to believe that employers will stop making
exaggerated predictions of disaster and of their own recalcitrance that
lead employees to fear the consequences of forming a union. The secret
ballot is no protection whatsoever against that kind of intimidation.
---------------------------------------------------------------------------
\12\ See Logan, supra note 7.
---------------------------------------------------------------------------
Indeed, the employer's ability to bring about many of the
consequences that it ``predicts'' will follow a union victory puts in
question the very idea of a fair election in this setting. In a
political election, the incumbent may predict dire consequences if the
challenger prevails, but if the incumbent loses in our democratic
system, that incumbent gives up power and is not around to bring about
those dire consequences. In a representation election, by contrast,
even if the union wins the election, the employer will still be the
employer, and will still exercise control over the workplace, the
employees, and their jobs.
EFCA meets these concerns not by regulating what employers can say
about unions any more than current law does, but by seeking to limit
the employer's opportunity to mount this aggressive campaign--that is,
by narrowing the time period during which the employer is aware of the
organizing drive and can mount its counter-campaign. Under EFCA,
employees and unions--and not only the employer--would have the option
of proceeding instead through majority signup. And much as the employer
now must withdraw recognition from an incumbent union when a majority
of employees clearly express that choice through authorization cards or
other evidence, the employer would be required to grant recognition to
a new union on the basis of a majority of valid cards in favor of the
union.
Opponents argue that, without a formal campaign, employees will be
deprived of essential information about unions. Information is good.
But employers who are committed to avoiding unionization are not
especially reliable sources of such information. The best way to learn
what it is like to have a union is having a union. That, after all, is
how employees learn most of what they need to know about their
employer--by working for the employer. It is hard for an applicant to
get good information about what it is like to work in a particular firm
or department, and even harder to know what will happen if a new
manager takes over or if a new product flops. Applicants ask the
questions they feel they can ask up front (as employees can with the
union). Once on the job, they may learn lots of things they did not
know ahead of time, some good and some bad (as they may with the
union). Employees, armed with this new information, may decide to stay
or to quit; the exit option is equally available to employees who find
they do not like having a union. But employees who are dissatisfied
with their union--if their views are shared by a majority of their co-
workers--have two options that employees dissatisfied with their
employers do not: They may tell their employer that they no longer
support the union, at which point the employer may or even must
withdraw recognition; or, if they are union members, they may vote out
the union's leadership in internal union elections.
Most of the controversy surrounding the proposed use of
authorization cards is based on fears of union coercion and
misrepresentation in the solicitation of cards. It is certainly
possible for that to happen, just as it is possible for employers to
coerce employees to sign cards seeking decertification of a union. In
either case, the coercion would be illegal and the cards would be
invalid, and the Board must pass on those issues before ordering
certification or decertification.
But, in fact, there is very little evidence of union coercion or
fraud in securing authorization cards during the very long history of
Board reliance on such cards in the representation context. A recent
study of both card-check and election-based campaigns found that
employees experienced less pressure from any source in card-check
campaigns than in NLRB elections, and much less pressure from unions
than from management in either kind of campaign.\13\ When it comes to
adjudicated cases, there is even less reason for concern about union
coercion. The HR Policy Association, an opponent of card-check
recognition, identified 113 cases in the 70-plus year history of the
act that it claimed involved coercion, fraud, or misrepresentation in
the securing of union authorization cards. A skeptical review of those
cases suggested that such misconduct was actually found in only 42 of
those cases.\14\ Either way, it is a drop in the bucket compared to the
thousands of cases of illegal employer discrimination against union
supporters every year.
---------------------------------------------------------------------------
\13\ Based on a 2005 survey of 430 workers from both election and
card-check campaigns, Professors Adrienne Eaton and Jill Kreisky found
the following: Among all workers in both campaigns, 22 percent said
management coerced them ``a great deal'' (vs. 6 percent for the union).
In NLRB elections, 46 percent of workers complained of management
pressure, while, in card check campaigns, 23 percent reported
management pressure and 14 percent reported union pressure. Fewer than
5 percent of workers who signed a card in the presence of an organizer
felt that the organizer's presence made them feel pressured to sign.
Fewer workers in card check campaigns than in election campaigns felt
pressure from co-workers to support the union (17 percent vs. 22
percent). Adrienne Eaton & Jill Kreisky, Fact Over Fiction: Opposition
to Card Check Doesn't Add Up, p. 2 (American Rights at Work, 2006).
\14\ See Testimony of Nancy Schiffer before the House Subcommittee
on Health, Education, Labor, and Pensions, Feb. 8, 2007, at p. 9.
---------------------------------------------------------------------------
There are two reasons why unions would not generally be expected to
coerce and intimidate workers into signing cards: First, unions do not
have the kind of leverage that employers have over workers. Second,
union coercion and intimidation of employees is a strategy that is
likely to backfire. It is no way to build trust among employees and in
the union, without which a union can accomplish very little. A union
does not own the workplace; it does not decide whether the employees
have a job; it has no power at all in the workplace unless a majority
of workers support it. Without an uncoerced majority, the union cannot
accomplish anything over the long or medium term (and is vulnerable to
decertification).
Again, this is not to say that unions never coerce employees to
sign cards, but that there is no reason to believe that it is or is
likely to become a systemic problem, especially as compared to the
documented history of employer abuses during the formal electoral
process to which the proposed majority signup procedure affords an
alternative.
III. CONCLUSION: TAKING THE RIGHT TO ORGANIZE SERIOUSLY
There will always be some risk of abuse by both employers and
unions, and some uncertainty about whether employees have been able to
express their true preferences. The law should aim to minimize those
risks and uncertainties on both sides. But current law, and the
opponents of this bill, seem to assume that the risk that a union might
be foisted upon employees in the absence of an uncoerced majority is
much, much worse--orders of magnitude worse--than the risk that
employees may be denied representation when a majority of employees
wants it.
It is hard to see how the status quo could be justified without
that unspoken premise, given the slight and ephemeral evidence of union
coercion of cardsigners as compared to the overwhelming evidence of
employer coercion of union supporters under the existing regime. That
seems to be the unspoken premise, as well, behind existing law's
reliance on valid cards to command the employer's withdrawal of support
for an incumbent union and its refusal to rely on valid cards to
command recognition of a new union.
If that is indeed the unspoken premise behind the status quo, it
would be quite consistent with another set of facts: Surveys indicate
that between 32 and 53 percent of non-managerial workers who don't have
union representation wish they did, while only 10 to 13 percent of
workers who do have union representation wish they did not.\15\ An
exceedingly generous assessment of the existing regime is that, in
order to minimize the (very small) risk that workers will be stuck with
a union in the absence of uncoerced majority support, it virtually
guarantees that many more workers will be denied union representation
when an uncoerced majority would have chosen it.
---------------------------------------------------------------------------
\15\ Richard B. Freeman & Joel Rogers, What Workers Want, pp. 18,
20 (2d ed. 2006).
---------------------------------------------------------------------------
But that is not what the law is supposed to do. The law is supposed
to protect employees' right to form a union and bargain collectively;
that right is every bit as important as the right to refrain from those
activities. In a world in which employers, who own and control the
workplace and on whom employees are inescapably dependent, vehemently
oppose unionization, the law must stand solidly behind employees who
seek to exercise that right. The law's failure to do so has contributed
in some measure to the drastic decline in union membership in the
private sector, and to the well-documented ``representation gap''--the
wide gap between what employees have and what they say they want in
terms of collective representation.\16\ EFCA would take a modest step
toward enabling employees to narrow that gap by forming a union.
---------------------------------------------------------------------------
\16\ Freeman and Rogers found in the mid-1990s that 63 percent of
employees wanted more influence over workplace decisions than they had,
and that 43 to 56 percent of them believed collective representation
was a better way to achieve that than individual action. Id. at 12-13.
A more recent California survey found that 51 percent of respondents
thought it was very important, and 38 percent thought it was somewhat
important to have more say in workplace decisions. Id.
The Chairman. Thank you very much. Our next witness, Dr.
Larry Mishel, who is a recognized authority in economic policy,
particularly as it effects middle- and low-income families
currently serves as President of the Economic Policy Institute,
a nonprofit, nonpartisan think tank that provides high quality
research and education to promote a prosperous, fair,
sustainable economy. He is a graduate of Penn State University.
He received his Doctorate in Economics from the University of
Wisconsin, principal author with a research volume on the state
of working America, a comprehensive review of the labor market
and living standards. Doctor, good to see you again.
STATEMENT OF LAWRENCE MISHEL, Ph.D., PRESIDENT, ECONOMIC POLICY
INSTITUTE, WASHINGTON, DC.
Mr. Mishel. Thank you very much. Well, thank you for the
opportunity to discuss the importance of making it possible,
once again, for working Americans to exercise their fundamental
rights to join together in unions of their choosing.
The topic of today's hearing couldn't be more timely.
Americans are facing the very challenges that unions help us to
address. Most Americans are working harder and smarter than
ever before but they fear their efforts are not being
recognized and rewarded.
In our time, we have seen labor movements can be a force
for freedom throughout the world. We often heard about it when
it was the Polish Solidarity Union overthrowing communist
totalitarianism. We note it with COSATU helping to overthrow
Apartheid. Unions are good at home as well.
All freedom-loving Americans should favor a strong, vibrant
labor movement here and abroad. I learned that as a young boy
in Philadelphia when I was taught that the building next to
Independence Hall was called Carpenters Hall. That is where the
First Continental Congress met.
Twenty-five years ago, a very important book written by
Harvard Economist James Medoff and Richard Freeman stated,
unions reduce wage inequality, increase industrial democracy
and often raise productivity. In the political sphere, unions
are an important voice for some of society's weakest and most
vulnerable groups, as well as for their own members. That
remains an ample summary of the union impact on our country.
Let's first look at the union impact in the workplace.
Unions promote opportunity, security and fundamental fairness.
Through training programs and requirements that job openings be
posted and filled fairly, unions help working Americans enjoy a
fair chance to get ahead.
Unions make sure that workers are rewarded for their years
of service and have regular hours that allow them to plan ahead
and spend time with their families.
Sometimes a union is a matter of life and death. Twenty-
eight percent of coal miners, for example, work in union mines,
but only 14 percent of the fatalities in mines in recent years
was in these union mines. This means that it was twice as
likely to be a coal miner--if you are nonunion, you are twice
as likely to die as you would if you were a union miner.
Unions ensure due process through the grievance process. An
employer must establish just cause before disciplining or
terminating an employee. This gives members the security to
complain, to have input into how a business is operated, to
challenge unsafe, unfair, unlawful, unproductive or wasteful
practices and to recommend better alternatives.
Of course, unions' most important contribution is making
work pay. We know that unions, controlling for many factors,
provide wages that are much higher, provide health benefits,
which you are more likely to get and have better pension
coverage and have more time off.
It is important to note that even nonunion employees
benefit from the presence of unions because of what is called
the threat effect. That is, employers, for fear of having their
workers organize, pay their nonunion employees more. The
clearest example of this very recently, Japanese and German
transplant auto factories which for 25 years have paid UAW
wages. Now that the UAW is weakened, they are building plants
and paying people just $10 and $15 an hour.
How do unions affect competitiveness? Do unions hurt
companies? Many people think so but 30 years of research and
over 75 studies would tell you that, in fact, unions do no harm
to the productivity of firms nor that union firms are more
likely to lead to a plant closing or insolvency. There is very
ample research on this.
Why is that the case? Well, one, unions give employees a
voice in the workplace allowing them to complain, shape
operations and push for change. Two, union employees feel freer
to speak up and it fuels collaboration and information sharing.
Why would you share with another worker what you know if you
don't have security on the job?
Three, the higher pay that unions provide pushes employers
to do better with their costs, investing in new technology and
making new investments. And last, union employees get more
training and participate in higher performance practices.
Now lets turn to the union effect on the national economy.
Unions were a force from the mid 1940's through the mid 1970s,
ensuring that we all grew together as Senator Kennedy's chart
showed. And it's been the ever-present decline of unionization
that has helped lead to the fact we no longer are growing
together, we are growing apart.
The top 1 percent of income earners now have double the
share of income they had just 30 years ago. The wealth of the
wealthiest 1 percent is now 190 times that of the median
household. It used to be just 125 to 1.
Union membership and its decline is very much associated
with that. Many studies show that around 20 percent of the
growth of the wage inequality in the last 30 years is due to
the weaker unions and fewer unions that we have. But
researchers also think this is an underestimate because it
ignores the union threat effect, the effect on the nonunion
workers, ignores that unions have benefits, which is even
greater than on wages and because there is a cultural effect.
We've had an enormous shift of norms whereby greed is
worshipped and hard work is not rewarded and that has a lot to
do with the change in inequality over the years.
I would also stress the disconnect between work and pay
that Senator Kennedy had a chart on. Americans are working not
just harder and longer but more productively. The economy has
grown enormously, in large part because the American worker has
been among the most productive in the world. Output per hour of
work increased 71 percent from 1980 to 2005, making possible a
dramatic rise in our living standards. The rise of productivity
is the rise in the size of the pie that we get to distribute.
The fact is not that it has grown 71 percent over the last
25, 27 years but that the typical worker does not have much
higher wages is evidence of a gross failure of our economy to
be fair to everybody.
The Chairman. I am going to let you wrap up.
Mr. Mishel. OK, thank you. I would just point out that over
the last 5 years, productivity has been almost 20 percent, but
the wages of both college educated and high-school educated
workers have been stagnant. Given that, the surveys show that
over 50 percent of nonunion, nonmanagerial workers would choose
to have a union tomorrow. It is clear that the line going down
of union membership represents a gross disconnect between what
workers want and what they are getting and that is why they
need The Employee Free Choice Act. Thank you.
[The prepared statement of Mr. Mishel follows:]
Prepared Statement of Lawrence Mishel, Ph.D.
Thank you for the opportunity to discuss how to make it possible,
once again, for working Americans to exercise their fundamental rights
to join together in unions of their choosing.
The topic of today's hearing couldn't be more timely. Americans are
facing the very challenges that unions help us to address:
Most Americans are working harder and smarter than ever before, but
they fear their efforts are not being recognized and rewarded. The
growing gaps in wages and wealth threaten the productivity of our
economy and the cohesion of our society. And many Americans are opting
out of the democratic process at a time when the Nation needs their
involvement and their ideas.
In our time, we have seen how labor movements can be a force for
freedom throughout the world. Recall the achievement of Solidarity to
overcome Communist totalitarianism in Poland. Recall the efforts of
COSATU to overthrow Apartheid in South Africa. All freedom-loving
Americans should favor a strong, vibrant labor movement both here and
abroad. Here in the United States, unions can also make an historic
contribution by making work pay for those who labor for low wages, by
restoring the link between productivity increases and pay increases,
and by providing training, health coverage, and portable pension
benefits at a time when most Americans will keep moving from job to
job.
We know union members can build a better America because that is
just what they have done at every crucial moment in our Nation's
history, from the days when the First Continental Congress met in
Philadelphia . . . in Carpenters Hall.
As Harvard economists James Medoff and Richard Freeman wrote nearly
25 years ago:
``Unions reduce wage inequality, increase industrial
democracy and often raise productivity . . . in the political
sphere, unions are an important voice for some of society's
weakest and most vulnerable groups, as well as for their own
members.''
In our Nation's public life, unions have been a powerful voice for
all working Americans for 150 years. In the 19th century, they won the
10-hour day and then the 8-hour day so that succeeding generations
could spend time with their families. In the years before the Great
Depression, the unions helped America abolish child labor, establish
workmen's compensation and protect workers' health and safety on their
jobs. During the Depression, union members helped to preserve democracy
and restore prosperity by enacting a Federal minimum wage, overtime pay
and a 40-hour week, creating social security and unemployment
insurance, and thereby proving that our political system could serve
the interests of the great majority of people. Labor's victories were
America's victories.
In the succeeding years, union members helped America keep its
promise of ``liberty and justice for all.'' With the visionary
leadership of A. Philip Randolph, the Sleeping Car Porters were the
unsung heroes of the civil rights movement from the fight for the Fair
Employment Practices Commission to the Montgomery Bus Boycott and the
March on Washington. Walter Reuther of the UAW was at Martin Luther
King's side in 1963 at the March on Washington. Attorney General
Nicholas Katzenbach declared that the Civil Rights Act of 1964 would
not have passed but for the support and determination of the unions.
And Dr. King gave his life supporting sanitation workers who walked off
their jobs in Memphis to assert their human dignity. Union members led
the fights for the Mine Safety Act, the Occupational Safety and Health
Act, ERISA, and laws to protect migrant farm workers. The health care
workers and nurses pushed for and won passage of the last improvement
to our workplace safety laws in 2000, the Needlestick Safety and
Prevention Act.
Through all these efforts, and so many more, America's unions made
the United States a fairer, more productive, and healthier society.
Unions build our democracy as well as our economy. Union members
and their families are more likely to vote than the average American,
and organizations from the Red Cross to United Way benefit from the
disproportionate contributions and participation of union members.
UNIONS IN THE WORKPLACE
In our workplaces, unions promote opportunity, security, and
fundamental fairness.
Through training programs and requirements that job openings be
posted and filled fairly, unions help working Americans enjoy a fair
chance to get ahead.
Unions make sure that workers are rewarded for their years of
service and have regular hours that allow them to plan ahead and spend
time with their families.
Union employers are less likely to violate civil rights laws, less
likely to violate minimum wage and overtime laws, and more likely to
follow workplace safety standards. Twenty-eight percent of coal miners,
for example, work in union mines. Yet from 2004 to 2006, only 14
percent of fatalities occurred in union mines. The odds of dying in a
non-union mine were more than twice as great as in a union mine.
Unions ensure due process. In every State but Montana, employment
is at will. Employers can fire employees for no reason or any reason,
except those specifically proscribed by law, which usually pertain to
race, religion, age, gender or ethnicity. Employees with no union to
protect them can be fired on a whim, for complaining, for
whistleblowing, for dressing wrong, because the foreman doesn't like
them, or for their appearance. Unions, by contrast, almost always
demand and win a right to due process and a requirement that the
employer establish just cause before disciplining or terminating an
employee. By insisting on just cause and due process, unions give their
members the security to complain, to have input into how a business is
operated, to challenge unsafe, unfair, unlawful, unproductive or
wasteful practices and to recommend better alternatives.
In times of hardship, unions help hardworking people have access to
the benefits that they have earned, such as unemployment insurance,
worker's compensation, or Trade Adjustment Assistance. Unions often
advocate on behalf of their members with government agencies when
benefits are denied or delayed.
Of course, unions' most important contribution is making work pay
and compensation more equitable.
When one compares workers whose experience, education, region,
industry, occupation and marital status are comparable, those covered
by a union agreement enjoy:
14.7 percent higher wages;
28.2 percent more likely to have employer-provided health
insurance;
53.9 percent more likely to have pension coverage; and
14.3 percent more paid time off.
The union wage premium varies by race, ethnicity and gender, but is
large for every group:
Whites--13.1 percent
Blacks--20.3 percent
Hispanics--21.9 percent
Asians--16.7 percent
Men--18.4 percent
Women--10.5 percent
In unionized settings there is much less inequality as people doing
similar work are similarly paid, as race and gender differentials are
less, as occupation differentials are less, and as the wages of front-
line workers are closer to that of managerial workers. Unions also
lessen inequality because they are more successful at raising the wages
of those in the bottom 60 percent of the wage pool.
It is important to note that even non-union employees benefit from
the presence of unions in their industry and area. Because of the so-
called ``threat effect,'' non-union employers give their employees
higher wages and more generous benefits in order to prevent their own
employees from organizing. The clearest example is the Japanese and
German transplant auto factories, which for 25 years have paid UAW
wages to their non-union employees, even in the rural deep South where
wages are generally low, in order to keep them from unionizing. Now
that they perceive the UAW as weakened, the transplants are beginning
for the first time to pay lower wages--$10-$15 an hour less in some
cases.
More generally, unions have raised the standard for most employers
and the expectations of most employees by negotiating paid lunch
breaks, health benefit coverage, paid vacations, and paid holidays,
none of which (shamefully) is required by Federal law.
THE EFFECTS OF UNIONS ON COMPETITIVENESS
So do unions help or hurt companies? How does unionized Costco, for
example, compete successfully with non-union Wal-Mart even though
Costco's labor costs are 40 percent higher? How does Costco generate
almost twice as much profit per employee as Wal-Mart's Sam's Club?
Decades of research show that unions can have substantial positive
effects on firm performance.
At least four factors account for the positive impact on
performance:
1. Unions give employees a voice in the workplace, allowing them to
complain, shape operations, and push for change, rather than simply
quitting or being fired. That leads to reduced cost from lower
turnover.
2. Union employees feel freer to speak up about operations, leading
to improvements that increase productivity. Employment security fuels
collaboration and information sharing, leading to higher productivity.
3. Higher pay pushes employers to find other ways to lower costs--
with new technology, increased investment, and better management.
4. Union employees get more training, both because they demand it
and because management is willing to invest more to get a return on
their higher pay.
Research shows that the likelihood of union firms closing or going
bankrupt is no greater than for non-union firms. The bottom line is
that union firms are just as productive as non-union firms. In the auto
industry, for example, even though the non-union foreign transplant
companies generally have newer facilities, 6 of the 10 most productive
assembly plants are union.
UNIONS AND THE NATIONAL ECONOMY
One of the most important effects of unions has been on reducing
inequality. The ``great compression'' of the mid-20th century, when a
huge gap between the wages and incomes of workers on the bottom and at
the top closed, began as deliberate government policy during World War
II, but was maintained for 30 years by the power of unions to raise
workers' wages and hold the CEOs in check. The American middle class
was created in the 1940s, 1950s and 1960s, when unions were strong and
guaranteed that the productivity and profit of American industry was
broadly shared.
For the last 30 years, as union density has declined, that
compression has reversed and inequality has been on the rise. Since
1973, according to Picketty and Saez, the share of market income going
to the top 1 percent has more than doubled, from less than 10 percent
of all income to almost 22 percent in 2005. The ratio of the wealth of
the wealthiest 1 percent of Americans to those in the middle (e.g., the
median) was 125 to 1 in 1962. By 2004, it was 190 to 1.
Studies show that the decline in union membership has been a
substantial factor in this rising inequality--responsible for at least
20 percent. My own research suggests the effect is larger, since most
estimates ignore the union threat effect and its loss, the union effect
on benefits, and as Paul Krugman points out, unions have had a cultural
effect, helping impose norms that made greed and inflated CEO
compensation unacceptable. When unions were strong, CEO pay was
``only'' 24 times the pay of average workers. Today, with unions
weakened, CEO pay is 262 times the pay of average employees.
For 30 years after World War II, a rising economy truly lifted all
boats, and Americans at every wage level saw their income rise
together. For most of the last 30 years, and particularly in the last 5
years, with union representation at its lowest share of the labor force
since the 1930's, the Nation's enormous wealth has not been fairly
shared. Since 1980, the U.S. economy has grown at an annual rate of 3
percent per year, but the benefits of this growth have gone, as I noted
earlier, overwhelmingly to the best-off 10 percent and among these,
especially to the upper 1 percent. Average working Americans have been
getting a shrinking piece of the pie. Inequality has reached levels not
seen since before the Great Depression.
Since the late 1970's, inflation-adjusted wages and income for the
vast majority of Americans have risen much more slowly than the
Nation's productivity and wealth. To the extent that the typical
family's or household's earnings have risen, it is mostly because
family members, especially married women, have worked longer hours. The
typical middle class family today works more than 10 hours more per
week than a similar family worked in 1979. Between 1975 and 2000, prime
age families with children increased their time in the labor market by
900 hours a year--5 months more work! It's no wonder that families feel
squeezed both in terms of finances and time.
Americans are working not just harder and longer, but more
productively. The economy has grown enormously, in large part because
the American workforce has been among the most productive in the world.
Output per hour of work increased 71 percent from 1980 to 2005, making
possible a dramatic rise in our living standards. But the real
compensation, including benefits, of nonsupervisory employees rose only
4 percent. Productivity over the past 5 years rose almost 20 percent,
but inflation-adjusted wages for workers with a college education have
been flat, just as they have for those with a high school diploma. (See
Figure)
THE EMPLOYEE FREE CHOICE ACT
I have shown that the decline in union representation has been a
major cause of two disturbing trends in our economy: the rise in
inequality and the failure of average working Americans to share in the
benefits of rising productivity. By reducing the opportunity for
employers to intimidate and discourage workers from unionizing after
they have reached a collective decision to do so, the Employee Free
Choice Act can help restore and spread the benefits that unions bring
to workers and the economy.
Employees understand the benefits unions bring. Research by Harvard
economist Richard Freeman (that I have attached to this testimony)
shows that a majority of nonunion non-managerial workers in 2005 would
have voted for a union if given the opportunity. If even half of the 58
percent of employees who want a union had one, the entire economy would
be transformed, and I have no doubt that the result would be a much
fairer distribution of the economic wealth our Nation produces.
The authors of the Wagner Act understood perfectly well that
individual employees cannot strike a fair bargain with much more
powerful employers. They knew, as Sen. James Webb says, that employees
need an agent. Their conclusions are still part of the National Labor
Relations Act's Findings and Declaration of Policy:
``The inequality of bargaining power between employees who do
not possess full freedom of association or actual liberty of
contract, and employers who are organized in the corporate or
other forms of ownership association substantially burdens and
affects the flow of commerce, and tends to aggravate recurrent
business depressions, by depressing wage rates and the
purchasing power of wage earners . . .''
By requiring employers to accept their employees' choice of
bargaining representative, deterring employer violations of the law,
and by requiring arbitration of first contracts when necessary, the
Employee Free Choice Act will help restore the purchasing power of
average Americans and lift the living standards of the 90 percent of
Americans who have endured the middle class squeeze or been left out of
our economic gains altogether.
The Chairman. Thank you very much. Our final witness will
be Peter Hurtgen, who is a former member and Chairman of the
National Labor Relations Board as well as former Director of
the Federal Remediation Conciliation Services and a graduate of
Georgetown University. He also has a law degree, currently a
partner of the law firm, Morgan and Lewis, where he practices
labor and employment law focusing on issues regarding
collective bargaining and National Relations Act. Have you
recovered from that game--North Carolina----
Mr. Hurtgen. I have Senator, but I am now looking obviously
to Ohio State on Saturday.
The Chairman. I was about to say that's good. I'll tell
you, you can look at a lot of sporting events but rarely will
you see a comeback like that game.
Mr. Hurtgen. I agree. I don't want to say I was giving up
toward the end but it didn't look good.
STATEMENT OF PETER J. HURTGEN, PARTNER, MORGAN, LEWIS AND
BOCKIUS, LLP
Mr. Hurtgen. Senator, thank you and members of the
committee for this opportunity to talk to you today about The
Employee Free Choice Act. I, as you noted, served as a member
of the National Labor Relations Board from 1997, appointed by
President Kennedy and confirmed by the Senate. Until August
2002, I was the Chair appointed as such by President Bush in
May 2001 until I left the Board in the August 2002 and then
took on the directorship of the Federal Remediation and
Reconciliation Service in August 2002 and stayed in that
position until December 31, 2004. I then returned to the
practice of labor law on behalf of management, which is what I
had done for some 30 years prior to going to the National Labor
Relations Board.
I am not here to speak to the efficacy of unions or their
role on our society or in our workplace. As I grant that, I
have spent my entire professional career representing employers
with unions and have negotiated in excess of 175 collective
bargaining agreements and as I thought about my testimony
today, I thought as far back as I can I think, I have never had
a bargaining situation where it even produced a strike. But
obviously, those unfortunate events occur and the law deals
with them.
There are two features at least, however, of this proposed
legislation, which I think are fundamentally flawed. This act
was created in 1935. It put into place a system that took labor
disputes out of the streets and out of the courts and put them
into the National Relations Labor Board, an administrative,
quasi-judicial agency. That act was amended substantially in
1947, as we know, and less so in 1959. But when Congress
enacted the act in 1935 and when it was amended in 1947, it
could not have appreciated how the world of work has changed.
How global markets for capital, for goods, for services, for
employees have changed so radically, how societal changes have
occurred. Indeed, how the individual rights in the workplace
have transcended the collective rights starting in 1964 with
Title VII. Congress has added rights to employees regularly and
that has served in substantial part, ironically, probably to
disserve the growth of unions, but it is what it is.
I'm not here to argue that it's not time to overhaul this
statute to reflect today's workplace but the act as presented
or the bill as presented in the so-called Employee Free Choice
Act clearly doesn't do it. The preamble to the statute uses the
term full freedom of choice and that is essentially what we are
talking about in two major pieces of this legislation.
It states in part, ``the Act is designed to protect the
exercise by workers of full freedom of association, self-
organization and designation of representatives.''
It seems, frankly, to me, self-evident that the full
freedom can only be achieved, as did Congress in 1935, by a
secret ballot when choosing a representative.
You've heard, and it is true that employers in unions
contest employee choice vigorously and it's true that sometimes
that one or both parties will exceed the bounds of the law in
doing that, but the NLRB has vigorously enforced the rights of
employees to organize since its enactment and it continues to
do so today.
It doesn't help to take these disputes over organizing out
of the regulatory channels of the Board and into the back
allies of card signing campaigns. That is exactly what would
happen.
Right now, the Board's rules and regulations have created
critical periods during which employer conduct as well as
employee conduct is looked at specifically with the idea of
making sure, as best it can, that employee's rights, when they
go to the ballot box, which is run and operated by the
government, that they will cast a free and uncoerced and
unintimidated ballot. There is absolutely no way the Board or
any other quasi-judicial agency, in my view, will be able to
police the vigorous campaigns that will go on if this whole
issue is relegated to whether employees sign a card or not.
So if we want to create a system that more likely will
produce litigation and consternation and disharmony in the
workplace, this is the way to do it.
If employers are attacked by unions in the organizing
campaign, they are going to respond. Now, the law controls that
response and it regulates it. If you take it out of those
controls and regulations and simply let it go on with regard to
no time period and whenever with regard to signing or not
signing of cards, it will not serve the purpose of the original
enactment of this law. It will not help the societal problems
in the workplace that other speakers feel needs to be
corrected. It will just simply create more opportunity for
lawlessness than sound labor policy.
I want to spend more time, frankly, talking about the other
aspect of this legislation, which on the face of it would seem
more reasonable, but is seriously flawed in my view. Also on
that is the requirement that if a first contract isn't
negotiated within 120 days that it will be submitted to binding
arbitration. Again, we are talking about full freedom here. In
this case here, that is the freedom to contract.
The U.S. Supreme Court said in its seminal decision in H.K.
Porter and I've cited it in my remarks, with regard to
collective bargaining agreements--the objective of this act was
not to allow government regulation of the terms and conditions
of employment but rather to ensure that an employer and their
employees could work together to establish mutually
satisfactory conditions.
The basic theme of the act was that through collective
bargaining the passions, arguments and struggles of prior years
would be channeled into constructive, open discussions leading,
it was hoped, to mutual agreement. But it was recognized from
the beginning of that agreement, in some cases, it might be
impossible and it was never intended that the government would,
in such cases step in, become a party to the negotiations and
impose its own views of a desirable settlement.
A collective bargaining agreement is a complex, large
document involving the entire workplace and its terms and
conditions of employment. Nobody said it better in describing
than Justice Douglas in the case of United Steelworkers versus
Warrior and Gulf, 1960. This is what Justice Douglas said, the
collective bargaining agreement states the rights and duties of
the parties. It is more than a contract, it is a generalized
code to govern a myriad of cases, which the draftsmen cannot
wholly anticipate--the collective agreement covers the whole
employment relationship. It calls into being a new common law--
the common law of a particular industry or of a particular
plant.
Now it's true. The first contracts are harder. It's because
they are first contracts. There will be intransigence and there
will be problems that have developed because of the campaign
for or against the union leading up to this certification by
the Board. But the parties work through that and it is critical
that they be allowed and required to work through that.
Interest arbitration. as opposed to rights arbitration,
doesn't have standards for guidelines. There are no experts out
there that can put an entire collective bargaining agreement
together for the parties. Now that has been attempted in some
States in the public sector because they do not want to allow
employees the right to strike. So they replace it with interest
arbitration. I have been involved in that process in Florida
for 20 years.
The Chairman. We will give you a chance to wrap up if you
would please.
Mr. Hurtgen. I will Senator, thank you. When you have that
kind of bargaining, it isn't really bargaining. It is simply
posturing to get a whole bunch issues teed up for a hearing
before an arbitrator who will then try to be solemn and none of
them are, and resolve these bargaining disputes. It doesn't
work. It would clearly not work here. It would destroy the
freedom of both parties to engage in collective bargaining.
Thank you.
[The prepared statement of Mr. Hurtgen follows:]
Prepared Statement of Peter J. Hurtgen
Chairman Kennedy, Senator Enzi, and members of the committee, I am
pleased and honored to be here today. Thank you for your kind
invitation.
By way of introduction, I was appointed by President Clinton,
confirmed by the Senate, and served as a member of the National Labor
Relations Board from November 1997 until August 2002. From May 2001
until August 2002 I served as Chairman of the Board. In August, 2002 I
was appointed by President Bush and confirmed by the Senate as Director
of the Federal Mediation and Conciliation Service. Before becoming a
member of the Board, I practiced as a labor lawyer representing
management in private practice from 1966 to 1997. I returned to private
practice on January 1, 2005 and am a Senior Partner in the law firm of
Morgan, Lewis & Bockius LLP.
The National Labor Relations Act was enacted in 1935 and has been
substantially amended only twice--once in 1947 and once in 1959. The
act establishes a system of industrial democracy that is similar in
many respects to our system of political democracy. At the heart of the
act is the secret ballot election process administered by the National
Labor Relations Board. In order to understand how recent trends in
Union organizing are diluting this central feature of the act, some
background is necessary.
THE NLRB'S SECRET BALLOT ELECTION PROCESS
If a group of employees in an appropriate collective bargaining
unit wish to select a union to represent them, the Board will hold a
secret ballot election based on a petition supported by at least 30
percent of employees in the unit. The Board administers the election by
bringing portable voting booths, ballots, and a ballot box to the
workplace. The election process occurs outside the presence of any
supervisors or managerial representatives of the employer. No
campaigning of any kind may occur in the voting area. The only people
who are allowed in the voting area are the NLRB agent, the employees
who are voting, and certain designated employee observers.
The ultimate question of union representation is determined by
majority rule, based on the number of valid votes cast rather than the
number of employees in the unit. If a majority of votes are cast in
favor of the union, the Board will certify the union as the exclusive
bargaining representative of all employees in the collective bargaining
unit. Unlike joining a club, once a union is certified by the Board, it
becomes the exclusive representative of the entire unit of employees,
regardless of whether they voted for the union. The employer is
obligated to bargain with the union in good faith with respect to all
matters relating to wages, hours, and working conditions of the
bargaining unit employees.
The Board is empowered to prosecute employers who engage in conduct
that interferes with employee free choice in the election process, and
may order a new election if such employer interference with the
election process has occurred. The Board also will order the employer
to remedy such unfair labor practices, for example by ordering the
employer to re-instate and compensate an employee who was discharged
unlawfully during the election campaign. In extreme cases, the Board
may even order an employer to bargain with the union without a new
election, if the Board finds that its traditional remedies would not be
sufficient to ensure a fair rerun election and if there is a showing
that a majority of employees at one point desired union representation.
The Supreme Court affirmed the Board's power to issue this
extraordinary remedy in NLRB v. Gissel Packing Co., 395 U.S. 575
(1969). When issuing a Gissel bargaining order, the Board will
determine whether majority support for the union existed by checking
authorization cards signed by employees during the organizing process.
As the Board and the Supreme Court have acknowledged, the use of
authorization cards to determine majority support is the method of last
resort. A secret ballot election is the ``most satisfactory--indeed the
preferred--method of ascertaining whether a union has majority
support.'' Gissel Packing, 395 U.S. at 602. Despite its strong push for
card check legislation, organized labor has acknowledged the
superiority of secret ballot elections in determining employee choice.
At a time when it was enjoying a high success rate in such elections,
the AFL-CIO once acknowledged that authorization cards are not reliable
indicators of employee sentiment in favor of a union. A 1961 handbook
for organizers noted:
[C]ards are at best a signifying of intention at a given
moment. Sometimes they are signed to ``get the union off my
back.'' \1\
---------------------------------------------------------------------------
\1\ NLRB v. S.E. Nicholls Co., 380 F.2d 438, 445 n.7 (2d Cir.
1967), quoting AFL-CIO Guidebook for Union Organizers, (1961).
Indeed, as recently as 1998, in making the case for requiring
secret ballot elections for employees to get rid of unions (i.e.,
decertification), the AFL-CIO, the United Auto Workers (UAW), and the
United Food & Commercial Workers (UFCW) argued to the National Labor
---------------------------------------------------------------------------
Relations Board:
a representation election ``is a solemn . . . occasion,
conducted under safeguards to voluntary choices,'' . . . other
means of decisionmaking are ``not comparable to the privacy and
independence of the voting booth,'' and [the secret ballot]
election system provides the surest means of avoiding decisions
which are ``the result of group pressures and not individual
decision[s].'' In addition, . . . less formal means of
registering majority support . . . are not sufficiently
reliable indicia of employees' desires on the question of union
representation to serve as a basis for requiring union
recognition.\2\
---------------------------------------------------------------------------
\2\ Joint Brief of the United Automobile, Aerospace, and
Agricultural Implement Workers of America, the United Food and
Commercial Workers, and the AFL-CIO in Chelsea Industries and Levitz
Furniture Co. of the Pacific, Inc., Nos. 7-CA-36846, 7-CA-37016 and 20-
CA-26596 (NLRB) at 13 (May 18, 1998), quoting NLRB v. Gissel Packing
Co., 395 U.S. 575, 602 (1969) and Brooks v. NLRB, 348 U.S. 96, 99, 100
(1954).
Even the lead sponsor of the Employee Free Choice Act in the House,
Education, and Labor Committee Chairman George Miller (D-CA), joined by
15 other pro-labor members of Congress wrote in a 2001 letter, in the
context of Mexican labor laws, that ``the secret ballot election is
absolutely necessary in order to ensure that workers are not
intimidated into voting for a union they might not otherwise choose.''
\3\
---------------------------------------------------------------------------
\3\ Letter from U.S. Rep. George Miller et al., to Junta Local de
Conciliacion y Arbitrraje del Estado de Puebla, Aug. 29, 2001.
---------------------------------------------------------------------------
Although authorization cards adequately may reflect employee
sentiment when the election process has been impeded, the Board and the
Court in Gissel recognized that cards are ``admittedly inferior to the
election process.'' Gissel Packing, 395 U.S. at 602. Other Federal
courts of appeal have expressed the same view:
``[I]t is beyond dispute that secret election is a more
accurate reflection of the employees' true desires than a check of
authorization cards collected at the behest of a union organizer.''
NLRB v. Flomatic Corp., 347 F.2d 74, 78 (2d Cir. 1965).
``It would be difficult to imagine a more unreliable
method of ascertaining the real wishes of employees than a `card
check,' unless it were an employer's request for an open show of hands.
The one is no more reliable than the other. . . . Overwhelming
majorities of cards may indicate the probable outcome of an election,
but it is no more than an indication, and close card majorities prove
nothing.'' NLRB v. S. S. Logan Packing Co., 386 F.2d 562, 565 (4th Cir.
1967).
``The conflicting testimony in this case demonstrates that
authorization cards are often a hazardous basis upon which to ground a
union majority.'' J. P. Stevens & Co. v. NLRB, 441 F.2d 514, 522 (5th
Cir. 1971).
``An election is the preferred method of determining the
choice by employees of a collective bargaining representative.'' United
Services for the Handicapped v. NLRB, 678 F.2d 661, 664 (6th Cir.
1982).
``Although the union in this case had a card majority, by
itself this has little significance. Workers sometimes sign union
authorization cards not because they intend to vote for the union in
the election but to avoid offending the person who asks them to sign,
often a fellow worker, or simply to get the person off their back,
since signing commits the worker to nothing (except that if enough
workers sign, the employer may decide to recognize the union without an
election).'' NLRB v. Village IX, Inc., 723 F.2d 1360, 1371 (7th Cir.
1983).
``Freedom of choice is `a matter at the very center of our
national labor relations policy,' . . . and a secret election is the
preferred method of gauging choice.'' Avecor, Inc. v. NLRB, 931 F.2d
924, 934 (D.C. Cir. 1991) (citations omitted).
Having recognized in Gissel that a secret ballot election is the
superior method for determining whether a union has majority support,
the Supreme Court in Linden Lumber v. NLRB, 419 U.S. 301 (1974), held
that an employer may lawfully refuse to recognize a union based on
authorization cards and insist on a Board-
supervised secret ballot election. Thus, an employer may, but cannot be
compelled, to forgo a secret ballot election and abide by the less
reliable card check method of determining union representation. The
only exception to an employer's right to insist on an election is when
the employer, as in the Gissel situation, has engaged in unfair labor
practices that impair the electoral process.
THE INCREASING USE OF NEUTRALITY/CARD CHECK AGREEMENTS IN ORGANIZING
CAMPAIGNS AND THE ATTEMPT TO MANDATE CARD CHECK
One of the highest priorities of unions today is to obtain
agreements from employers that would allow the union to become the
exclusive bargaining representative of a group of employees without
ever seeking an NLRB-supervised election. These agreements, which are
often referred to as ``neutrality'' or ``card check'' agreements, come
in a variety of forms. In some cases, the agreement simply calls for
the employer to recognize the union if it produces signed authorization
cards from a majority of employees. In many cases, the agreement
includes other provisions that are designed to facilitate the union's
organizing campaign, such as:
An agreement to provide the union with a list of the names
and addresses of employees in the agreed-upon unit;
An agreement to allow the union access to the employer's
facilities to distribute literature and meet with employees;
Limitations or a ``gag order'' on employer communications
to employees about the union;
An agreement to start contract negotiations for the newly-
organized unit within a specified (and short) timeframe, and to submit
open issues to binding interest arbitration if no agreement is reached
within that timeframe; and
An agreement to extend coverage of the neutrality/card
check agreement to companies affiliated with the employer.
Whatever form the agreement may take, the basic goal is the same:
to establish a procedure that allows the union to be recognized without
the involvement or sanction of the National Labor Relations Board.
Neutrality and card check agreements therefore present a direct threat
to the jurisdiction of the Board and its crown jewel, the secret ballot
election process.
An even greater threat to that crown jewel is the grossly misnamed
Employee Free Choice Act--which more accurately should be described as
the Employee Forced Choice Act. The provisions of that proposed
legislation in the House of Representatives would, in nearly all cases,
eliminate government-supervised secret ballot elections and instead
turn the National Labor Relations Board into a card counting agency.
The motivating force behind neutrality/card check agreements and
the proposed legislation is the steady decline in union membership
among the private sector workforce in the United States. Unions today
represent only about 7.4 percent of the private sector workforce, about
half of the rate 20 years ago. See U.S. Department of Labor, Bureau of
Labor Statistics, Union Members in 2006 (Jan. 25, 2007), available at
http://www.bls.gov/news.release/union2.nr0.htm. There are many
explanations for this precipitous decline: the globalization of the
economy and the intense competition that comes with it, the increasing
regulation of the workplace through Federal legislation rather than
collective bargaining, and the changing culture of the American
workplace. While unions may not disagree with these explanations to
varying degrees, they claim that the NLRB's election process is also to
blame. Unions argue that the NLRB's election process is slow and
ineffective, and therefore an alternative process is needed--namely,
neutrality/card check agreements.
I believe there are two basic problems with this argument. First,
it is not supported by the facts. The NLRB's election process is
efficient and fair, as demonstrated by hard statistics. Legislative
change is not needed. Second, neutrality/card check agreements limit
employee free choice and are generally the product of damaging leverage
exerted by the union against the employer, which redounds to the
detriment of employee knowledge and free choice.
THE NLRB'S ELECTION PROCESS IS EFFICIENT AND FAIR
The standard union criticisms of the NLRB's election process are
more rhetorical than factual. Unions argue that the NLRB's election
process is slow and allows employers to exert undue influence over
employees during the pre-election period. Both of these arguments are
not supported by the facts.
The NLRB's election process is not slow. In fiscal year 2006, 94.2
percent of all initial representation elections were conducted within
56 days of the filing of the petition. Memorandum GC-07-03, Summary of
Operations (Fiscal Year 2006), at
p. 8 (January 3, 2007), available at http://www.nlrb.gov/shared_files/
GC%20
Memo/2007/GC%2007-03%20Summary%20of%20Operations%20FY%2006.pdf. During
that same time period, the median time to proceed to an election from
the filing of a petition was 39 days. Id. Based on my experience over
the past 40 years, these statistics demonstrate that the Board's
election process has become even more efficient over time.
Unions are currently winning well over 50 percent of NLRB secret
ballot elections involving new organizing. This is the category of
elections that unions are seeking to replace with neutrality/card check
agreements, and it is also the same category of elections that would be
replaced by the so-called Employee Free Choice Act. If anything,
unions' win rate in representation elections currently is on the rise.
The NLRB's most recent election report summary shows that unions won
59.6 percent of all elections involving new organizing. See NLRB
Election Report; 6-Months Summary--April 2006 through September 2006
and Cases Closed September 2006, at
p. 18. This figure is about the same as it was 40 years ago. In 1965,
unions won 61.8 percent of elections in RC cases (cases that typically
involve initial organizing efforts, as opposed to decertification
elections or employer petitions). See Thirtieth Annual Report of the
National Labor Relations Board, at p. 198 (1965). After 1965, unions'
election win rate declined before rising back to the level where it is
today:
In 1975, unions won 50.4 percent of elections in RC cases.
See Fortieth Annual Report of the National Labor Relations Board, at p.
233 (1975).
In 1985, unions won 48 percent of elections in RC cases.
See Fiftieth Annual Report of the National Labor Relations Board, at p.
176 (1985).
In 1995, unions won 50.9 percent of elections in RC cases.
See Sixtieth Annual Report of the National Labor Relations Board, at p.
153 (1995).
In 2005, unions won 56.8 percent of elections in RC cases.
See Seventieth Annual Report of the National Labor Relations Board, at
p. 16 (2005).
These statistics undermine any argument that the NLRB's election
process unduly favors employers, or that the recent decline in union
membership among the private sector workforce is attributable to
inherent flaws in the NLRB's election process. Unions are winning NLRB
elections at the same or higher rate now than they have in almost 40
years. To be sure, there are ``horror stories'' of employers who abuse
the system and commit egregious unfair labor practices in order to
prevail in an election. I hold no brief for those employers. I have
never represented an employer engaged in such conduct. Indeed, I have
never been involved in a Board-conducted election which was overturned.
As a member of the National Labor Relations Board, I vigorously
enforced the law. In cases of unlawful conduct, the law provides
remedies for the employer's behavior, including Gissel bargaining
orders. But these situations are the exception rather than the norm.
And, there is nothing new about the fact that some employers abuse the
system. In the overwhelming majority of cases where employees choose
not to be represented by a union, they do so based on the information
that is presented by both sides during the campaign process.
Unions attempt to portray the Board's secret ballot election
process as fundamentally unfair (except when unions are faced with a
challenge to their majority status) by making unfavorable comparisons
between Board elections and a typical political election in the United
States. In doing so, unions frequently ignore several important facts
about the NLRB election process:
The union controls whether and when an election petition
will be filed. Imagine if the challenger in a political election
controlled the timing of the election.
The union largely controls the definition of the
bargaining unit in which the election will occur, because the union
need only demonstrate that the petitioned-for unit is an appropriate
bargaining unit. Imagine if the challenger in a political election had
almost irreversible discretion to gerrymander the voting district to
its maximum advantage.
The union usually has obtained signed authorization cards
from a majority of employees at the time the petition is filed. Thus,
the union already knows the voters and has conducted a straw poll
before the employer is even aware that an election will be held.
Imagine if the challenger in a political election could campaign and
poll the electorate without the incumbent's knowledge, wait until the
polls show that the challenger has majority support, and then give the
incumbent less than 60 days' notice of the election.
Even though the union already knows the voters well by the
time the election petition is filed, the employer must give the union a
list of all of the voters' names and home addresses after the petition
is filed. The union, but not the employer, is permitted to visit the
employees at home to campaign for their vote.
The union, unlike the employer, can make campaign promises
to the employees to induce them to vote for the union.
The union, like the employer, may designate an observer to
be present in the voting area for the duration of the election, in
order to check every voter and make sure that no irregularities occur.
These facts illustrate that, far from being unfair to unions, the
NLRB's election process offers unions many unique advantages.
PROBLEMS WITH NEUTRALITY/CARD CHECK AGREEMENTS
The fundamental right protected by the National Labor Relations Act
is the right of employees to choose freely whether to be represented by
a union. 29 U.S.C. Sec. 157. Neutrality/card check agreements limit
employee free choice by restraining employer free speech. Section 8(c)
of the act protects the right of employers to engage in free speech
concerning union representation, as long as the employer's speech does
not contain a threat of reprisal or a promise of benefit. 29 U.S.C.
Sec. 158(c). Unions, through neutrality/card check agreements, seek to
restrain lawful employer speech by prohibiting the employer from
providing employees with any information that is unfavorable to the
union during the organizing campaign. Such restrictions or ``gag
orders'' on lawful employer speech limit employee free choice by
limiting the information upon which employees make their decision.
A second problem with neutrality/card check agreements is the
method by which they are negotiated. In my experience, neutrality/card
check agreements are almost always the product of external leverage by
unions, rather than an internal groundswell from unrepresented
employees. The leverage applied by the union can come from a variety of
sources. In many cases, the union has leverage because it represents
employees at some of the employer's locations. The union may be able to
use leverage it has in negotiations for employees in an existing
bargaining unit, in order to win a neutrality/card check agreement that
will facilitate organizing at other locations. Bargaining over a
neutrality/card check agreement, however, has little or nothing to do
with the employees in the existing bargaining unit, and it detracts
from the negotiation of the core issues at hand--wages, hours, and
working conditions for the employees the union already represents.
In other cases, the union exerts pressure on the employer through
political or regulatory channels. This typically occurs by demonizing
the employer. For example, if the employer needs regulatory approval in
order to begin operating at a certain location, the union may use its
political influence to attack the company and force the employer to
enter into a neutrality/card check agreement for employees who will be
working at that location. Political or regulatory pressure is often
coupled with other forms of public relations pressure in order to exert
additional leverage on the employer. In general, this combination of
political, regulatory, public relations and other forms of non-
conventional pressure has become known as a ``corporate campaign,'' and
it is this type of conduct--rather than employee free choice--that has
produced these agreements.
Thus, when a union succeeds in obtaining a neutrality/card check
agreement, it generally does so by exerting pressure on the company
through forces beyond the group of employees sought to be organized.
The pressure comes from employees at other locations, and/or it comes
from politicians, regulators, customers, investors, and the public at
large. It is a strategy of ``top down organizing,'' meaning that the
target of the campaign is the employer rather than the employees the
union is seeking to organize. And, with the proposed legislation,
unions are seeking to have the government mandate the card check
portion of neutrality/card check for them.
The strategy of ``top down organizing'' stands in stark contrast to
the model of organizing under the National Labor Relations Act. Under
the act, the pressure to organize comes from within--it starts with the
employees themselves. If a sufficient number of employees (30 percent)
desire union representation, they may petition the NLRB to hold a
secret ballot election. If a majority vote in favor of union
representation, the NLRB certifies the union as the employees'
exclusive representative and the collective bargaining process begins
at that point. At all times, the focus is on the employees, rather than
on the employer or the union.
There is no cause for abandoning the secret ballot election process
that the Board has administered for seven decades. The act's system of
industrial democracy has withstood the test of time because its focus
is on the true beneficiaries of the act--the employees. In my view, the
Employee ``Forced'' Choice Act is not sound public policy because it
would deprive employees of the fundamental right to determine the
important question of union representation by casting their vote in a
Board-supervised secret ballot election. Indeed, that it would be
unwise public policy to abandon government-supervised secret ballot
elections in favor of mandatory card check appears to me to be a self-
evident proposition. It likewise would eviscerate the proud tradition
of industrial democracy that has been the hallmark of the NLRB for
nearly seven decades.
the employee free choice act's interest arbitration provisions
In addition to mandating recognition by card check rather than a
secret ballot election, the act would eviscerate another fundamental
tenet of U.S. labor law: voluntary agreement. As the Supreme Court held
in H. K. Porter v. NLRB, 397 U.S. 99 (1970), the act is founded on the
notion that the parties, not the government, should determine the
applicable terms and conditions of employment:
The object of this act was not to allow governmental
regulation of the terms and conditions of employment, but
rather to ensure that employer and their employees could work
together to establish mutually satisfactory conditions. The
basic theme of the act was that through collective bargaining
the passions, arguments, and struggles of prior years would be
channeled into constructive, open discussions leading, it was
hoped, to mutual agreement. But it was recognized from the
beginning that agreement might in some cases be impossible, and
it was never intended that the Government would in such cases
step in, become a party to the negotiations and impose its own
views of a desirable settlement.
Id. at 103-04 (emphasis added). The Employee Free Choice Act would
destroy this bedrock principle of the National Labor Relations Act by
mandating that, if the parties are not able to reach agreement on a
first contract within a 120-day period, the terms of the contract will
be set by an arbitration panel designated by the Federal Mediation and
Conciliation Service. As with the abandonment of the secret ballot
election, I believe this interest arbitration requirement is unwise
public policy. With respect to employees, it would parlay the taking
away of a vote on representation with the taking away of a vote on
ratification. This is because the contract mandated by the interest
arbitrator renders moot employee endorsement. Likewise, it is the
employer that must run the business, remain competitive, and pay the
employees each week.
Newly certified unions often bear a heavy burden to make good on
promises made to employees to gain recognition. In a card check
situation, where there may have been little or no opportunity for the
other side to be heard, expectations are likely to be even higher. But
when these promises come up against reality at the bargaining table, it
is often very difficult to reach agreement, especially where an
employer is already offering competitive wages and benefits to its
employees. When this reality is combined with a lack of any historic
track record between the parties, especially where coupled with
inexperienced negotiators at the bargaining table, reaching agreement
on a package that satisfies the union's political needs while being
economically realistic or even feasible for the employer can be
extremely difficult and time consuming.
In my career to date, I have negotiated in excess of 175 collective
bargaining agreements. As the Director of the Federal Mediation and
Conciliation Service, I personally mediated high profile bargaining
disputes involving multiple contracts covering tens of thousands of
employees. These negotiations are often difficult and first contract
negotiations particularly so. The genius of this system, however, is
that it produces agreements, not imposed solutions to difficult issues.
These agreements are, as Justice Douglas wrote in the seminal
Supreme Court case of United Steelworkers of America v. Warrior & Gulf
Co., 363 U.S. 574 (1960):
``The collective bargaining agreement states the rights and
duties of the parties. It is more than a contract; it is a
generalized code to govern a myriad of cases which the
draftsmen cannot wholly anticipate . . . The collective
agreement covers the whole employment relationship. It calls
into being a new common law--the common law of a particular
industry or of a particular plant.'' (Id. at 578-579).
No outside agency, whether arbitration, courts, or government
entity has the skill, knowledge, or expertise to create a collective
bargaining agreement. If it is not a creature of the parties' creation
it likely will fail of its purpose. The negotiation of a collective
bargaining agreement is the search for mutually resolving each side's
interests. It must be done with trade-offs and separate prioritizing.
Only the parties can do that. There are no standards for arbitrators to
apply. There is no skill set for arbitrators to use. Solomon is simply
unavailable.
I spent 20 years of my practice in Florida where I represented many
public employers in the negotiation of their collective bargaining
agreements. That process, under State law, ended in non-binding
interest arbitration. More often than not, the parties bargained simply
to set the issues up for the arbitrator which resulted in days and
weeks of hearings. The process led to hearings and imposed legislative
body decisions--not agreements. Any process which ends with an imposed
contract will perforce put the parties into their positioning and
arbitrating shoes, not their bargaining shoes.
CONCLUSION
This concludes my prepared oral testimony. I look forward to
discussing my comments in more detail during the question and answer
period, but before that, I would again like to thank the subcommittee
for inviting me here today, and for its attention to these very
important developments regarding labor law in the 21st century.
The Chairman. Thank you very much and we will have quite a
group of our Senators here so we will try and limit our time to
5 minutes.
Mr. Hurtgen, one of the criticisms of the labor laws that
they allow employers to violate the law with almost no
penalties. An employer breaks the law. Unless the worker is
fired the employer typically just has to post a sign saying it
won't continue to violate the law. Even when the worker is
fired, the financial implications are small, far smaller than
any other Federal employment law.
The average back pay remedy for a violation of workers'
rights in 2005 was $3,800. This back pay award is of 10 years
in coming. Do you think the minimal penalty structure provides
a real deterrent to unlawful conduct?
Mr. Hurtgen. I do, Senator, and the answer there is that in
the vast majority of cases, it does. If we focus on the
relative minority of cases where it drags on and on and on and
the income replacement to the employee comes at the end of too
long a period of time, well then it is obvious that that's a
shortcoming and if we could change and fix that, we should. But
to add, as this bill does, to the litigation aspect of these
issues is simply going to prolong it, sir. It isn't going to
bring it to a more quick resolution.
The Chairman. Well, I heard you on that. I was interested,
particularly, in the penalties.
Mr. Hohrein, comments have been made that a secret ballot
is the only way to have a free ballot. What happened in your
situation out there? Whether they had a secret ballot, was that
a free ballot? Is that the equivalent?
Mr. Hohrein. We had a secret ballot election and it didn't
make any difference immediately. The company put pressure on
the people that they believe supported the union. They not
only----
The Chairman. Well how can they tell if it's a real secret
ballot? What you just heard from Peter is that your cards
aren't good because people are going to know the end result.
What we need is really a secret ballot and that is the way this
country has proceeded in the past and I want to hear that you
had a secret ballot--was it really a free ballot out there?
What can you say or was it--did you feel that it wasn't such a
free ballot?
Mr. Hohrein. The company questioned everyone how they were
going to vote. They took people in back rooms and browbeat
them, threatened them with their jobs. They explained that they
wanted to know how they voted and if the union got in, they
were going to suffer. They were going to lose their job or they
were going to shut down the plant or they would simply just
replace everybody in the plant if that is what they had to do.
They had absolutely no respect for this election. They
intimidated people right up to and including the time of the
election.
The Chairman. Let me ask the Professor one additional
question. What has happened over the period of the last 30
years from the time when we had this strong union procedure to
what we have now. What has altered or changed the circumstances
that has brought us to the current situation?
Ms. Estlund. Well employers do seem----
The Chairman. If you can, answer in a minute or so because
I have one final question.
Ms. Estlund. Employers do seem much more anxious to avoid
unionization and they have brought in and actually created a
huge industry of anti-union consultants who have intensified
and raised the level of sophistication of these anti-union
campaigns. Millions, millions, millions of dollars are going
into these anti-union consultants who guarantee victory. So on
the question of penalties, one anti-union consultant told
employees at a seminar what happens if you violate the law. The
probability is that you will never get caught. If you do get
caught, the worst thing that can happen to you is you get a
second election and the employer wins 96 percent of second
elections. So the odds are with you. That's the kind of
deterrent that the law provides currently.
The Chairman. And even if they have findings to go to the
courts, the District Courts, and ruled against the NLRB in a
number of these cases as well. Is that correct?
Ms. Estlund. Yes, that is absolutely right.
The Chairman. Let me ask you--there has been a number of
companies that signed up, Professor--we have Cingular, the CEO
for Cingular in 2002 signed up for this kind of a card, a
reflection of members and they decided to go union and they
have retained the industry leadership in a very competitive
wireless communication field. CWA won. Kaiser Permanente has
done something similar--after years of clashing--they decided
to permit this process to move forward and have had remarkable
success.
I have the list of a variety of different companies that
have done it. Perhaps you would just comment about what has
happened in places where they have tried and where they have
abided by the outcome of this. What has happened at some of the
larger companies, medium companies, and small companies? Has it
been in their economic interest? Have they had a greater kind
of productivity? Have they shown they've been increasingly
competitive? What can you tell us?
Ms. Estlund. Well I think I'd have to rely on the company's
own judgment as to whether it has been good for them. It
appears to have been a very good process and that is what this
law tries to do--it tries to get employers to accept the
employees' right to join a union and the fact of collective
bargaining as a fact of life. Once companies accept collective
bargaining as a fact of life, they can sit down cooperatively
and work out agreements and arrangements that work best for
their particular workplace. That is the genius of collective
bargaining.
The Chairman. Thank you very much.
Senator Isakson.
Senator Isakson. Mr. Hohrein, in that example you were
using, where the company was intimidating, I guess it was Front
Range Energy, is that correct?
Mr. Hohrein. Yes sir.
Senator Isakson. Who won that election?
Mr. Hohrein. The union won that election.
Senator Isakson. I was thinking that my colleagues here--we
go through this process every 2 years of electing our
leadership. The Democrats do it and the Republicans do it.
Senator Alexander was a candidate for the WHIP this year and I
remember the day after the election, he said, I'm writing 27
thank-you notes to 25 people because going into the election
and talking to them one on one, he felt like he had 27 votes
but when the secret ballot occurred and we all get to vote
secretly, the election went the other way. I say that because--
--
Senator Alexander. It was 24.
Senator Isakson. Oh, it was 24, I'm sorry. I have been in
races where the night before the election, the polls were
telling me good news and the next day I got bad news. That's
because people will respond differently when you ask them face
to face or you can poll them on the telephone but they all have
the insurance policy of the secret ballot, which they own.
Mr. Hurtgen, you were an appointee of President Clinton?
Mr. Hurtgen. That is correct.
Senator Isakson. And you also served under President Bush?
I think you made a statement--the law is what it is but there
may be some things that do need to be overhauled. Do you have
any suggestions on that?
Mr. Hurtgen. Well, not in the moments that I have here,
Senator. I think it probably needs a fundamental overhaul and
that means that we shut down and look at what the workplace is
really like today and what role unions can play and how they
will play it and always keeping in mind that we have employee
interests that need to be served but we have our competitive
employers in a furiously competitive world that has to be
served as well. So our system of labor and employment
regulation and dispute resolution has to be brought into the
21st century and one piece of that legislation or another isn't
going to do it. I think it needs an overhaul, sir.
Senator Isakson. In 2005, there were over 2,300 NLRB
elections. In 19 of those elections, a re-vote was needed.
That's 19 out of 2,300. That's .8 of 1 percent. Has that
declined over the years since the passage of labor law or is
that pretty indicative of what it has always been?
Mr. Hurtgen. I can't give you an accurate answer to that
question, Senator, but I can tell you from my own experience
both as a practitioner as well as a member of the Board, the
number of elections that have to be rerun has always been
small. But I can't tell you how those percentages are changing
over time.
Senator Isakson. Dr. Estlund, you might be able to help
with this particular question because I think and I may have
heard it wrong so please, pause if I did. I think in answering
one of Senator Kennedy's questions, you were referring to rerun
elections overturning the first election, is that correct?
Ms. Estlund. The standard, the worst that can happen in the
case of illegality is that there has to be a rerun election and
employers win 96 percent of the rerun.
Senator Isakson. Of the reruns.
Ms. Estlund. That was quoting anti-union consultants.
Senator Isakson. Does NLRB act on its own violation or can
any organized labor union who is petitioning for a vote and has
a vote and loses, can they petition immediately to have a
rerun, based on grounds of coercion?
Ms. Estlund. Well, the problem, Senator, is that it takes
off 10 years for these unfair labor practice charges and
charges of tainted elections, to work their way through the
process. So by the time the Board gets around to invalidating
the first election, years have gone by and the organizing drive
is just long gone. The turnover in the workplace, just the
natural turnover in the workplace as well as the forced
turnover--employers' efforts to rid the workplace of union
supporters means that the organizing drive is just long dead
and gone by the time that rerun election comes along.
Senator Isakson. Thank you very much. Thank you, Mr.
Chairman.
The Chairman. Senator Clinton.
Statement of Senator Clinton
Senator Clinton. Thank you very much, Mr. Chairman and
thanks so much for holding this hearing about this important
legislation. I really appreciate all the witnesses being here
and I'm struck by the testimony--
My goodness. Bring in a union electrician.
[Laughter.]
I'm struck by the testimony from both Dr. Mishel and
Professor Estlund about the direct connection between the
upward movement of American living standards and the creation
of the American middle class and the successful effort to
unionize our workforce starting in the 1930s and moving through
the 1960s and now we can see a drop off and what Dr. Mishel
appropriately calls Middle Class Squeeze, in part because
workers----
[Laughter]
The Chairman. Do you want it turned off? Hold just a
second. I don't know whether that's going to be the answer.
Maybe if we're all very quiet, we can hear.
Senator Allard. You can come over here on this side and
we'll be happy to have you use one of our mics.
[Laughter.]
We're very generous that way.
Senator Clinton [continuing]. And I really would like to
emphasize a few points. Too often, we get into this conflict--
are we pro-union or pro-employer? What are we really--whose
side are we on? And I think we're all on the American side and
it seems to me that we had a real decline in the unionized
workforce and a number of us are concerned about what that is
doing to not just labor standards but living standards. So
we're trying to figure out, what is the best way to get back to
a level playing field with a balance of power that worked so
successfully through much of the 20th century.
Dr. Mishel, I'm struck by--in your written testimony, the
section about your decades--the decades of research that has
been done. A substantial effect unionization can have on
performance and you pointed out that it seemed at first to be a
mystery. How did unionized costs go, for example and keep
successfully with nonunion Walmart, those Costco's labor costs
are higher. And I think it is important to just reiterate those
four basic findings that have been proven not just by personal
observation but by decades of research as to why that seeming
contradiction would, in fact, be understandable.
Mr. Mishel. Thank you very much, Senator. First of all, the
point that for the vast middle class to benefit from economic
growth, to have a strong vibrant labor movement is essential to
that, that point you first made. I would note that in the last
year for which we have data, from 2004 to 2005, the bottom 90
percent of the population did not receive any income growth.
Only the upper 10 percent and the upper half of the upper 1
percent received a 16 percent rate of growth. Some of that is
because of great capital gains. They own wealth. They get
income from that but those who are primarily wage earners have
not seen growth for many years.
Employers, on the other hand, are doing spectacularly well
with their profits. Capital income is a share of total income
being really the highest in many years. So yes, workers can get
a union. Unions can help equalize wage income within the union
sector and in the economy as a whole and they don't hurt
productivity because workers with a voice don't quit. There is
lower turnover. Workers with a voice help their employers be
more productive. Unions that force higher wages have employers
who tighten up on management, increase investment and improve
technology and last, unionized employers use high performance
workplace practices and get training and so the idea that
somehow unions get work rules that make employers uncompetitive
is just not true.
Senator Clinton. And Professor Estlund, you have mentioned
that available data indicates that far more workers claim
coercion from employers during an election than claim coercion
from their coworkers with card check. Again, I think there is
this assumption that if your coworker just came up to you and
said, You really want a union, don't you, so please sign this?,
that that would be more intimidating than somebody saying,
you're going to lose your job if you sign that. I mean, I think
your job is a huge impediment to people feeling free to express
their opinion. But, would you say that the data is consistent
with what seems to be common sense that the employer holds a
lot more sway than a coworker does?
Ms. Estlund. Absolutely. In fact, maybe more surprisingly,
the data suggests that workers feel much less pressure from the
union than from the employer, even in a card check election,
which the concern has been expressed that only the union is
able to put pressure. That's just not true. The employer is in
that process. This is not a secret process. The employer has
the opportunity and has used the opportunity to exert pressure
on employees as well as to give them information. So yeah,
employees experience less pressure in card check than in
election campaigns from any source but much less pressure from
unions than from employers, even in card check.
Senator Clinton. Is it your experience that the friend-to-
friend, worker-to-worker situation is less coercive than the
employers' attempt to try to influence the outcome of an
election?
Mr. Hohrein. The employer is a potentate. They hold all of
the control. I am the example of union coercion in the plant. I
asked people a simple question. I said, if you had the
opportunity, would you vote for a union and they either said
yes or no and that was the extent of that coercive
conversation.
Senator Clinton. Well, Mr. Chairman, I think it's important
to put this in a larger context and to look at the benefits to
our economy by increasing the share of unionized workers in the
private sector because we are moving around and it has been my
experience. A lot of people on the front line and doing the
work have a lot of wisdom about how this would work--because
there is no real way to get that way first. So again, Mr.
Chairman, thank you for the hearing.
Statement of Senator Alexander
Senator Alexander. Thank you, Mr. Chairman. Mr. Hurtgen,
these proposals seem to me to be really breathtaking in their
scope in terms of changing labor law in this country. I mean,
one gets rid of the secret ballot for union elections. Two
seems to fundamentally get rid of free collective bargaining,
at least that's my impression and Senator Isakson already
reminded us of the experience that we have here in the Senate.
We all have it in our everyday lives, in our clubs and when we
elect people. Here, when we elect our leadership. Sometimes
over a period of time that you can line up 27 votes and then on
election day, when secret ballot comes, you end up with 24 and
the objective--the objective is to really find out what a
majority wants to do.
It seems to me that the secret ballot is essential to that
in a union election. So I wondered if you could say something
more to me about the origins of the secret ballot in union
elections, why it was thought to be fair. Common sense would
say to me that it would be one of the last things we would want
to throw out. But why was it put in in the first place?
Mr. Hurtgen. Well, Senator, I haven't reviewed the debates
from 1935 when the Wagner Act was originally introduced and
passed, but I have seen quotes or statements from it that even
then, discussion was had about maybe there needn't have to be a
secret ballot election. It was indicated back then that the
secret ballot was far preferable to any other way of
determining employee choice. It has always been lawful for an
employer to recognize a union based on cards signed but it has
always been felt to be highly less desirable. The unions
themselves, as recently as 1998, when I was a board member,
there was a case before us, Levitz Furniture and the AFL/CIO,
the United Auto Workers as well as United Food and Commercial
Workers, in their brief to us at the board said, a
representation election is a solemn occasion conducted under
safeguards to voluntary choices. Other means of decisionmaking
are not comparable to the privacy and independence of the
voting booth and the secret ballot election systems provides
the surest means of avoiding decisions, which are a result of
group pressures and not individual decisions.
In addition, less formal means of registering majority
support are not sufficiently reliable indicia of employees'
desires on the question of union representation to serve as a
basis for requiring union recognition.
Senator Alexander. But may I go on?
Mr. Hurtgen. That's what the unions said.
Senator Alexander. But may I go on to another question--I
was trying to imagine the outcry if we suggested that in our
Presidential election, for example, we said to the Democratic
party and the Republican party, go out and spend the rest of
the time between now and November 2008 getting people to sign
cards about how they want to vote, what they want the result to
be. We don't do that. We do as we do in union elections. We are
very careful about making sure the ballot is secret and that
they are counted carefully.
I felt like you didn't have quite enough time although
Senator Kennedy was generous with time to you, to say
everything you want to say about binding arbitration. Again,
that seems to me to be as breathtaking in its scope as the
abolition of the secret ballot. Free collective bargaining in
my idea has always been the idea that once a union is
recognized by a majority vote, by secret ballot, then it
becomes the exclusive bargaining agent and it's bargaining.
It's not vocation by an outside party--this changes that.
Mr. Hurtgen. Yeah, it does and it changes it fundamentally,
Senator. To add to what I said previously, I think I would only
say that the collective bargaining agreement is a complex set
of trade-offs and prioritization by employers and by unions and
the first time they do this, it is very difficult,
understandably.
There are two silent parties at that bargaining table
besides the employer and the union involved. It's the
employer's competitors and it's the other employers' union
contracts that that union has secured in that industry and that
business and it is critical to the employer in those
negotiations that they not lose ground to their competitors and
it's important to the union that it doesn't give up something
that it has secured from other employers with whom it has a
contract.
So both sides have a motive to be particularly intransigent
on some items. But the beauty of collective bargaining is that
if it's done in good faith, it will produce an agreement and it
will produce the tradeoffs and the prioritizations that are
necessary and no outside entity, whether it is an arbitrator or
a court or the Labor Board or any other entity, no outside
entity can do that for the parties. They have to do it
themselves. That's the nature of the bargain and if they do it
in bad faith, the board will remedy that and order them to do
it until they get it right. Now, that's unusual but it happens
but the vast majority of collective bargaining negotiations in
this country are done with difficulty but they get done.
The Chairman. You're up, Jack--Senator Reed.
Senator Reed. Thank you very much, Mr. Chairman.
The Chairman. And you'd follow Senator Brown.
Senator Reed. I'll be brief as well as short.
[Laughter.]
Statement of Senator Reed
I think it is important to underscore the point that
Senator Kennedy made in his opening remarks--that the growing
inequality of income and wages and of opportunities in this
country has to be addressed and one of the contributing factors
to that is the declining unionization and Chairman Bernanke
made a speech in Omaha in February and he pointed out, whatever
the precise mechanism through which lower rates of unionization
affected the wage structure, the available research suggests
that it can explain between 10 percent and 20 percent of the
rise in wage inequality among men during the 1970s and 1980s
and frankly, I think since the 80s, it has accelerated.
So if we're really committed to equality of opportunity and
more equal distribution of the success of our productive
enterprises, I think we should be committed to allowing a
better procedure for selection of representation and I think
this act might offer that.
Professor Estlund, one of the points that struck me when
you made your statement is the fact that the notion of the
secret ballot is really more fiction than reality because there
is a deliberate attempt on behalf of many organizations to hire
very sophisticated people and use techniques, legal techniques,
to determine precisely how people will vote before they are
going to vote, influence them in positive or otherwise ways to
vote against unionization. This is very much unlike what is
done in our ideal secret ballot where people are not
individually persuaded. Is that a fair estimate?
Ms. Estlund. Yes, imagine Senator if in your first run for
election, the incumbent employed all the voters and got to
spend 8 hours a day job owning them about why they should vote
against you. It's not like anything that we normally associate
with a secret ballot election. Job owning the worker, trying to
find out how they're going to vote and inducing them to fear
what is going to happen in general and that whatever the result
of the election, your incumbent would stay in office. They are
still around to bring about the terrible consequences that they
predict will happen if the union is in place.
So unfortunately, the secret ballot becomes a kind of
trapping of democracy that--it's more of a parity of democracy.
That's the only point in the process that the NLRB actually
supervises, is the casting of ballots but given all that has
often come before, it's not something we would recognize as
democracy.
Senator Reed. And you've made the point, too and I think
Dr. Mishel also has that there is less apparent complaints in
the card check process than there is in the ballots. Is that
based upon data analysis? It's not just----
Ms. Estlund. Yes, it's based on a 2005 survey that was
looking at 2002 elections, both formal elections and card check
procedures and what they found was less coercion overall in the
card check process but less coercion from the union than from
the employer, both in card check and in the election process.
Senator Reed. Dr. Mishel, I just want to ask a question. If
more reliance is going to placed on the card check, are there
things that should be done to make that a fairer system? I
mean, after all, I think we'd like to feel that any system we
employ gives a fair chance, not only to members seeking
representation by unions but also the management to make their
case.
Mr. Mishel. Research has shown there's never been a wider
gap between employee desire for union representation and their
ability to get representation right now. It's hard to think of
a more broken system. But I'm actually quite enlivened by the
discussion here today, the commitment to free collective
bargaining by fellow panelists and some of the senators. I
would suggest that there are 30 percent of workers in this
country that are denied free collective bargaining in the
public sector. We must forthwith legislate that there be
collective bargaining for all public employees and that all
public employees subject to not allowing free collective
bargaining and the right of strike that are subject to
arbitration, such as in Florida, or Wisconsin where I went to
grad school or New York State where I was a Professor at
Cornell. We need to abolish these forthwith. Thank you.
The Chairman. Thank you very much.
Senator Roberts.
He's inviting your employees to organize.
Statement of Senator Roberts
Senator Roberts. Senator, did you have to mention the final
four when you started out? Was that something that you had to
mention?
The Chairman. I hoped we had gotten one by you but----
Senator Roberts. But we're going to unionize the University
of Kansas basketball team by a not-so-secret ballot to see if
we can't get something done.
[Laughter.]
We have a Tyson's plan out in Holcomb, Kansas. We have
about 35,000 people in a very large operation, who aren't
unionized and at this particular plant, they pay the highest
wages and the benefits of any plant of the 300 that they have.
This is a very big operation. And they put this method to the
test after some union organizers and I don't mean to use that
as a majority by any means but it was largely a steelworker's
rep who came out to Holcomb, Kansas after finding it, from
Kansas City and they submitted enough signed cards to the NLRB.
This was the second time around, once in 2000 and then now and
it was only 30 percent because of the nature of the complaint
and requested a secret ballot vote.
The workers overwhelmingly rejected the effort to unionize
at the plant by a 3 to 1 vote, 2,466 workers, 1,610 voted in a
private way to reject the unionization.
I think it is clear from these results that the employees
who had initially signed cards in front of the union organizers
and their persuasion, changed their minds once in the privacy
of an election booth. Now I wasn't present there. I don't know
about the pressures that were brought to bear by the so-called
professional people there at Tyson's, et cetera, et cetera.
But if the Employee Free Choice Act was in place, 1,610
employees would be represented by a union against their wishes.
That was more than the first time around, when about 80 percent
in 2000 voted the same way. So I guess my question would be to
Ms. Estlund, if this legislation were enacted, would there be a
way that an employee could request that their card not be
counted if they change their mind?
Ms. Estlund. Absolutely. The law would provide that the
NLRB has to pass on the validity of the cards before they can
change the status quo. So one thing to point out----
Senator Roberts. If an employee wanted to change their card
after being presented the card by their peer group, which of
course, is a pretty powerful instance, could the employee,
without any NLRB or meetings, could they change that?
Ms. Estlund. Before the process is finished, yes. They can
change their mind during that process. One interesting thing to
note is that there is a way in which card check is a better
protection of the minority than the election and that is
because you have to get over 50 percent of the entire
bargaining unit, not just 50 percent of those people who show
up at the voting booth and as you all know, voter turnout makes
a difference.
We have to keep in mind that first of all, this law will
not abolish secret ballot elections. They will take place under
a variety of circumstances. We also should keep in mind that
there is nothing either inherently suspect or dramatically new
about reliance on cards. Until 1947, employers did not have the
right to reject majority signup and to refuse to recognize a
union that presented a majority of cards and even now----
Senator Roberts. The only point that I would make and my
time is expiring and I apologize for interrupting. I have to
lower taxes for Massachusetts and the Finance Committee here in
about 5 minutes. So at any rate, you have a situation where
we're 50 percent--actually it wasn't, it was 30 percent but
because of the nature of the complaints, why the NLRB said
okay, let's go ahead and have this but you have for 50 percent
in one case and 30 percent on a card check in another place and
then 80 percent votes going the other way. I can't imagine any
kind of arm-twisting that would have produced that and were
this the case, I think that the democratic process that we all
want to see would have been subjected to something that
shouldn't have happened. I thank you very much and I apologize
for interrupting.
[The prepared statement of Senator Roberts follows.]
Prepared Statement of Senator Roberts
Thank you Chairman Kennedy and Senator Isakson for calling
this hearing. Thank you also to the witnesses for taking time
from your busy schedules to provide your insight regarding the
National Labor Relations Board.
I want to start by affirming that I support worker's
rights. The 1935 National Labor Relations Act (NLRA) created a
set of rules to protect employees in the workplace. During that
time, card-check was used as the sole source to form a union.
In the next 10 years that followed, it became clear this system
was flawed. Union organizers were becoming notorious for
intimidating workers to sign cards. Workers demanded a change,
and in 1947, the NLRA was amended to include secret ballot
elections.
The Employee Free Choice Act as passed by the House would
undo this fix, and allow us to return to the failed policy of
card-check unionization. I am deeply concerned with this
legislation. I believe the secret-ballot is essential in
protecting employees from intimidation from both employers and
unions. In fact, NLRB reports that only about 1 percent of
secret-ballots have been re-run due to allegations of
misconduct. Put simply, the secret ballot works.
The folks at the Tyson's plant in Holcomb, Kansas recently
put this method to the test. After union organizers were
successful in submitting enough signed cards to the NLRB, they
requested a secret ballot vote. Workers overwhelmingly rejected
the effort to unionize at the plant by a 3 to 1 vote. Out of
2,466 workers, 1,610 voted in a democratic and private way to
reject unionization. It is clear that from these results,
employees who had initially signed cards in front of union
organizers, changed their minds once in the privacy of an
election booth. If the Employee Free Choice Act was in place,
1,610 employees would be represented by a union against their
wishes.
The card check portion of the bill is not the only
troubling part of the Employee Free Choice Act. Additionally,
the bill demands government arbitration if a contract is not
successfully negotiated in a certain amount of time.
Consequently, instead of the employers and unions working
together to reach an agreement, government arbitrators with
limited knowledge of the company or the employees, will be
making binding contract decisions.
After reading through the bill in its entirety, it appears
as though the Employee Free Choice Act is grossly mistitled.
The legislation actually strips workers of their fundamental
right to vote in secret. While claiming to be a benefit to
workers, it seems as though the only benefits gained are
enjoyed by union leadership.
Now I would like to ask a few questions to the witnesses:
Mr. Hurtgen: From your experience at the NLRB, do you think
we could see a repeat of what happened in the 1930's with union
intimidation if this bill were to succeed?
Mr. Mishel: In your testimony, you talk about democracy,
and how unions have restored democracy and allowed weak and
vulnerable groups to be heard. If the Employee Free Choice Act
were enacted, that plant I talked about in Holcomb Kansas would
be unionized right now despite the fact that only 25 percent of
workers actually want it. How is this a democratic process?
Ms. Estlund: If this legislation were enacted, how could an
employee request that their card not be counted if they changed
their mind?
Mr. Hurtgen: Why do you think unions have experienced a
drop in membership over the years? Do you think it is because
of the secret-ballot election?
The Chairman. Senator Brown.
Statement of Senator Brown
Senator Brown. Thank you, Chairman Kennedy. I want to
expand on the Chairman's charts on the shrinking middle class
and what's happened in the postwar years, especially what has
happened in the last 30 years to declining wages and increasing
productivity. I want to illustrate with a story about--a few
years ago, on my own expense, flew to McCallum, Texas and with
a couple of friends, rented a car and went across the border to
Reinosa, Mexico and I visited an auto plant that looked just
like an auto plant in Lorraine, Ohio or anywhere else in our
country except it was newer and probably had even more updated
technology. The floors were clean, the workers were working
hard, the technology was new. There was one difference between
the American auto plant and the Mexican auto plant and that is,
the Mexican auto plant didn't have a parking lot because the
workers don't make enough to buy the cars they make and you can
go to a Nike plant in China and the workers don't make enough
to buy the shoes they make or you can go to a Disney plant in
Costa Rica and the workers don't make enough to buy the toys
for the kids that they make or to a Motorola plant in Malaysia
and the workers don't make--one after another and that's there,
this is here. That's a place where they don't have free trade
unions.
This country, as Senator Kennedy's chart earlier, showed
that what our history was, was that productivity--as workers'
productivity went up, wages typically went up with workers'
productivity. The lines were generally historically pretty
parallel. If workers are making more money for their bosses,
then they make more money. They share in the wealth they
created and we have seen in the last few years in this country,
productive workers are not sharing in the wealth they create to
the degree that they used to and that's why the middle class or
fundamentally, that's why the middle class has shrunk.
Unionization is not the whole answer, to be sure but we
surely can trace, as Senator Kennedy did, the declining rates
of unionization with a declining connection between
productivity and wages. So I would like Professor Estlund--you
had talked about the highly paid consultants coming in and
getting better and better and more and more sophisticated, more
and more refined in their techniques. You didn't give us much
detail. Would you sort of run through--take 2 or 3 minutes if
you would and run through what exactly these consultants, these
law firms, these firms that specialize in union activity for
management side, what they do.
Ms. Estlund. Well, first of all, something over 80 percent
of employers hire anti-union consultants so we shouldn't think
this is an isolated or unusual phenomenon and I wouldn't want
to suggest that all anti-union consultants or all consultants
in this situation act identically but there is a very, very
strong pattern of encouraging and guiding employers step-by-
step through a really relentless process of first of all
finding out who supports the union. People suggest having
multiple meetings per day with employees that they fear are
supporting the union.
So when we ask, what kind of arm-twisting would it take,
well, these consultants have it down to an art. They guarantee
victory and they tell employers exactly what kind of arm
twisting----
Senator Brown. They literally say, we don't get paid unless
we win, in some cases?
Ms. Estlund. Yes, right, exactly. They give sort of a
money-back guarantee that you will win this election because
we'll show you how to do it. We've done this. We've got time-
tested techniques and it's relentless pressure on the workers
and some of it is legal; some of it is illegal. But it's quite
possible to create an egregiously hostile environment. Under
any discrimination statute, we would call it the worst kind of
hostile environment, actionable with damages. Here, it's
considered to be management's prerogative.
Senator Brown. What is legal that they do in addition, in
these meetings? What can they legally do?
Ms. Estlund. Well, first of all, the fact that they can
compel employees to come to these meetings on pain of discharge
and they can basically tell them they can't--the pro-union
employees in these group meetings, as Errol reported, are not
allowed to speak. So they can have these captive audience
meetings, both in groups of workers and one on one with the
employees' own supervisors, hammering away on why a union would
be bad, not just why you're going to get fired for supporting a
union but why you and your coworkers will be living in a
hellish environment if the union gets in--nothing but conflict,
violence, strikes--we won't give an inch. A great deal of that
is entirely lawful. It's considered to be management's
prerogative in running its business. We don't see things that
way under any other discrimination law.
Senator Brown. Thank you. Thank you, Mr. Chairman.
The Chairman. Senator Coburn.
Statement of Senator Coburn
Senator Coburn. I just want to respond, having had three
elections of the Teamsters in plants that I ran. Your testimony
is entirely erroneous. There are very specific rules under
which employers have to follow. You cannot threaten to fire.
You cannot threaten to close a plant. You cannot threaten to
demote. If you do, that complaint can be--and every time that's
happened and that gets adjudicated, the employer loses. So
let's be fair about what employers can and can't do. There is a
very strict bar set of what employers can and cannot do.
Senator Kennedy, would you please list--put that chart of
yours back up on productivity and wage growth? Because I think
it's very important. One thing we haven't talked about--how do
we explain this? How do we explain what is happening? I'm going
to offer an explanation. It's called 12 million illegal aliens,
is one of the reasons that we haven't seen the wage rise in
this country because you have 12 million people competing for
jobs that otherwise wouldn't be here, which would raise the
demand for workforce, which would markedly increase salaries in
the lower/middle income. That's one of the reasons why we have
to address the immigration problem that's in front of us.
I want to also follow on a little bit of a line. If the
State of Oklahoma allows initiative petitions and we have a
requirement that you have to have so many hundred thousand
signatures and if you do that, then you can have a ballot
initiative. If we were to correlate that with what we're
proposing in the Employee Free Choice Act, what it would say is
a vast minority of the people of Oklahoma could change the law
without it ever going to a ballot because we could say you
could have an Employer Free Choice Act in the State on an
initiative ballot. The legislature would never have to put it
on the ballot. The people would never have to vote and whoever
could come up with an initiative, we'd take away the right to
vote.
I also want to go back and ask this question. Of the firms
that have now agreed to card check, none of those firms that
I'm aware of agreed to binding arbitration at 120 days, did
they?
Ms. Estlund. I don't know what they did but these are firms
that apparently are willing, if the workers accept--want to
have a union, they are willing to sit down. That's not the
problem.
Senator Coburn. I understand but that is their choice to do
that and they can do that today without any change in the law.
As a matter of fact, they're doing it today without any change
in the law. But none of those firms who agreed to do that,
agreed to have binding arbitration within 120 days. And that's
a very big difference. If you told those firms, you're going to
an Employee Free Choice Act and you can agree to do that but if
you do that, you have to have binding arbitration. If you can't
negotiate the labor agreement with your employees, then in 120
days, we're going to find one for you.
Mr. Mishel. Senator, there is an old saying that the
majesty of the law prohibits both beggars and rich people from
sleeping under bridges and the fact is that the workers who
need the binding arbitration of first contracts are not
necessarily the ones where the employers now will permit
majority signup. So you're basically----
Senator Coburn. I understand but the point is----
Mr. Mishel. The point is, the people who need the arbitra-
tion----
Senator Coburn. The point that was made is we held up an
example of firms that are doing that today and yes, they are.
They have the right to do that today. But they did it not under
the coercive nature of knowing that in 120 days, somebody is
going to write a contract for them. Somebody outside of their
best interest and their employees' best interests, maybe. We
don't know.
Finally, when it comes to job owning, the experience that I
had in three episodes of organizing attempts is we erred on the
side to be sure that we didn't and quite frankly, the NLRB
rules are very pro-union when it comes to what you can say and
what you can't. And I'll give you some specific examples. Three
hundred and fifty employees in Petersburg, Virginia--the union
told them they'd get an immediate $3.00 an hour raise if they
voted in the union. I couldn't comment on it under the laws of
the NLRB. I couldn't comment whether you would or you wouldn't.
I could make no comment under the law about that claim. Now,
you tell me if that's a fair set of rules.
I don't doubt your testimony, Professor, that they violate
that. I'm not doubting that. I'm sure that happens a lot. But
the idea that job owning is a threat to organizing is something
that hasn't changed in years. It's whether or not we enforce it
and maybe the problem is that we need heavier enforcement from
the NLRB on the processes.
The final point I would make is one of the reasons I think
that we haven't seen the amount of unionization that many in
this Congress would like to see is because basically, the
unions don't offer what they used to offer. One reason is, many
of the things that unions offer, we've now put into law. There
are Federal statutes that require segment after segment after
segment after segment of things that used to be negotiable are
no longer negotiable because they are Federal law. So I would
think our best efforts would be more likely successful if we
spent time improving the value that the union offers to the
employee rather than changing the voting.
Mr. Chairman, I'd like to enter in a response from the
Congressional Research Service about secret ballots that we
requested and also an opening statement, if I could.
The Chairman. Good. It will be so included.
[The prepared statement of Senator Coburn follows:]
[The Congressional Research Service response can be found in
additional material.]
Prepared Statement of Senator Coburn
Chairman Kennedy, thank you for holding this hearing. This
is an extremely important issue for our economy and I'm glad we
will be studying this bill closely before acting on it.
The testimony is puzzling because the positions are so
opposite. Usually in testimony you can find some common ground
or some place to begin, but not so with this issue. You have
witnesses telling us that the situation is as different as
night and day which should cause us to really scrutinize this
bill.
The other thing that doesn't make sense is why this
legislation is needed. The data from the National Labor
Relations Board shows that when union elections occur, unions
are winning nearly 60 percent of the elections. That seems like
a pretty good win ratio. I'm not sure if the aim of this
legislation is to increase that win percentage to 75 percent or
90 percent or what but what the NLRB data shows is that 60
percent is as high as it has been historically over the past
few decades.
The general voting public does not seem to support this
legislation. A 2007 survey found that 87 percent of voters
agree that workers should continue to have access to a secret
ballot election. Eighty-nine percent say that a worker's vote
on whether to organize a union should be kept secret and the
same amount believes the secret ballot is a better process than
card check. In addition to that, a Zogby poll shows that 56
percent of all non-union workers would oppose bringing a union
to their workplace. The same Zogby poll shows that more than 70
percent of workers are content with their job and 64 percent
say they have opportunities to advance with their present
employer.
The survey indicators suggest that this bill may just be a
political payoff to special interest groups because it doesn't
look like the unions need help winning the elections or that
workers see a great need for unionization. There's been a lot
of talk up here about doing things that are just for political
purposes so I hope we won't rush this and we will take our time
to really scrutinize the substance of this bill.
The Chairman. Just as a comment on my chart, I thought we
had about 135 million people in the labor market, if we're
going to address the immigration but if there are 3 or 4
million that are undocumented that are working, I'll be
surprised. Out of a 135 million, to explain that chart because
it's undocumented, I find that's a stretch but the Senator--we
may differ on that.
Senator Coburn. Well, it's called the in-elastic supply
demand curve associated with either an excess or a decrease of
workers.
The Chairman. I'm familiar with that. I still don't see how
that applies to that particular chart. I think we both have
expressed ourselves and we have Senator Obama.
Statement of Senator Obama
Senator Obama. Thank you, Mr. Chairman. Thank you to the
panelists. It's been a very informative conversation and I
appreciate the testimony that was provided. This may have
already been mentioned prior to my arrival but I just want to
make sure that we highlight this point.
Under current law, employers are not only allowed to but
required to withdraw recognition from an existing union if the
employer knows, on the basis of valid cards or other evidence,
that a majority of employees does not support a union. I'm just
reading off your testimony. Current law thus allows employers
to rely on valid authorization cards in lieu of an election to
displace an incumbent union and if the employer chooses to
recognize a new union.
So I just want to be clear on this, that the way the law is
currently structured, if an employer decides, you know what? We
want to go without a secret ballot and collect a bunch of cards
showing that in fact we want to de-certify, that's permissible,
am I right?
Ms. Estlund. Yes, that's right. I think if you step back
and look at the way the law regards authorization cards, it
looks like the assumption behind the law is that we just have
to be a whole lot more careful about letting employees get a
union than we have to be about denying them a union.
Senator Obama. Right. OK, just another aspect in your
testimony, Professor, that I want to highlight. The HR Policy
Association, an opponent of card check recognition, identified
113 cases in the 70-plus year history of the act that they
claimed involved coercion, fraud or misrepresentation in
securing union authorization cards. Is that accurate?
Ms. Estlund. That's my understanding and fewer than half of
those actually, upon closer scrutiny, seemed to actually
involve union coercion. It's obviously a drop in the bucket
compared to the history of employer coercion.
Senator Obama. OK. One of the difficulties of this kind of
hearing is that the facts often don't get in the way of
ideology and we have a situation here where some people feel
very strongly that unions aren't the important contribution to
the economy or an impediment in economic growth and there are
those of us like myself who think that that chart that Senator
Kennedy put up describes in vivid illustration the fact that as
workers have gotten less bargaining power, they are less able
to extract a fair share of the enormous gains in productivity
and wealth creation that this country has enjoyed.
So I do want to give any of you a chance to address what
seems to be a discrepancy. It may just be that Senator Coburn,
when he was running that plant, was following the rules to the
letter and that's not the typical experience. But does anybody
want to talk to his point that in fact, the problem here may
just be simply one of enforcing the existing rules as opposed
to a need to change the rules?
Mr. Hurtgen. Senator, I thank you for the opportunity to
elaborate. I think what Senator Coburn said is exactly correct.
The vast majority of employers take seriously the current law
concerning what they can and cannot say during these campaigns
and they stay within the limits of the law. Now, Professor
Estlund disagrees with some of the legal statements employers
can make and that is, of course, a debate that reasonable
people can have. But Senator Coburn's experience mirrors my
experience of over 40 years. Employers don't set out to violate
the act.
Senator Obama. Mr. Hurtgen, let me just stop you there
because I want to make sure that I pinpoint the issue that
you're raising here. What you're arguing is that the employers
are abiding by the letter of the law. Is that your basic
argument?
Mr. Hurtgen. That's correct.
Senator Obama. So if that is the case and yet despite the
majority of employers observing the letter of the law, it turns
out that we still have an overwhelming number of workers who
would like to join unions finding themselves unable to do so,
then it would suggest to me that we need to change the law to
make it a little easier for them.
Mr. Hurtgen. You put the rabbit in the hat, Senator, when
you say the overwhelming majority of employees want to join a
union. The issue is how do you decide that?
Senator Obama. Are you disputing then or do you think that
the statistics that have been presented in terms of the number
of workers who, when polled, say that they would like to join a
union versus the number of workers who are actually in a
union--do you think those numbers are being doctored? Or do you
think----
Mr. Hurtgen. I don't attribute any inappropriate conduct by
the takers of those polls but they are difficult to interpret
and I can't extract macro poll numbers and say therefore the
employees of this particular bargaining unit in this employer's
workplace, in this city or county or town, should have a union.
That's for them to decide. That's my whole point. They should
have a secret ballot to make that decision and if you're right
and the others are right, that the overwhelming number of
people who are given that opportunity would see it your way,
then they'll vote yes.
Senator Obama. So you don't think there are any structural
barriers at all for workers to join a union at this time?
Mr. Hurtgen. I don't think the National Labor Relations Act
as such, provides structural barriers, no sir, I don't.
Senator Obama. Mr. Hohrein.
Mr. Hohrein. The company I work for, Senator, had no
respect for their people, had no respect for the law. They
violated the law constantly. Their attorney that was the labor
buster actually told them not to allow even the discussion of
union in the workplace, even though that's legal. They simply
violated my rights and the rights of those people in that plant
to have a legitimate union campaign and I would really like to
emphasize that unless something happens in this country pretty
soon, we're going to see some dire straits for working people
and I really appreciate the opportunity to let you know that.
Senator Obama. Mr. Chairman, I know I'm out of time but I
just want to make one last point, if the committee will bear
me. Mr. Hurtgen, I guess one last point I'm just curious about
in your view, when you've worked with the National Labor
Relations Board. Is it fair to say that if you are a worker
trying to start a union drive and you get fired, even if it is
illegally, that you getting recourse through the legal process
is difficult and that if you are somebody who is earning maybe
$30,000 a year, you might be going 6 months without a paycheck,
a year without a paycheck, 2 years without a paycheck. Is that
under existing law? Is that a fair characterization?
Mr. Hurtgen. It is possible, Senator but I counsel that in
the vast majority of such cases, if that employee--himself,
herself or through some representative, gets to the Regional
Office of the National Labor Relations Board, that Office of
the Board will jump right on it and do the best they can for
the employee.
Senator Obama. How long do you think it would typically
take?
Mr. Hurtgen. Ninety-some percent of the cases get settled
at that level in weeks. Now some don't. Some last 6 months,
some last longer and you are correct. In those few cases, an
employee can wait too long to be reimbursed. I understand that.
I accept that.
Senator Obama. Mr. Chairman, thanks.
The Chairman. As was pointed out, Senator, we have 31,000
cases settled this year so it's not a small amount.
Senator Allard.
Statement of Senator Allard
Senator Allard. Mr. Chairman, thank you and I want to join
you in welcoming our Colorado--Greeley residents, Errol
Hohrein, here to the panel. It's good to see you and I know
it's not always easy to come all the way to Washington to get
your point of view across and I'm glad you made that effort to
be here.
In Colorado, we had a rather contentious bill go before the
Democratic Governor recently and he vetoed a State effort to
pass a very similar piece of legislation that we have before us
in this committee right now. In my view, the governor, Governor
Ritter's efforts protected 92 percent of Colorado workers who
aren't members of unions and now, union leaders are--well, let
me go--before I go, let me make this point. I support what
everybody said about the value of a secret ballot. I think it
protects the employee or the worker from coercion from both
sides, from coercion from the employer or even coercion from
maybe his fellow workers who may feel very strongly about
unionizing--he may not share those views.
So, now what's happened with the veto by the Governor of
this particular piece of legislation in Colorado, union leaders
are threatening to move the Democratic Convention from Denver
if they don't get their way and the question that comes up,
well, couldn't such actions be cited as one act of union
coercion on State lawmakers? And another question, I think,
that comes up, if such unions make such able threats to State
governments, what keeps them from making coercive action upon
workers who choose not to join the labor organization? Anybody
want to answer that? Maybe Dr. Mishel, maybe you'd like to
respond to that.
Mr. Mishel. Can you say that again? What was the coercion
that the unions were doing?
Senator Allard. Union labor leaders are threatening to move
the Democratic Convention from Denver if they don't get their
way. That is, they're upset because Governor Ritter vetoed a
very similar piece of legislation that is before this
committee.
Mr. Mishel. So you think it is inappropriate for anyone to
apply their economic power in pursuit of----
Senator Allard. Is that coercive? Is that coercive action?
Mr. Mishel. I don't know. Is an employer lock out coercive?
Is an employee strike coercive?
Senator Allard. Yes, but it's affecting public policies, a
public policy that has been for the people of Colorado, have
voted in this Governor Ritter and he--this was a promise that
he made during the campaign and now people are upset because
the majority of people in Colorado maybe have a different view
than 92 percent of the workers who don't belong to a union.
Mr. Mishel. Well, it's my understanding that the Governor
promised to sign that piece of legislation before he was
elected when he sought the support of the unions involved. I
would just say that there is a law in our land that says you
help your friends and punish your enemies and I think most
people pursue that and I don't see the problem. I also don't
understand why everybody seems to think that if you have a
secret ballot election at the end of a process, no matter what
else the process, it must therefore, act as a sufficient factor
to be called free and fair. Our State Department calls all
sorts of elections around the world not free and fair.
Senator Allard. Mr. Chairman, can I reclaim my time,
please? And I'm sorry we have to do that but I do have limited
time and I need to get moving. But I do happen to feel that a
fundamental right is to have a secret ballot and I would hope
that we would not take that away, no matter what the
circumstances, whether it is a local community election or a
homeowners association or whether it's unionization or whatever
because I think the rights of the individual are more protected
in that environment than any other environment and I recognize
the fact that there might be extenuating circumstances beyond
that, that could affect that vote and I'm not sure how we
control those. But I do get concerned when that type of action
is taken, when lawmakers in the State of Colorado had decided
to pursue a different route.
The other question I wanted to ask, Mr. Chairman, is that
if we look back historically on the last few years, our economy
has done well. In fact, wages have gone up and some sources
even said that wages have gone up a little bit more than
actually the cost of living has been. Now if wages are such a
good deal--I mean, if being in a union is such a good deal, why
is union membership declining?
Ms. Estlund. One thing to realize is that the natural
process of creative destruction in the economy means that
unions have to organize hundreds of thousands of workers every
year just to maintain parity. When we look at what happens
when----
Senator Allard. You mean, the growth--the workforce is
growing so rapidly?
Ms. Estlund. Well, it's a combination of firms--unionized
firms going out of business and of course, every new firm that
starts up starts out nonunion. A firm never turns union until a
majority of people have made their voice clear through a
process that the law recognizes. So that means that unions are
constantly falling behind unless they are organizing. So that's
part of the problem but when we see what has happened to people
who do try to organize a union and the employer making it as
clear as possible that they will still be there to make sure
that the union can't get them anything, that terrible things
will happen, that's certainly part of the explanation for why
unions have not been able to keep up. It's not the entire
explanation.
Senator Allard. Mr. Chairman, thank you. I see my time has
expired.
The Chairman. Thank you.
Senator Sanders.
Statement of Senator Sanders
Senator Sanders. Thank you. This is an important hearing
and it's a discussion that we should be having far more often
because the reality of American society today is that despite
an increase in worker productivity, huge increases in
technology, the middle class is shrinking.
There are millions of workers today who are working longer
hours for lower wages than was the case 20 years ago. Poverty
is increasing. In the last 5 years, five million more Americans
slipped into poverty and what we don't talk about as often as
we could--Professor Mishel raised that issue, is the growing
gap between the rich and the poor and the fact that the United
States has, by far, the most unequal distribution of wealth and
income of any major country on earth.
Now, why is that? Well, a lot of reasons why but one reason
is that we have people here in Washington who have fought
vigorously against raising the minimum wage and are still
fighting against that today, despite an obscene minimum wage of
$5.15 an hour. Another reason is our disastrous trade policies,
which have allowed corporate America to throw American workers
out on the street, go to China and hire people there at 30
cents an hour and intimidate workers, that if they stand up for
their rights in any way, that plant is going to shut down, move
to China, move to Mexico and the last aspect I think is
precisely what we're talking about today. That is, the attack
on workers rights and the attack on the ability of workers to
form unions. You know, this is a beautiful hall right here in
Washington, DC. This is not reality. This is not the back room
of a factory with some guy who is working 40 or 50 hours a
week, is brought into a room and to say, listen, if you stand
up for that union, you're going to lose your job. Oh, I know
that it's illegal but that illegal activity is taking place
every day all over this country and has for many, many years.
And if some worker--after years of effort--goes to the National
Labor Relations Board and makes his claim, having not had a
paycheck, what happens to that worker? There is a slap on the
wrist and the employer understands that and will continue that
process.
I'm very glad this legislation is before us now. In 1992,
soon after I became a Member of the Congress and the House of
Representatives, I introduced that legislation. I would like to
ask Professor Estlund, is this concept a new concept or do
other countries, allies of ours, other industrialized countries
like Great Britain, Canada, have similar approaches?
Ms. Estlund. Yes, there is quite a lot of experience with
majority sign up in Canada and the best I can ascertain talking
to people who are very knowledgeable about the process is
nobody seems to be aware of any problem or any significant
problem of union coercion in sign up and it's not surprising
because the union just doesn't have the leverage over employees
that the employer does and in this--this bill has an extra
layer of protection that the Board has to pass on the validity
of the cards. So a majority signup is first of all, already
valid for things like getting rid of an incumbent union. It's
already good enough if the employer chooses to recognize----
Senator Sanders. But this approach has also been used in
other countries, am I correct?
Ms. Estlund. Yes, it has.
Senator Sanders. All right, let me ask you this, Professor
or anyone else can jump in. Union workers form a union. They
negotiate. They sit down and try to negotiate a first contract.
How often is the case where an employer says, in so many words,
well, we're going to talk and we're going to talk and we're
going to talk and we're going to talk. And you know what? You
are never going to get that first contract. Is that uncommon?
Ms. Estlund. I'm really glad you asked that because the
problem that the first contract arbitration responds to is
really a terrible one. The idea of first contract arbitration
is really to get the parties to take seriously the obligation
to bargain because as things stand now, employers can do
exactly what you suggest. They can stall. All they need to do
is get to impasse. The region impasse--they can implement their
proposal. All the workers can do is threaten to strike and that
may be exactly what the employer wants because at that point,
the workers can be permanently replaced.
Senator Sanders. And this is not uncommon. I know of one
instance in the State of Vermont where this process has gone on
and the workers became demoralized.
Ms. Estlund. Absolutely. And in fact, the anti-union
consultants include, in the event that you lose an election,
will make sure that you don't ever get stuck with a contract.
We'll walk you through the process of avoiding a contract.
Senator Sanders. So you can go through dragging out the
contract and then working on a re-certification.
Ms. Estlund. And at the end of the day, a refusal to
bargain in good faith results in an order to go bargain some
more.
Senator Sanders. Right. Mr. Chairman, let me just conclude
by saying that this is an excellent panel and I thank all the
panelists for being here. Workers in our country are being
beaten over the head. A gap between the rich and the poor is
getting wider. Employers are getting away with murder and
frankly, the time is long overdue for this Congress to start to
stand up for the working people of this country and if our
friends on the other side want to filibuster this bill, let
them. But I think the time is now to pass action that to make
it easier for workers to form unions so they can earn a living
wage. Thank you, Mr. Chairman.
The Chairman. Thank you very much.
Senator Hatch.
Statement of Senator Hatch
Senator Hatch. Well, thank you, Mr. Chairman. I have
appreciated all four of you and your testimony here today.
Professor Estlund, I noticed you had not a lot to say about
compulsory binding interest arbitration of first contracts.
Have you negotiated, and if so, how many first contracts have
you negotiated?
Ms. Estlund. I haven't negotiated any, Senator.
Senator Hatch. Not any. Well, you're aware that many union
negotiators have resisted even voluntary interest arbitration
to address protracted bargaining disputes, such as the recent
West Coast port strike, where the parties were at an impasse at
the bargaining table. Now, we're informed that many local
unions do not support the compulsory binding first contract
interest arbitration provision in H.R. 800. Are you aware of
that as well?
Ms. Estlund. That is often the case that unions will resist
first contract arbitration.
Senator Hatch. Sure. Let me turn to you, Mr. Hurtgen.
Mr. Hurtgen. Yes, Senator?
Senator Hatch. I only have limited time but it seems to me
you are uniquely qualified as having been a member of the
Board, certainly to address the subject of compulsory binding
interest arbitration of first union contracts. Now, I gather
from your testimony that you are strongly opposed to that
provision, that as it is listed in H.R. 800.
Mr. Hurtgen. That is correct, sir.
Senator Hatch. You practiced labor law in Florida for over
30 years, between 1966 and 1997 and I think if I recall it
correctly, you negotiated somewhere like 175 collective
bargaining agreements, both in the private and public sectors
during that time.
Mr. Hurtgen. That is correct, Your Honor--Senator, excuse
me. It's been a while since I've done this. I would say----
Senator Hatch. It's been a while since I've done this, too.
[Laughter.]
Mr. Hurtgen. I negotiated probably 20 to 30 collective
bargaining agreements in the public sector in Florida and the
vast majority of them were not negotiations like we conceive of
it because the process ended in a hearing before an arbitrator
called a Special Master, whose decision was final and binding
on the parties except it had to go to the legislative body of
the employer, the school board, the county commission, the city
commission, the council, whatever.
Senator Hatch. Sure. But the public sector bargaining
process in Florida ends in a nonbinding interest arbitration.
So I'm going to ask you just a few questions about that
experience and whether or not it should be required. In other
words, ``binding`` on all private sector employers unions and
employees for first contracts. Now we all know what is provided
in H.R. 800 concerning compulsory binding first contract
interest arbitration. But I just want you to confirm a few of
the effects of that provision.
Now it is my understanding that because the first contract
imposed by the Federal Government through compulsory
arbitration is binding on the parties under this bill. The
employees who are subject to the government's imposed wages,
benefits and other terms and conditions of employment will have
no right to a ratification vote to approve or reject a
contract, is that correct?
Mr. Hurtgen. I think that is correct, Senator.
Senator Hatch. As they would under law.
Mr. Hurtgen. Well, they would have that under the current
law. In fact, that is the requirement that they choose to
ratify or not.
Senator Hatch. That is if the contract was negotiated
without governmental interference.
Mr. Hurtgen. That is correct.
Senator Hatch. In other words, it doesn't matter, according
to the words of this bill, what the employees think or want,
once the Federal Government has spoken, the contract is binding
for 2 years, like it or not, is that correct?
Mr. Hurtgen. That is correct.
Senator Hatch. Let me ask you this. Because the government
imposed contract is binding on the parties, the employees will
not be allowed to strike to enforce their contract demands if
the parties reach impasse, is that correct?
Mr. Hurtgen. Well, I think that's unclear, Senator.
Clearly, I think it would be the case after the contract, so to
speak, is imposed is that they would not be able to strike
because the imposed contract is binding upon them as it is the
employer.
Senator Hatch. But if they have a right under current law
to----
Mr. Hurtgen. They do have the right under current law to
strike until they get the terms they want.
Senator Hatch. But they would not be permitted to strike
during the duration of the contract.
Mr. Hurtgen. That is correct.
Senator Hatch. That's my point. Now, since the government-
imposed contract would be binding for 2 years under the
``contract bar'' doctrine, neither the employer nor the
employees would be permitted to challenge the union's
continuing majority status through an NLRB supervised secret
ballot de-certification or de-authorization election for the
term of the contract.
Mr. Hurtgen. That is correct.
Senator Hatch. Now, as I view it, that's an additional 2-
year denial of the right of workers to a secret ballot election
to express their views on the union, is that correct?
Mr. Hurtgen. That is correct.
Senator Hatch. And I want to ask just a few--do I have some
time here? I'm running out. I want to ask a few questions about
the effect of compulsory binding interest arbitration on the
national labor policy of free collective bargaining.
First I want to establish the difference between interest
arbitration and grievance arbitration. Is it correct that in
grievance arbitration--Mr. Chairman, could I have just a little
bit more time? I know you're tired and weary and worn out from
all these questions.
Mr. Hurtgen. And he's not even having to answer them.
The Chairman. There is no reason you shouldn't have 10 more
seconds.
[Laughter.]
Senator Hatch. You've always been very generous to me.
The Chairman. All right. A couple more minutes.
Senator Hatch. Thank you, sir. I appreciate it. In
grievance arbitration, the answers to the dispute are to be
found within the ``four corners'' of the pre-existing contract.
The arbitrator's job is interpreting and implying what the
parties have agreed to.
Now, interest arbitration, on the other hand, is an
arbitrator's judgment imposed on the parties in the absence of
a contract as to what in his opinion the parties should have
agreed to or would have agreed to, absent arbitration. So such
determinations imposed on the parties will be affected by the
arbitrator's own economic or social theories often without the
benefit or understanding of practical, competitive economic
forces. You would agree with all of that, wouldn't you?
Mr. Hurtgen. Yes, I would.
Senator Hatch. It is for that reason that most employers
shudder at the thought of an outside government arbitrator with
the power of the company's economic life and death in the
balance. Do you understand that?
Mr. Hurtgen. I would accept that. I'd add that I think if
not most, many unions would agree with that statement.
Senator Hatch. Now, do you agree with Elkouri and ``How
Arbitration Works,'' do you acknowledge that that is a premiere
basic text on arbitration.
Mr. Hurtgen. Right.
Senator Hatch. And according to that text--I ask whether
you agree or disagree with the following statements about
compulsory binding interest arbitration--``Broadly stated that
one, it is incompatible with free collective bargaining. Two,
it will not produce satisfactory solutions to disputes. Three,
it may involve great enforcement problems and four, it will
have damaging effects on the economic structure.'' Do you agree
with that, sir?
Mr. Hurtgen. I agree with that.
Senator Hatch. Professor Estlund, do you agree that Elkouri
and Elkouri is the premiere basic text in arbitration?
Ms. Estlund. I do want to correct a misstatement that I
made. I don't know of any union that has ever resisted first
contract arbitration, interest arbitration. In a mature
collective bargaining agreement, it's not the ideal answer.
Senator Hatch. It is the difference between having the
right to do that and having it imposed on you, isn't it?
Ms. Estlund. It is and if there were not a problem with
employers avoiding serious collective bargaining, then I don't
think this proposal would be on the table. This is responding
to a problem of employers continuing their anti-union campaign
past the certification period.
Senator Hatch. Well, I would like to ask both of you a
number of questions about what Elkouri versus Elkouri, the
premiere basic text on arbitration has to say because it
certainly rips this part of the bill apart and I'm very
concerned about it as well and there is a number of parts of
this bill that I'm very concerned with. I do believe in
collective bargaining and I do believe that unions should have
a right to compete. I do believe that under current law, they
have a lot of rights. Now, if there are abuses in this process,
of course, I think most times, the law is there to take care of
them but I understand some of the concerns that you have,
Professor Estlund but I also understand what you've said, Mr.
Hurtgen. Is there any further comment on what I have said?
Mr. Hurtgen. Trying the Chair's patience, no.
Senator Hatch. OK. I don't want to try his patience anymore
either. I've been there before.
[Laughter.]
The Chairman. Your time is up.
[Laughter.]
Thank you. I just have a final one for Professor Estlund.
In your testimony, you point out that prior to the 1970s,
employers were required to bargain with a union that presented
the evidence of majority support. Other countries, such as
Canada, still have this system in place even today, signing
authorization cards are a lawful and common way to form a union
and employers will recognize the union on this basis. So based
on these experiences of majority signup, has any compelling
evidence emerged that coercion by their fellow workers will
interfere with employees' free choice? And if you have a direct
knowledge about how the Canada system is working.
Ms. Estlund. Well, I don't want to get too much into the
details but I do understand that they have not had really any
significant problem and people who have looked at the record in
this country with the use of majority signup, have not found a
significant record of a problem. The studies that have been
done suggest that very few people report being pressured by a
union and why should we be surprised? What does the union have
to hold over them? It just doesn't have--if the worker comes up
before the Board later and says, I was pressured, that puts the
union's whole victory--so unions are very strongly deterred
against that sort of coercion and they really have no leverage
over the employees as compared to the employer so that's just
not where the problem is.
The Chairman. Thank you very much.
Senator Isakson.
Senator Isakson. Thank you, Senator Kennedy. I just wanted
to make a couple of observations. This has been a great hearing
and I appreciate all of the witnesses. A couple of things that
have come out in my mind, just for us to reflect on.
First, Mr. Hohrein--Hohrein (How-rein), is that correct?
Mr. Hohrein. Hohrein (Hoe-rein) by pronunciation.
Senator Isakson. Hohrien?
Mr. Hohrein. Hohrein.
Senator Isakson. Hohrein, I'm sorry. I always hate it--I've
got Isakson and people always blow that one so I hate to do it
to somebody else. Your testimony demonstrates that the current
law works pretty well because you had what was apparently an
adversarial situation and the vote ended up going in favor of
the union, is that correct?
Mr. Hohrein. We won the union vote but that is not the
case. If we had 75 percent of the people that were signed up as
far as the petition drive and by the time we got to the vote,
it was 11-12. An awful lot of coercion went on in between and
it wasn't on the union side.
Senator Isakson. But the point I was making was with regard
to the current law we have. You had an adversarial relationship
between the company and the employees and the employees won in
terms of unionization.
Second, Dr. Mishel, I appreciate the comment about
rewarding friends and punishing enemies. I don't believe it is
a principle. I believe it is a practice. I ran a company for 22
years and employees are not necessarily enemies and employers
are not necessarily enemies, which is my other point that I
want to make because there is a lot of good, on both sides.
Last, one observation, having run a business, one of the
key things when you look at the Senator's many charts, about
productivity and wages, I do want to point out, the
corresponding increase--and I went through this in my company--
Bill Gates did more to increase the productivity of the
American workplace and technology than any single thing. It
displaced some workers and it dramatically increased others, so
granted, I'm not arguing that your chart may not be indicative
but I am saying, there are external factors that came out of a
great free enterprise system, like the generation of Microsoft
software and the computer and technology that naturally are
going to increase productivity disproportionately to what
increases might take place in wages. I just wanted to get that
comment in there.
Mr. Mishel. Senator, may I just point out that I was
quoting Samuel Gompers. I know you've studied him well. He was
the founder of the American Labor Movement in the 1800s and it
was his phrase that the way you practice politics is to reward
friends and punish enemies.
Senator Isakson. And I appreciate that point because that
kind of ratifies what I was saying. When unions started
growing, they grew out of what was a very adversarial
relationship between employers and employees and because of
what has happened over the years, that's not necessarily the
rule in employment. It can't happen where you have adversarial
relationships but it's no longer the rule like it was then.
Mr. Mishel. Well, he was discussing the practice of
politics, which I guess you're more familiar with than I so
I'll leave it at that.
Senator Isakson. It's always adversarial. Thank you, Mr.
Chairman.
The Chairman. Thank you. I thank our panel very, very
helpful and very informative.
Senator Isakson. Can I ask one more question?
The Chairman.Unfortunately, I have to leave.
Senator Isakson. Yes, I know you have to leave.
The Chairman. The committee will stand adjourned.
[Additional material follows.]
ADDITIONAL MATERIAL
Prepared Statement of Senator Enzi
I want to thank Chairman Kennedy for holding this hearing
and offering us the opportunity to get all the facts out on the
table. This is an important issue and, unlike the process my
colleagues faced in the House of Representatives who were
entirely shut out of the process, I am encouraged that the
Chairman is willing to open up the card check bill to greater
scrutiny here in the Senate. I believe this hearing is an
important first step in that direction.
Legislative initiatives are invariably driven by real world
facts and real world experience. Therefore, we should begin any
review of the cleverly named ``Employee Free Choice Act'' by
first examining some basic facts. This legislation would, in
part, radically change the way that millions of employees over
nearly seven decades have decided whether or not they want a
union to become their exclusive representative in the
workplace. In the vast majority of instances this critical
decision has been made through use of the most fundamental
institution of our democracy--the private ballot. In a
democratic society nothing is more sacred than the right to
vote, and nothing insures truly free choice more than the use
of a private ballot.
Beyond assaulting free choice and the right to vote, this
bill would gravely damage the freedom of contract that has been
a hallmark of our private sector labor/management relations.
Our system recognizes the reality that in labor/management
relations, as in other contractual situations, the parties that
must live by the contract are the parties that must make the
contract. Can you imagine either buying or selling a house and
being told that someone from the government would decide the
terms of the sale; and, even if you didn't agree, you'd be
forced to go through with the deal? Whether it is buying a
house, or negotiating a labor contract, this notion is simply
untenable.
Lastly, the bill would substitute a tort-like remedy system
for the make-whole remedy system that has served well since the
inception of the NLRA. The vast majority of labor/management
disputes are voluntarily resolved. A tort-type system, while it
will certainly keep trial lawyers busy, will clog the system
with litigation and simply delay the resolution of claims. The
bill also seriously infringes on due process and the right to
manage a private business through its mandatory injunction
provision. If an individual claimed that he was terminated
because of his union sentiments, the government would require
that he be returned to work before the merits of his claim were
resolved. We rightly outlaw employment discrimination on the
basis of age, race, religion, sex, and national origin, but do
not require individuals claiming to have been discharged on
these bases be returned to work before the merits of their
claims are determined and we should not do so here.
So then, what are the facts that would cause some to so
quickly cast aside such fundamental guarantees as the right to
vote, the right of free speech, the right to adequate legal
process and the right to form private contracts? There is only
one fact--labor unions represent a steadily declining
percentage of the private sector workforce. Today, union
membership among private sector employees stands at its lowest
level in decades. The Labor Movement needs members because
members' dues, whether taken from the employee's paycheck
voluntarily or taken, in some cases, involuntarily in non-
right-to-work States, are the only source of union income. Make
no mistake about it. That is the only fact that is driving this
proposed legislation.
You don't have to take my word for it. The labor unions'
own research association said it plainly in an article titled
``Union Members Hit Harder by Job Loss Numbers.'' As they
wrote, ``The push for card check recognition is absolutely
critical to reverse the decline in union membership.'' (Labor
Research Association, July 27, 2005)
There is not a Member in this body, on either side of the
aisle, who would ever sanction depriving individuals of the
right to vote when electing their governmental representatives.
Why would we ever even consider depriving individuals of the
right to vote over the issue of their workplace
representatives? Why would we ever say to the working men and
women of this country that democracy ends at the factory gate
and individual rights have no place on the shop floor? Why
would we have the Federal Government dictate the terms of
private labor agreements? And why would we allow the Federal
Government to interfere and reverse personnel decisions before
discrimination is proven? What are the facts that could
possibly support these radical notions?
First, we are told that taking away private ballots is
necessary because the election process overseen by the National
Labor Relations Board is increasingly tilted against unions.
However, that claim simply does not withstand examination. The
fact is that for the last decade unions have been winning a
steadily increasing number of the NLRB certification elections.
In fact, in fiscal year 2005 unions won over 61 percent of the
time--a rate as high as it has ever been. When you are shooting
better than 61 percent from the three point line, it's a little
difficult to claim that the game is unfair, or that you need to
have the line moved closer to the basket.
Then we are told, well wait a minute, that's not quite it.
The real problem is that employers are making elections unfair.
This claim doesn't stand up either.
The National Labor Relations Act guarantees the right of
free speech to all parties involved in union elections. Free
speech, open debate, and the free exchange of ideas and
opinions are, like the private ballot election, hallmarks of a
fair and democratic society. The law, however, also prohibits
conduct in the context of union organizing that is coercive or
threatening. The NLRB scrupulously polices the conduct of both
unions and employers during an organizing election and can
invalidate any election if either party engages in misconduct
affecting the results. The rate of elections invalidated
because of misconduct by either side is extraordinarily low and
has, in fact, been declining. In 2005, over 2,300 certification
elections were conducted by the NLRB, yet the NLRB conducted
re-run elections because of misconduct by either the employer
or the union in only 19 cases.
Finally, we're told, you still don't get it. It's because
employers are increasingly committing unfair labor practices.
Well, guess what, that's not true either. The number of
allegations--and I stress the word allegations since the
majority of claims are withdrawn or dismissed for want of any
evidence--of employer unfair labor practices has been steadily
declining for the last decade. In fact, last year, it was at
the lowest level in many, many decades.
Surely, however, the current low membership levels must be
due to an unfair law, or to unfair NLRB election procedures.
Sorry, those arguments hold no water either. The National Labor
Relations Act has not changed in nearly 50 years. The law and
procedures governing union organizing are the same today as
they were in all the years when unions enjoyed their highest
level of membership among private sector workers. Such argument
further ignores the fact that union's election win rates are
dramatically higher today than they were 10, 20, or 30 years
ago, and allegations of employer misconduct are dramatically
lower than in those same times.
According to opinion poll after opinion poll, the low
levels of union membership are the result of the public's
perception of unions, not some problem with the law surrounding
organizing that hasn't changed in decades. Those polls indicate
that workers find unions increasingly irrelevant, too costly,
too detached and too political. The unions have not kept pace
with the modern workforce. Whether true or not, that is the
public's view, and that is the problem for unions--not some
manufactured problem with the underlying law.
One final thought is important to bear in mind as we
consider this issue. It has never been the role of the
government, or the purpose of Federal labor policy to increase
or maintain the level of union membership among private sector
employees. Federal labor policy on this issue has always been
neutral. That is why the act specifically provides in its
``bill of rights'' section that employees have both the right
to form and join labor organizations and the right not to do
so.
Our Federal labor policy has been consistently based on
``rights'' not bolstering union membership levels. This new
proposed policy of government intervention to increase
unionization will be constructed on a pile of discarded
rights--the right to vote, the right to privacy, the right of
free speech, and the right to contract.
I believe the Senate will stand with me to protect these
most fundamental rights and to continue fostering a national
labor policy that is balanced and neutral.
I look forward to hearing the testimony and engaging in a
healthy exchange of ideas and differences.
Prepared Statement of Senator Murray
Mr. Chairman, thank you for holding this hearing, and I
want to thank our witnesses.
Over the past few years, our country has had really
impressive economic growth, and I want to make sure that every
American shares in that prosperity. One way to do that is to
ensure workers have the option to organize.
Unfortunately, today, in too many workplaces, workers who
try to exercise their legal rights are blocked by an unbalanced
system that can trap them in unacceptable working conditions.
The Employee Free Choice Act will make the promise of
employee choice a reality and will restore balance to the
relationship between employers and employees.
First, the bill ensures that employees who want to organize
can do so without interference.
Second, this bill ensures there's time for reasonable
negotiations, but it does not allow one side to act in bad
faith and string employees along in a never-ending process
that's designed to block their ability to self-organize.
Third, this bill will hold bad actors accountable if they
break the law. According to ``American Rights at Work,'' every
23 minutes in America, an employer fires or retaliates against
a worker for their union activity.
We shouldn't tolerate illegal discrimination and
retaliation against workers who are just trying to exercise
their rights. If a corporation violates the rights of its
employees and is charged by National Labor Relations Board,
this bill will impose stricter penalties. This will ensure that
breaking the law doesn't just become part of ``the cost of
doing business.''
I'm pleased that this bill gives employees the opportunity
to vote by secret ballot if they so choose. For too long, some
corporations have had control over the balloting process, and
this bill gets the balance right by making sure employees have
the free choice to use a secret ballot.
One thing this bill does not change is the access to
employees that exists today. Currently, employers have full
access to employees during the workday. Unions do not. This
bill leaves that relationship unchanged.
We all know that a fair labor market can only exist when
corporations and employees have a voice in the system.
Unionized workers earn 30 percent higher wages, are twice as
likely to have employer health coverage, and are more likely to
have paid sick days and a pension. Clearly, unions empower
workers to access better benefits and provide a better life for
their families.
In my home State of Washington, we've seen proof that
companies can remain competitive and profitable and still
follow the law and respect worker rights. Cingular Wireless is
a national wireless phone company that gave its workers in
Bothell, Washington the free choice they're entitled to. As a
result, nearly 1,000 workers in my hometown decided to
organize, and Cingular won praise for its responsible,
respectful approach to employee choice.
It's time to empower our workers and give them their voice
back. I sincerely hope we can work together to restore free
choice to employees by moving this bill forward quickly in our
committee.
Letter of Support
Lyndon B. Johnson School of Public Affairs,
The University of Texas at Austin,
Austin, Texas 78713-8925,
March 21, 2007.
Hon. Ted Kennedy,
Chairman,
Committee on Health, Education, Labor, and Pensions,
U.S. Senate,
Washington, DC. 20510.
Dear Senator Kennedy: I regret very much that a scheduling conflict
precludes the opportunity to accept your invitation to testify on the
Employee Free Choice Act (EFCA), which I strongly support.
There is abundant evidence that free and democratic societies and
broadly shared prosperity require strong and democratic organizations
to represent employees at work and in the larger society. This is one
reason all democratic countries, including the United States, have
declared the right of workers to organize and bargain collectively to
be fundamental human rights.
Unfortunately, despite our support of this declaration, U.S. labor
law actually makes it very difficult for American workers to bargain
collectively, even though polls show that nearly 60 million of them
wish to do so. Indeed, unlike most other advanced democracies, the
United States requires workers to engage in unfair high-stakes contests
with their employers to gain bargaining rights. Numerous studies,
including those by the Commission on the Future of Worker-Management
Relations (the Dunlop Commission) have documented the failure of
American labor law to adequately protect workers' bargaining rights.
The National Labor Relations Act's (NLRA) major weaknesses include:
giving employers too much power to frustrate workers'
organizing efforts, often through unlawful means;
weak penalties for illegal actions by company
representatives; and
employers' refusal to bargain in good faith after workers
vote to be represented by unions.
By strengthening the right of workers to select bargaining
representatives without going through lengthy and unfair election
processes, facilitating first contracts, and creating stronger and more
equitable penalties, the EFCA would cause the NLRA to be much more
balanced.
The EFCA is important to all Americans, not just to workers. We are
not likely to have either sound public policies or fair and effective
work practices if millions of American workers' voices remain unheard.
It is significant that stagnant and declining real wages for most
workers, along with growing and unsustainable income inequalities, have
coincided with declining union strength.
Good luck with this important legislation. Please let me know if I
can help in
any way.
Sincerely,
Ray Marshall.
______
Letters of Opposition
Associated Builders and Contractors, Inc. (ABC),
March 26, 2007.
Hon. Edward M. Kennedy,
Chairman,
U.S. Senate,
Committee on Health, Education, Labor, and Pensions,
Washington, DC.
Hon. Michael B. Enzi,
Ranking Member,
U.S. Senate,
Committee on Health, Education, Labor, and Pensions,
Washington, DC.
Dear Chairman Kennedy and Ranking Member Enzi: On behalf of
Associated Builders and Contractors (ABC), and its more than 24,000
contractors, subcontractors, suppliers and construction-related firms
across the country, I am writing to express our strong opposition to
the ``Employee Free Choice Act,'' scheduled for debate by the committee
tomorrow.
Passage of the ``Employee Free Choice Act'' would rob American
workers of their right to a private ballot election overseen by the
National Labor Relations Board (NLRB) when deciding whether or not to
join a union. It would replace the private ballot election with a
scheme called ``card check.'' Under ``card check,'' workers are forced
to vote in public--inviting intimidation and coercion into the
workplace.
NLRB case law is full of examples where the use of card checks have
been challenged because of incidents that involved misrepresentation,
forgery, fraud, peer pressure, and promised benefits. Tactics have
included threats of termination, deportation, and loss of 401(k) and
health benefits for not signing a card. For signing a card, employees
have been promised green cards, termination of supervisors, turkeys,
and waiving of union dues. The expansion of this practice via this
legislation would only lead to more egregious threats upon workers.
Federal courts have repeatedly ruled that secret ballot elections
are the preferred method of ascertaining union support from employees.
In a brief to the Ninth Circuit Court of Appeals, the NLRB stated,
``Congress and the Supreme Court regard a secret ballot
election conducted under the Board's auspices as the preferred
method for resolving representational disputes in the manner
that best ensures employees free and informed choice.''
Simply put, the private ballot is absolutely essential to
protecting the integrity of the union election process.
The bill also contains an infringement on a private employer's
right to contract. It provides that if an employer and a union engaged
in their first collective bargaining agreement are unable to reach
agreement within 90 days, then either party may refer the dispute to
the Federal Mediation and Conciliation Service (FMCS). If the FMCS is
unable to bring the parties to agreement after 30 days of mediation,
then the dispute would be referred to arbitration. The results of the
arbitration would be binding on the employer, the union, and ultimately
the employees for 2 years.
Besides departing from seven decades of precedent and law under the
National Labor Relations Act, this provision would completely undermine
the collective bargaining process by creating an incentive for bad
faith bargaining. Unions could deliberately stall collective bargaining
with impossible demands, expecting the Federal Government to grant some
or all of their demands through binding arbitration.
This provision also represents a serious threat to small
businesses, by allowing the Federal Government to set a private
company's wages and benefits during binding arbitration.
The ``Employee Free Choice Act'' in fact does nothing to enhance
freedom in the workplace. Instead, it tramples on both the privacy of
individual workers and the freedom of employers to bargain
collectively. We strongly urge you to oppose this dangerous bill.
Respectfully submitted,
William B. Spencer,
Vice President, Government Affairs.
______
Americans for Tax Reform (ATR),
Washington, DC.,
March 26, 2007.
Hon. Edward Kennedy,
U.S. Senate,
Washington, DC. 20510.
Hon. Michael Enzi,
U.S. Senate,
Washington, DC. 20510.
Dear Chairman Kennedy and Ranking Member Enzi: On behalf of
Americans for Tax Reform, I write to express my strong condemnation of
H.R. 800, the so-called ``Employee Free Choice Act.'' The Senate HELP
Committee will be considering the merits of this bill tomorrow. This
anti-worker bill should be dismissed as the thinly veiled sop to Big
Labor that it really is.
For generations, American workers have had the right to a federally
supervised, private ballot election when deciding on union membership.
This bill would strip workers of this democratic right. The bill would
also impose wage and benefit terms on newly-unionized small businesses,
giving a decisive advantage to unions over entrepreneurs.
Taxpayers are the big losers if this bill were to become law.
Within the next 3 years, experts predict that a majority of labor union
members will be government employees. At that point, the majority
interest of Big Labor will undoubtedly be higher taxes, more spending,
and a bigger workforce to run it all (and pay union dues). By tipping
the scales in favor of Big Labor, this bill lays the groundwork for a
massive expansion of government and a crushing tax burden.
Sincerely,
Grover Norquist.
______
Chamber of Commerce of the United States of
America,
Washington, DC.,
March 27, 2007.
Hon. Ted Kennedy,
Chairman,
Committee on Health, Education, Labor, & Pensions,
U.S. Senate,
Washington, DC 20510.
Hon. Michael Enzi,
Ranking Member,
Committee on Health, Education, Labor, & Pensions,
U.S. Senate,
Washington, DC 20510.
Dear Chairman Kennedy and Ranking Member Enzi: The Employee Free
Choice Act (EFCA), which will be considered during today's hearing, is
perhaps the most imbalanced and ill-advised labor legislation in over
30 years. This bill would destroy 60 years of precedent and balance
that currently characterize the process by which employees decide
whether to be represented by a union in their workplace. The U.S.
Chamber of Commerce, the world's largest business federation
representing more than 3 million members and organizations of every
size, sector, and region, does not oppose unions or their
representation of employees. However, the Chamber is committed to
ensuring that the process for deciding whether they are recognized
produces a legitimate expression of employee interest.
Enactment of this legislation would deny employees their ability to
vote on two of the most important issues they face with regard to their
work lives: whether to have a union be their exclusive representative
to their employer, and the terms of their employment as embodied in the
contract that would be bargained collectively on their behalf.
Accordingly, the Chamber unequivocally opposes EFCA, as passed by the
House, and the version of it that is likely to be introduced in the
Senate.
Unions' desire for this bill is driven by the continued decline in
their membership, currently at 7.4 percent of the private sector. The
primary cause of this trend is not that unions are being denied the
opportunity to make their case to employees, or that the current system
is unfair, or rigged, but that the message unions have been trying to
sell to employees is no longer relevant or compelling. But the answer
to organized labor's recent failure to recruit more members lies in
developing an agenda and message that is relevant and attractive to the
modern workforce, not in subverting proven election procedures that
protect an employee's right to vote for a union, in secret and free
from coercion.
However, in response to union claims that the current procedure is
somehow flawed or rigged, it is worth emphasizing that unions still win
more elections than they lose. The National Labor Relations Board
(``NLRB'' or ``Board'') most recent election report summary shows that
unions won 59.6 percent of all elections involving new organizing.\1\
---------------------------------------------------------------------------
\1\ See NLRB Election Report; 6-Months Summary--April 2006 through
September 2006 and Cases Closed September 2006, at p. 18.
---------------------------------------------------------------------------
The signature provision of this bill would supplant the use of a
private ballot, overseen by the NLRB, that is the current preferred
method for determining whether a union will be recognized in a
workplace, with an unsupervised process where a union would be
recognized if union organizers can get more than 50 percent of the
employees in a bargaining unit to sign authorization cards. While this
provision is offensive, it is by no means the only objectionable
provision of this bill. Equally egregious is the provision that
mandates interest arbitration for a first contract if the parties have
not come to an agreement after only 120 days. Finally, the section
increasing penalties on employers, but not unions, is similarly without
merit. The Chamber's objections to each of these provisions are laid
out in more detail below.
SECTION 2--DENYING EMPLOYEE CHOICE THROUGH CARD CHECK PROCESS
Under current law, when 30 percent of the employees in a bargaining
unit indicate their interest in having a union represent them, the
Board administers the election by bringing portable voting booths,
ballots and a ballot box to the workplace. The election process occurs
outside the presence of any supervisors or managerial representatives
of the employer. No campaigning of any kind may occur in the voting
area. The only people who are allowed in the voting area are the NLRB
agent, the employees who are voting, and certain designated employee
observers.
The ultimate question of union representation is determined by the
majority of the number of valid votes cast. If a majority of votes are
cast in favor of the union, the Board will certify the union as the
exclusive bargaining representative of all employees in the collective
bargaining unit. Once a union is certified by the Board, it becomes the
exclusive representative of the entire unit of employees, regardless of
whether they voted for the union. This means that even if an employee
previously had an open and cordial relationship with his employer, that
employee must now go through the union for many questions or requests
they would otherwise have posed directly to the employer. The employer
is obligated to bargain with the union in good faith with respect to
all matters relating to wages, hours and working conditions of the
bargaining unit employees.
The secret ballot process allows all employees to express their
position on whether to have a union. Under the card check process, only
those who sign the card will be expressing their view. Employees who do
not favor having a union will have no opportunity to indicate this, and
may very well end up having a union imposed on them against their
wishes. Indeed, it is well understood that some employees who sign
authorization cards do so just to get the organizer to stop bothering
them, or because they were asked to do so by a friend, and may actually
intend to vote against having a union when they are in the privacy of
the voting booth.\2\
---------------------------------------------------------------------------
\2\ ``Workers sometimes sign union authorization cards not because
they intend to vote for the union in the election but to avoid
offending the person who asks them to sign, often a fellow worker, or
simply to get the person off their back, since signing commits the
worker to nothing (except that if enough workers sign, the employer may
decide to recognize the union without an election).'' NLRB v. Village
IX, Inc., 723 F.2d 1360, 1371 (7th Cir. 1983).
---------------------------------------------------------------------------
The card check process moves the decision about whether to have a
union from the protection of the NLRB supervised election area and
voting booth, out into the unsupervised open arena. An employee would
be exposed to all manner of contacts and potential intimidation,
threats and coercion to secure their signature. Furthermore, unlike the
election process, a card check campaign has no time limit--it can last
indefinitely until the union gets the number of signatures it needs to
get over 50 percent. This replaces a process with specific protections
and rules for both sides with one that entirely favors the union--not
the employees--with no protections for either the employer or
employees.
EFCA would mandate that if the union is able to present signatures
from more than 50 percent of the employees in the relevant bargaining
unit, the Board will certify the union as the representative of that
unit. While technically this does not repeal the provisions of the
National Labor Relations Act providing for a secret ballot election, it
completely obviates any reason why such an election would be held. The
union will always seek to obtain enough signatures to claim more than
50 percent, at which point it will be recognized without an election.
The benefits and protections of a secret ballot election process
have even been recognized by Rep. George Miller in a letter to Mexican
labor authorities in August, 2001:
[W]e are writing to encourage you to use the secret ballot in
all union recognition elections.
We understand that the secret ballot is allowed for, but not
required, by Mexican labor law. However, we feel that the
secret ballot is absolutely necessary in order to ensure that
workers are not intimidated into voting for a union they might
not otherwise choose.
We respect Mexico as an important neighbor and trading
partner, and we feel that the increased use of the secret
ballot in union recognition elections will help bring real
democracy to the Mexican workplace. (emphasis added)
The letter was co-signed by 15 other members of the House,
including then Rep. Bernie Sanders, who is now a Senator and a member
of the Health Education, Labor, and Pensions Committee. These members
all believed that the only way to accurately ascertain the true wishes
of employees on the question of union representation was to conduct a
secret ballot election.
The right to vote in private has been a cornerstone of the Nation's
political democracy for exactly the same reason it underpins workplace
democracy--too much rides on the outcome to allow voters/employees to
be vulnerable to coercion or intimidation. Exposing employees to such
tactics has a corrosive effect on the credibility of the process and
creates the very real possibility of a fraudulent outcome if a majority
of employees do not support a union.
SECTION 3--IMPOSING UNION-DRIVEN FIRST CONTRACTS
Not only will EFCA deny employees an opportunity to vote on whether
they are represented by a union, it could then deny them the
opportunity to have any say in the contract under which they will have
to work.
This section would also destroy the foundational principle of labor
law that the parties are to negotiate out their differences, and the
government should not decide who wins or impose its version of a
``reasonable'' agreement. If the parties are unable to agree on a first
contract after 120 days, including only 30 days working with the
Federal Mediation and Conciliation Service, then the matter would be
referred to an arbitrator who would decide the terms of the first
contract and the employer and employees would be bound to it for 2
years. This creates a strong incentive for the union to stretch out the
bargaining process to push the matter to binding arbitration where they
can expect to ``win'' more than the employer is willing or able to
provide.
The Chamber does not believe that a government arbitrator will have
the ability or knowledge of the employer's operations so that he or she
can realistically tell an employer how to run its workplace, from
setting wages, benefits, and pension contributions to other terms and
conditions of employment--from the most significant to the most
trivial. This grant of authority to the government under private sector
labor law is unprecedented.
Further, this process involves absolutely no employee involvement
or opportunity to express approval or disapproval. Normally, a contract
would be submitted to employees for a ratification vote, but employees
under the system envisioned by this bill would be entirely shut out--
completely at the discretion of the union which frequently promises
wages and benefits during the organizing campaign which the employer
can not provide to induce signatures on the authorization cards. When
these promises are then made part of the bargaining process, the
arbitrator may well, under this new provision, simply impose them as
part of the contract, notwithstanding their unreasonableness, or the
impact they can have on the company's ability to remain competitive.
Putting aside the obvious adverse impact on the employer, employees
will be severely disadvantaged if their jobs are jeopardized or lost
due to an overloaded union contract now mandated by a government-
imposed referee.
SECTION 4--PENALIZING EMPLOYERS BUT NOT UNIONS
This section would mandate that any charges brought against an
employer for discharging or discriminating against an employee while
the employee was seeking union representation, or during the period
after a union is recognized, and a first contract is signed, be
elevated to the highest priority for investigation. It would also award
three times the amount of any back pay lost to the employee as
liquidated damages. Employers may also be subject to civil penalties of
up to $20,000 for any willful or repeated unfair labor practices
committed while employees are seeking union representation or after a
union has been recognized and a first contract has been signed.
These increased penalties and scrutiny are structured as if the
process for seeking union representation would be the same as currently
practiced under Section 9 of the National Labor Relations Act (29
U.S.C. 159) i.e. that the process for seeking union recognition will be
open and public, such as it is when an election has been scheduled.
However, under a card check campaign, the process is much less
structured and obvious--union organizers approach employees outside the
workplace and the process can go on as long as the union wishes until
it gets a majority. Under this process, an employer, such as a small
business, might not even know that this process is under way until the
union presents the required amount of signed authorization cards. The
employer might take a disciplinary action against an employee, for a
legitimate reason, without even knowing that the employee is supporting
unionization, thus triggering the provisions of this section even
though the employer had no knowledge of the union activities at all.
This section also increases penalties only for employers who are
found to be involved in coercion with no increases for unions found to
have coerced employees. Under the card check process, union coercion of
employees to produce signatures is expected to be rampant, yet there
are no increased penalties applying to unions. Employees deserve
protection from all sources of coercion and intimidation, and assuming
that employers are the only source of this overlooks the realities of
this process.
CONCLUSION
The EFCA would undermine fundamental rights and privileges
currently enjoyed by employees, and protections designed to ensure a
fair process so that both sides can have faith that the outcome is a
truthful representation of employee desires on whether to have a union
in their workplace. The bill would impose unreasonable contracts on
employers, forcing terms and work conditions which could eliminate
their flexibility and ability to be competitive in an unrelenting
global marketplace. Finally, the bill creates an entirely one-sided
enhanced penalty structure without acknowledging the very real
potential union coercion and intimidating behavior that impacts
vulnerable workers.
Sincerely,
Randel K. Johnson,
Vice President, Labor, Immigration and Employee Benefits.
______
National Restaurant Association,
March 26, 2007.
Hon. Edward M. Kennedy,
Chairman,
U.S. Senate,
Health, Education, Labor, and Pensions Committee,
Washington, DC. 20510.
Hon. Michael B. Enzi,
Ranking Member,
U.S. Senate,
Health, Education, Labor, and Pensions Committee,
Washington, DC. 20510.
Dear Chairman Kennedy and Ranking Member Enzi: As one of the
Nation's largest private sector employers providing jobs to 12.8
million individuals, we are writing in opposition to the so-called
``Employee Free Choice Act.'' We strongly believe that it is completely
inappropriate to deny a worker's fundamental right to a private ballot
election for purposes of determining union representation.
The restaurant industry is proud to be a dynamic industry where our
workers frequently move up to management and ownership. In fact, 8 out
of 10 salaried employees started as hourly employees. We believe it is
highly important to defend our workers and their rights to privacy if
they ever have to choose whether to join a union.
A worker's decision whether or not to participate in a union is an
important one. We believe this is a decision that is best made in
private, so that workers are protected from coercion and influence from
both union representatives, employers or both. The sanctity of private
ballot voting is a cornerstone of our democracy. If EFCA were approved,
this fundamental right of workers would be taken away for purposes of
determining union representation.
Our opposition to this legislation is based upon our concerns for
the process EFCA proposes. If it only takes a simple majority of signed
authorization cards to determine if a workplace is unionized, it is
quite possible that many workers with concerns for unionizing will be
shut out of the process. The card-check process also provides no
opportunity for the employer to provide their perspective. We believe
the existing federally supervised NLRB election process is a more fair
and balanced approach.
In addition to our concerns with the undemocratic card-check
process, we also have serious concerns with the binding arbitration
requirements and increased employer penalties that are included in the
bill. These provisions would also have a significant negative impact on
restaurants and other small businesses.
We urge the committee to oppose the so-called ``Employee Free
Choice Act.''
Thank you,
Peter Kilgore,
Acting President and Chief Executive Officer.
John Gay,
Senior Vice President, Government Affairs and Public Policy.
______
Independent Electrical Contractors (IEC),
Alexandria, VA. 22302,
March 26, 2007.
Hon. Edward Kennedy,
Chairman,
Committee on Health, Education, Labor, and Pensions,
U.S. Senate,
Washington, DC. 20510.
Dear Chairman Kennedy: I am writing on behalf of the Independent
Electrical Contractors, Inc. (IEC) in opposition to the Employee Free
Choice Act (EFCA). IEC is a trade association representing 2,700 merit
shop electrical and systems contractors across the United States, two-
thirds of which are small businesses that employ 10 or fewer
individuals.
The Employee Free Choice Act (EFCA) would eliminate union
organizing elections and replace them with a card check system that
would force an employer to recognize a union when half of his or her
employees sign union authorization cards.
IEC contractors choose to make their living based on the merit shop
business philosophy, and their employees have made the same choice.
With a card check system, however, a union could approach individual
employees and pressure them to sign an authorization card. This kind of
coercive organizing method does a disservice to both the employer and
the employee. If the union is confident that the employees want to be
organized, then they should not have a problem with a private ballot
election conducted by the National Labor Relations Board.
Furthermore, the EFCA contains a provision that mandates
compulsory, binding arbitration as part of the collective bargaining
process. This misguided language would have a government official
making labor contract decisions that are binding upon both parties.
This would mean that the small business owner would have no real voice
in his own business nor would the union employees be provided with the
opportunity to vote on their new contract.
This legislation runs counter to the ideals of free enterprise and
democracy. These values have made America the great Nation that it is
today, and that is why IEC opposes the Employee Free Choice Act.
Sincerely,
Brian Worth,
Vice President, Government Affairs.
______
International Foodservice Distributors Association
(IFDA),
March 26, 2007.
Hon. Edward M. Kennedy,
Chairman,
U.S. Senate,
Committee on Health, Education, Labor, and Pensions,
Washington, DC. 20510.
Hon. Michael B. Enzi,
Ranking Member,
U.S. Senate,
Committee on Health, Education, Labor, and Pensions,
Washington, DC. 20510.
Dear Chairman Kennedy and Ranking Member Enzi: On behalf of the
members of the International Foodservice Distributors Association
(IFDA), I am writing to express our opposition to the so-called
Employee Free Choice Act or ``card-check'' legislation. IFDA believes
this bill would be a dramatic, negative change to the American
workplace and would deprive workers of the fundamental American right
of a secret ballot election to determine union representation.
The Employee Free Choice Act would replace the privacy of election
booths with the very public ``card check recognition'' process where
employees make their choice for or against the union by signing
authorization cards in front of union organizers and co-workers that
support union representation. Employees have no protection in such a
process and often sign cards for a variety of reasons such as not to
anger coworkers. If card check recognition were to be required,
employees would lose the freedom to decide their own future--free of
intimidation or coercion--one of the most important protections they
are granted under the National Labor Relations Act (NLRA).
The Employee Free Choice Act also contains a provision that
mandates compulsory, binding arbitration on the employer and the
employees as part of the collective bargaining process. This misguided
language would have a third-party government official making labor
contract decisions within 120 days of recognition that are binding upon
both parties. The owner of a foodservice distribution company would
have no real voice in their own business nor would the union employees
be provided with the opportunity to vote on their new contract.
Denying workers the protection they are provided by secure and
private voting is simply undemocratic. I urge you not to support the
Employee Free Choice Act.
Sincerely,
Jonathan Eisen,
Senior Vice President, Government Relations.
______
National Association of Manufacturers (NAM),
March 26, 2007.
Hon. Edward Kennedy,
Chairman,
Committee on Health, Education, Labor, and Pensions,
Washington, DC. 20510.
Hon. Michael Enzi,
Ranking Member,
Committee on Health, Education, Labor, and Pensions,
Washington, DC. 20510.
Dear Chairman Kennedy and Ranking Member Enzi: On behalf of the
National Association of Manufacturers (NAM), the Nation's largest
industrial trade association representing small and large manufacturers
in every industrial sector and in all 50 States, I write in strong
opposition to H.R. 800, the so-called ``Employee Free Choice Act'' (or
EFCA). This legislation, which recently passed the House, effectively
changes more than 70 years of precedent. Manufacturers of all sizes and
in every sector have serious concerns with this legislation,
particularly how it will restrict employees' freedom to choose whether
union representation is right for themselves and their families.
The EFCA would allow union organizers to bypass the federally
supervised election process entirely, and require a majority of signed
authorization cards to achieve certification. Employees who do not sign
a card, or are not even approached to sign such a card, will be without
a ``free choice.'' NLRB case law is full of examples where the use of
card checks have been challenged on coercion, misrepresentation,
forgery, fraud, peer pressure and promised benefits. Expansion of this
practice would only further intimidate and threaten the freedoms of
American workers.
Additionally, this bill departs from more than seven decades of
precedent established by the National Labor Relations Act (NLRA) of
1935. It imposes contract terms on private employers and their
employees through a process of compulsory, binding arbitration.
Essentially, government arbiters will establish wages and terms between
the two parties. In these instances, the employees will be unable to
vote or ratify the contract. This provision completely rewrites the
NLRA and overturns what Congress intended in 1935, when it stated that
the obligation to bargain collectively ``does not compel either party
to agree to a proposal or require the making of a concession.''
Imposing contract terms through compulsory arbitration is an
unconstitutional infringement on the right of private employers to
freedom of contract.
The NAM strongly opposes legislation that not only interferes with
the democratic process, but also forces private enterprise to agree to
contract terms or face government intervention and, ultimately, wages
and benefit terms that are established by the government.
Should you have any questions regarding this matter, please feel
free to contact me or the NAM's Jason Straczewski at (202) 637-3129 or
[email protected].
Sincerely,
John Engler.
______
National Retail Federation,
March 26, 2007.
Hon. Edward Kennedy,
Chairman,
Committee on Health, Education, Labor, and Pensions,
U.S. Senate,
Washington, DC. 20510.
Dear Chairman Kennedy: On behalf of the National Retail Federation,
I am writing in opposition to the misnamed ``Employee Free Choice Act
(EFCA),'' legislation that would take away workers' right to secret
ballots in union elections.
This measure would require the National Labor Relations Board to
certify a union if presented with signed authorization cards from a
majority of employees the union is seeking to organize, eliminating the
long-standing National Labor Relations Act requirement for secret
ballots in union elections. The EFCA also includes other equally
onerous provisions such as compulsory arbitration of first contracts
and enhanced penalties.
The Senate Health, Education, Labor, and Pensions Committee is
holding a hearing on EFCA this week. As American workers find out more
about the surprising details included in the bill, they understand how
EFCA will take away their rights in workplaces around the country. A
recent national poll found that 89 percent of voters, when asked to
make a choice whether a worker's vote to organize a union should remain
private or be public information, said the vote should remain private.
The changes to Federal labor law proposed in H.R. 800 are too important
for the committee to rush to judgment. Therefore, we urge the committee
to hold additional hearings on this measure so that the American people
can learn more about this misguided legislation.
For over 60 years, the choice about whether a union will serve as
the bargaining representative of a group of employees has been made by
employees voting in a private, federally supervised secret-ballot
election. The secret-ballot election is the fairest way to guarantee
the rights of employees to freely choose whether or not to be
represented by a union. It allows for a private, confidential vote by
employees, based on the principles of the American system of democracy.
The National Retail Federation strongly urges you to oppose EFCA.
Sincerely,
Robert J. Green,
Vice President,
Government and Political Affairs.
______
Retail Industry Leaders Association (RILA),
March 26, 2007.
Hon. Edward M. Kennedy,
Chairman,
Committee on Health, Education, Labor, and Pensions,
U.S. Senate,
Washington, DC. 20510.
Hon. Michael B. Enzi,
Ranking Member,
Committee on Health, Education, Labor, and Pensions,
U.S. Senate,
Washington, DC. 20510.
Dear Chairman Kennedy and Ranking Member Enzi: I am writing on
behalf of the Retail Industry Leaders Association (RILA) to express our
opposition to the so-called ``Employee Free Choice Act,'' as
fundamentally incompatible with protecting the interests of workers to
choose whether to have a union in private, free of coercion.
The Retail Industry Leaders Association promotes consumer choice
and economic freedom through public policy and industry operational
excellence. Our members include the largest and fastest growing
companies in the retail industry--retailers, product manufacturers, and
service suppliers--which together account for more than $1.5 trillion
in annual sales. RILA members provide millions of jobs and operate more
than 100,000 stores, manufacturing facilities and distribution centers
domestically and abroad.
We believe the only way to guarantee worker protection from
coercion and intimidation is through the continued use of a federally
supervised private ballot election so that personal decisions about
whether to join a union remain private. Citizens from both union and
non-union households overwhelmingly oppose the bill's assault on
individual rights. Polling by the Coalition for a Democratic Workplace
reveals that:
87 percent of voters agree that ``every worker should
continue to have the right to a federally supervised secret ballot
election when deciding whether to organize a union'';
Four out of five voters specifically oppose this
legislation;
89 percent of voters believe organizing votes should
remain confidential and not be made public; and
80 percent of union households oppose the so-called
``Employee Free Choice Act.''
Additionally, this legislation departs from over seven decades of
precedent established by the National Labor Relations Act. It imposes
contract terms on private employers through a process of compulsory,
binding arbitration. Government arbiters will establish wages and terms
between the two parties, leaving employees out of the process since
they will not be provided with the opportunity to vote on the new
contract. Imposing contract terms through compulsory arbitration is an
unconstitutional infringement on the right of private employers and
employees to freedom of contract.
RILA joins a majority of Americans who oppose the ``Employee Free
Choice Act,'' which not only interferes with the democratic process,
but it also forces private enterprise to agree to contract terms or
face government intervention and, ultimately, wages and benefit terms
that are established by the government.
Sincerely,
Sandra L. Kennedy,
President.
______
Congressional Research Service,
Washington, DC. 20540-7000,
March 5, 2007.
Memorandum
To: Senate Committee on Health, Education, Labor, and Pensions
Attention: Kyle Hicks
From: Jon O. Shimabukuro, Legislative Attorney, American Law Division
Subject: Employee Free Choice Act of 2007
This memorandum responds to your question concerning H.R. 800, the
Employee Free Choice Act of 2007 (``EFCA'').\1\ The EFCA would amend
the National Labor Relations Act (``NLRA'') to require the National
Labor Relations Board (``the Board'') to certify an individual or labor
organization as the exclusive representative of a bargaining unit if
the Board finds that a majority of employees in an appropriate unit has
signed valid authorizations designating the individual or labor
organization as its bargaining representative. You asked whether the
EFCA would still permit a secret ballot election to select an exclusive
representative if the majority of employees who signed valid
authorizations specifically requested such an election.
---------------------------------------------------------------------------
\1\ H.R. 800, 110th Cong., 1st Sess. (2007). For additional
information on the Employee Free Choice Act, see CRS Rept. RS21887, The
Employee Free Choice Act, by Jon O. Shimabukuro.
---------------------------------------------------------------------------
Section 2 of the EFCA would add the following paragraph to section
9(c) of the NLRA:
(6) Notwithstanding any other provision of this section,
whenever a petition shall have been filed by an employee or
group of employees or any individual or labor organization
acting in their behalf alleging that a majority of employees in
a unit appropriate for the purposes of collective bargaining
wish to be represented by an individual or labor organization
for such purposes, the Board shall investigate the petition. If
the Board finds that a majority of the employees in a unit
appropriate for bargaining has signed valid authorizations
designating the individual or labor organization specified in
the petition as their bargaining representative and that no
other individual or labor organization is currently certified
or recognized as the exclusive representative of any of the
employees in the unit, the Board shall not direct an election
but shall certify the individual or labor organization as the
representative described in subsection (a).
The use of the word ``shall'' in the last sentence of the proposed
paragraph seems to indicate that an election would be unavailable once
the Board concludes that a majority of the employees in an appropriate
unit has signed valid authorizations designating an individual or labor
organization as its bargaining representative. In general, the word
``shall'' is considered to be imperative or mandatory.\2\ Unlike the
word ``may'' which is given a permissive meaning that suggests the use
of discretion, the word ``shall,'' in the absence of evidence of
contrary legislative intent, is inconsistent with the idea of
discretion.\3\
---------------------------------------------------------------------------
\2\ See 82 C.J.S. Statutes Sec. 368 (1999). See also 1A Sutherland
Statutes and Statutory Construction Sec. 25:4 (Norman J. Singer ed.,
2002) (``Unless the context otherwise indicates the use of the word
``shall'' . . . indicates a mandatory intent.'').
\3\ 82 C.J.S. Statutes, supra note 2.
---------------------------------------------------------------------------
The legislative history of the EFCA supports the notion that the
word ``shall'' should be viewed as imperative. House Report 110-23,
which accompanies the EFCA, states firmly: ``Indeed, if a majority sign
and submit valid authorization cards to the NLRB, notwithstanding any
other provision in the NLRA, the NLRB must certify their union.'' \4\
The use of the word ``must'' by the House Committee on Education and
Labor appears to confirm that certification by the NLRB would seem to
always follow the submission of valid authorizations by a majority of
employees in an appropriate unit.
---------------------------------------------------------------------------
\4\ H.R. Rep. No. 110-23, at 26 (2007).
---------------------------------------------------------------------------
______
Response to Questions of Senator Hatch and Senator Coburn
by Peter J. Hurtgen
QUESTIONS OF SENATOR HATCH
Question 1. Because the first contract imposed by the Federal
Government through compulsory arbitration is ``binding'' on the
parties, the employees who are subject to the government's imposed
wages, benefits, and other terms and conditions of employment will have
no right to a ratification vote to approve or reject the contract as
they would under current law if the contract were freely negotiated
without government interference. In other words, it doesn't matter what
the employees think or want, once the Federal Government has spoken and
the contract is binding for 2 years like it or not.
Is that correct?
Answer 1. Yes.
Question 2. Because the government-imposed contract is binding on
the parties, the employees will not be allowed to strike to enforce
their contract demands if the parties reached impasse as they are under
current law if the contract were freely negotiated. Also, of course,
the employees would not be permitted to strike for the duration of the
contract.
Is that correct?
Answer 2. It is unclear whether they could strike to enforce
demands. It is clear that they could not strike for the duration of the
contract to achieve changes in benefits, wages, or working conditions;
or for any other reason if the contract contains a no-strike clause.
Question 3. Since the government-imposed contract would be binding
for 2 years, under the ``contract bar'' doctrine neither the employer
nor the employees would be permitted to challenge the union's
continuing majority status through an NRLB-
supervised secret ballot decertification or deauthorization election
for the term of the contract. That's an additional 2-year denial of the
right of workers to a secret ballot election to express their views on
the union.
Is that correct?
Answer 3. Yes.
Question 4. Now I want to ask you a few questions about the effect
of compulsory binding interest arbitration on the national labor policy
of free collective bargaining.
First, I want to establish the difference between ``interest
arbitration'' and ``grievance arbitration.''
Answer 4. Yes, they are fundamentally different.
Question 5. Is it correct that: In ``grievance arbitration'' the
answers to the dispute are to be found within the ``four corners'' of
the pre-existing contract . . . the arbitrator's job is interpreting
and applying what the parties have agreed to.
``Interest arbitration,'' on the other hand, is an arbitrator's
judgment, imposed on the parties in the absence of a contract, as to
what in his opinion the parties should have agreed to, or would have
agreed to, absent arbitration. So, such determinations imposed on the
parties will be affected by the arbitrator's own economic or social
theories, often without the benefit or understanding of practical,
competitive economic forces. It is for that reason that most employers
shudder at the thought of an outside government arbitrator with the
power of the company's economic life and death in the balance.
Answer 5. Yes.
Question 6. Do you agree that Elkouri & Elkouri, ``How Arbitration
Works'' (6th Ed, 2006) published by the ABA section of labor and
employment law is regarded as one of the premier basic texts on
arbitration?
Answer 6. Yes.
Question 7. Quoting from that text, I ask whether you agree or
disagree with the following statements about compulsory binding
interest arbitration:
``Broadly stated, that: (1) it is incompatible with free
collective bargaining, (2) it will not produce satisfactory
solutions to disputes, (3) it may involve great enforcement
problems, and (4) it will have damaging effects on the economic
structure.'' (p. 21).
Answer 7. Yes.
Question 8. ``Compulsory arbitration is a dictatorial and imitative
process rather than a democratic and creative one.'' Id.
Answer 8. Yes.
Question 9. ``Compulsory arbitration means governmental--
politically influenced--determination of wages and will inevitably lead
to governmental regulation of prices, production, and profits; it
threatens not only free collective bargaining, but also the free market
and enterprise system.'' Id at 22.
Answer 9. Yes.
Question 10. In fact, common sense and experience teach some of the
practical flaws in compulsory arbitration:
``Each party will be reluctant to offer compromises in
bargaining for fear that they may prejudice its position in
arbitration. Elimination of the strike from collective
bargaining will eliminate the strongest incentive the parties
may have to reach agreement. One or both of the parties may
make only a pretense at bargaining in the belief that more
desirable terms may be obtained through the arbitration that is
assured if bargaining fails. Because compulsory arbitration
will be used to resolve unknown future disputes, both sides may
list many demands and drop few in bargaining, believing that
little will be lost if some of the `chaff ' is denied by an
arbitrator (who the party may believe would then be more
inclined to favor that party on major issues in order to appear
fair).'' Id at 21.
Answer 10. Yes.
Question 11. I have heard that this provision has not met with
universal support among local unions. After all, it takes negotiations
out of their hands. They will be assured a ``first contract,'' but on
what terms?
Proponents of the bill will point to the fact that first contracts
sometimes take a long time to negotiate, and in some instances the
parties bargain to ``impasse'' giving employers the right to implement
their final terms and the union the right to strike to enforce their
contract demands.
But why is that? In your testimony, Mr. Hurtgen, you give several
reasons why it is difficult for the parties to reach agreement on
initial contracts. The employer is already offering competitive wages
and benefits to employees, there is a lack of any historic track record
between the parties, there may be inexperienced negotiators, or the
union may have elevated employee's expectations beyond its ability to
produce when it comes up against reality at the bargaining table.
Answer 11. Yes.
Question 12a. What happen to the labor law concept of ``impasse''
where the parties are simply unable to agree? Under H.R. 800, would you
agree that the new definition of ``impasse'' will be ``90 days?'' That
whenever negotiations reach 90 days, whether or not the parties are at
impasse, the government steps in with mediation and then dictates the
terms of a contract.
Answer 12a. Yes.
Question 12b. In your experience, is there any uniform timeframe at
which point the parties reach ``impasse?''
Answer 12b. No.
Question 12c. Have you ever negotiated collective bargaining
agreements, or been involved with such agreements at FMCS, where the
parties were bargaining in completely good faith beyond 90 days, but
had not reached ``impasse?''
Answer 12c. Yes, many times.
Question 13a. There is another extremely troubling aspect of the
bill's compulsory ``interest'' arbitration provision.
What is the scope of the government's authority to set wages,
benefits, and other terms and conditions of employment through
compulsory interest arbitration?
Answer 13a. It is unclear and may raise constitutional issues.
Question 13b. For example, I ask you, since nowhere does the bill
clarify the issue, would the arbitrator have the authority to place an
employer in a multiemployer pension plan? The union may be seeking
that, and the employer may disagree (especially if the plan is under
funded and ``at risk''). Could the arbitrator force the employer to
agree?
Answer 13b. Yes.
Question 13c. Could the arbitrator place the employer in a
multiemployer bargaining unit?
Answer 13c. Probably not, because under current law the consent of
all the parties is necessary to the formation of a multiemployer
bargaining unit.
Question 13d. Could the arbitrator impose the wages and benefits
from other union contracts unrelated to the local economy?
Answer 13d. Yes.
Question 13e. Could an arbitrator mandate employer-provided health
insurance coverage, even where the employer's competitors do not
provide such benefits or provide lesser benefits or less costly plans?
Answer 13e. Yes.
Question 13f. What about contract provisions not to contract out,
or subcontract work?
Answer 13f. Yes.
Question 13g. . . . or not to open a new facility without applying
the terms of the union contract?
Answer 13g. Probably not, if it is a non-mandatory subject of
bargaining.
Question 13h. Could an arbitrator mandate union neutrality and card
check at all of the employers operations? What about union access to
the employer's facilities?
Answer 13h. Only if it is a mandatory subject of bargaining and
under current law that is unclear.
Question 13i. Is there anything, short of an illegal subject of
bargaining, that a government arbitrator could not impose through
compulsory interest arbitration? That would include not only all
``mandatory subjects'' of bargaining, but all ``permissive subjects''
as well?
Answer 13i. Probably could not impose on a non-mandatory subject of
bargaining, but it is unclear from the proposed bill.
Question 14. Finally, in your testimony you suggest that compulsory
interest arbitration can take weeks of hearings, and then lengthy
periods for the arbitrator to draft a decision, and even then the
process led to an imposed legislative body solution--not agreements. So
I guess I have to ask, where is the time saving?
Answer 14. There would not be any time saved.
questions of senator coburn
Question 1. In both written and verbal testimony, Professor Estlund
described various tactics and activities employers use to pressure
workers into not supporting union organization. Are those activities
already illegal and subject to enforcement by the NLRB?
Answer 1. Many of the tactics described by Professor Estlund are
illegal, they are subject to NLRB enforcement, and if charges are
promptly filed with the NLRB, either by the union or by the impacted
employees, the charges will be investigated immediately.
Unfair labor practice charges filed by unions or employees during
an initial organizing campaign are considered ``high impact'' cases by
the NLRB. These cases are decided by the NLRB regional offices within 7
weeks of filing of the charge. By the end of that time period, the case
is either dismissed, or a complaint is issued setting the case for
trial.
The NLRB's General Counsel recently issued memoranda to all field
staff encouraging the use of injunctive relief under Section 10(j) of
the Act in initial organizing campaigns.\1\ Congress created Section
10(j) relief as a means to preserve or restore the lawful status quo
ante, so that the purposes of the act are not frustrated and the final
order of the Board is not rendered meaningless by the passage of time.
Congress recognized that an employer's illegal acts could, in some
cases, permanently alter the situation and prevent the Board from
effectively remedying the violations by its final order. NLRB field
staff review all charges filed in initial organizing campaigns and
considers whether they are appropriate for 10(j) relief.\2\ Even while
the NLRB regional office considers 10(j) proceedings, every effort is
made to seek an expedited administrative trial, between 28 days to 8
weeks from the issuance of a complaint.\3\
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\1\ See General Counsel's Memorandum 07-01 Submission of 10(j)
Cases, and General Counsel Memorandum 06-05 First Contract Bargaining
Cases http://www.nirb.gov/research/memos/general_councel_memos.aspx.
\2\ See NLRB Annual Reports for a discussion of cases involving
injunctive relief litigation.
\3\ See Operations Management Memorandum 06-60. See NLRB Annual
Reports for discussion in injunctive relief litigation.
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Although Professor Estlund claims that there is no injunctive
relief for employer unfair labor practices, the statute already
provides for such injunctive relief, and the NLRB's General Counsel has
emphasized the importance of identifying and pursuing such relief as
early as possible in initial contract cases. And even while such relief
is under administrative review, an expedited trial will be sought in
order to remedy these cases as quickly as possible. While I agree with
Professor Estlund's premise that unfair labor practices that occur
during an organizing campaign must be remedied quickly, no statutory
changes are needed where it is clear that NLRB field staff investigate
and pursue unlawful activity in a most expeditious manner, seeking
injunctive relief when appropriate.
Professor Estlund asserts that employers opposed to unionization
threaten employees with job loss or plant closure and employees fear
discharge. As noted in my answer to question 3 below, an employer that
threatens plant closure because of the union's organizing campaign will
be found to have violated the law. Although Professor Estlund claims
that employees cannot be assured that the law will protect them if they
support the union, the key to securing a quick remedy of unfair labor
practices is to promptly contact the NLRB. The NLRB will expeditiously
investigate the charges, decide the merits of the case, and seek relief
either through an expedited trial or through 10(j) proceedings.
Professor Estlund also contends that even after an employer has
violated the act, it takes years to secure a reinstatement remedy. This
is not the case in a large majority of cases. The NLRB's records for
fiscal year 2006 show that of the 37 percent of all cases that were
found to have merit, 96.7 percent of them settled before a trial took
place, a very high settlement rate. A small minority of cases require
full litigation through the Federal appellate court level, and should
that litigation be necessary, the remedial process is a long one.
However, that is a tiny minority of the cases since most meritorious
cases are settled before trial.\4\
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\4\ The number of cases pending at the NLRB's headquarters in D.C.
has declined substantially over the years, demonstrating that less and
less cases are appealed to the NLRB and then to the Federal appellate
courts.
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Regarding backpay, Professor Estlund is correct that the statute is
compensatory--a backpay award is intended to remedy the discharge by
paying employee for lost earnings. While there are no punitive damages,
and generally no fines are assessed against the employer, the Board
does pursue tougher remedies for repeat offenders of the law. If an
employer has violated the law previously, the NLRB will pursue formal
settlements rather than informal settlements. A formal settlement is a
written stipulation providing for, among other things, consent entry of
a court judgment enforcing the Board's order. This gives the NLRB the
ability to file contempt proceedings thereafter, which can be
accompanied by fines for each violation. A formal settlement is
appropriate where there is a history of unfair labor practices or there
is a likelihood of recurrence or extension of current unfair labor
practices.\5\
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\5\ Section 10164, Unfair Labor Practice Casehandling Manual.
http://www.nlrb.gov/publications/manuals/
ulp_casehandling_manual_(l).aspx.
---------------------------------------------------------------------------
Formal settlements are not the only means of taking action against
recidivist employers. Civil contempt actions are taken by the NLRB
where an employer is in contempt of a court-enforced Board order.
Professor Estlund argues that ``many employers . . . have little to
fear from labor law enforcement through a ponderous, delay-ridden legal
system with meager remedial powers.'' With 96 percent of the cases
settling at the regional level, within a few weeks after charges are
filed, one cannot claim that the system is ridden with delays. And
regarding allegedly ``meager remedial powers,'' the NLRB has pursued
many avenues to ensure compliance with its orders. It has obtained
assessment of fines, writs of body attachment, and protective
restraining orders where there has been evidence that a particular
employer has repeatedly and flagrantly violated the law.\6\ The NLRB's
administrative process, in its current form, calls for formal
settlements, consent court judgments, contempt proceedings and more
serious penalties to deter recidivist offenders from engaging in
egregious or repetitive acts of discrimination. No additional changes
to the law are necessary.
---------------------------------------------------------------------------
\6\ See NLRB Annual Report for FY 2005, page 73. http://
www.nlrb.gov/e-gov/e_reading
_room/nlrb_annual_reports.aspx.
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Professor Estlund insinuates that employers should not be entitled
to hold meetings with employees and express opposition to unionization.
However, the law in its current form allows employers the right of free
speech. Section 8(c) of the Act states:
The expressing of any views, argument, or opinion, or the
dissemination thereof, whether in written, printed, graphic, or
visual form, shall not constitute or be evidence of an unfair
labor practice under any of the provisions of this Act
[subchapter], if such expression contains no threat of reprisal
or force or promise of benefit.
An employer is permitted to express its opinion regarding
unionization and even lawfully urge employees to vote against the
union. It may not, however, cross the line into threatening employees
with dire consequences if the union wins an election, as noted more
fully in my response to question 3.
Question 2a. Chairman Hurtgen, with your extensive experience in
collective bargaining negotiations, do you think 120 days is an
adequate period of time to establish a first contract? Why or why not?
Answer 2a. Based on my experience, 120 days is not sufficient to
negotiate an initial collective bargaining agreement. It is not even
sufficient time in many cases for a mature collective bargaining
relationship, considering the complexities of the workplace and the
difficulty of the issues today. I do not believe that any time limit
should be placed on initial contract negotiations, for the reasons set
forth below.
Today, even experienced and amicable labor-management relationships
can take longer than 120 days to reach a successor agreement because of
the complexities of the issues facing the workplace. Employers and
labor unions regard the high costs of health care and pensions as
extremely difficult to negotiate and as a result, many commence
negotiations sometimes as early as 6 months prior to contract
expiration.
Certainly, in a new collective bargaining relationship, where the
parties are negotiating their very first agreement, it can take even
longer to address these complex issues. Negotiating contract language,
for nascent collective bargaining relationships, is a time consuming
process. Indeed, the NLRB has recognized that:
``Parties engaged in initial contract bargaining are likely
to need more time to conclude an agreement than parties who are
bargaining for a renewal contract. It is not unusual for it to
take place in an atmosphere of hard feelings left over from an
acrimonious organizing campaign and the individuals sitting at
the bargaining table may be inexperienced at collective
bargaining. In initial bargaining, unlike in renewal
negotiations, the parties have to establish basic bargaining
procedures and core terms and conditions of employment, which
may make negotiations more protracted than in renewal contract
bargaining.'' \7\
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\7\ Lee Lumber, 334 NLRB 399 (2001).
Most labor and management representatives would agree that when
parties are negotiating for an initial contract, there are difficulties
often encountered in hammering out fundamental procedures, rights, wage
scales, and benefit plans in the absence of previously established
practices. For this reason, a statutory time limit for reaching a first
contract is tantamount to setting up the process, and the parties'
relationship, for failure.
The NLRB and the courts of appeal have long applied a 1-year
insulated period where a union has been newly certified following a
Board-conducted election. It is called the ``certification year'' rule,
and a newly certified union's status cannot be questioned for 1 year
after certification. ``When a bargaining relationship has been
initially established, it must be given a reasonable time to work and a
fair chance to succeed'' before an employer can question the union's
majority status, or before employees can move to decertify the union.
See Lee Lumber, supra. The NLRB has also held that ``there are no rules
concerning what constitutes a ``reasonable time'' to negotiate an
agreement; each case must rest on its own particular facts. However,
``a reasonable period of time'' does not depend on either the passage
of time, or on the number of meetings between the parties.'' Id.
In my view, newly established collective bargaining relationships
must be given special attention, but not by statutorily mandating that
they reach agreement in a specific time period. They must be given a
reasonable period of time to meet, discuss the issues effecting that
particular workplace, hammer out contract language, and build their
relationship. To engage in such a complex process, yet restrict it to a
120-time period sets up the parties for failure.
Question 2b. To the best of your knowledge, historically, what is
the average time period whereby a first contract is established?
Answer 2b. In Lee Lumber, 332 NLRB 399 (2001), the Board relied on
data from the Federal Mediation and Conciliation Service to determine
the average length of time to achieve a first contract. According to
the FMCS, the average length of time after certification for newly
certified unions to reach initial contracts was 296 days in fiscal year
1998, 313 days in fiscal year 1999, and 347 days in fiscal year 2000.
This data has not been reproduced, to my knowledge, since 2000.
I would caution, however, that much has transpired in the 7 years
since that data was reported. The rapid rise of the global economy, the
meteoric rise in the costs of employer-sponsored health care, legacy
costs, and pension benefits has placed a significant burden on employer
and union relationships. These factors only make initial contract
negotiations more complicated and time consuming than it was a few
short years ago.
The FMCS keeps initial contract cases open for a 2-year period
after the certification. If, within that 2-year period, a contract is
reached, FMCS closes the case with an indication that an agreement was
reached. If there was no contract reached after 2 years, the FMCS no
longer tracks the progress of that case and administratively closes the
case, noting that no agreement was reached as of the time of the
closing.
I recently filed a FOIA request seeking information regarding
initial contracts. To date, the FMCS has not released certain
information that would be helpful to securing better data on the
average time to achieve a first contract. In order to provide more
current information, FMCS could provide the basis for closing initial
contract cases (i.e., whether a contract was reached or not). To date,
the FMCS has not released that data. Having that information would
allow me to better answer this question.
Question 3. Please describe some of the restrictions employers face
during a union organization drive of their employees.
Answer 3. Section 8(a)(1) through Section 8(a)(5) of the National
Labor Relations Act details unfair labor practices against employers.
The National Labor Relations Board, and the courts of appeal, interpret
the statute in greater detail through case law. The list below
represents only some of the restrictions an employer faces during an
organizing campaign. It is in no way an exhaustive list of all
restrictions an employer may encounter. Employers cannot:
Interrogate their employees about their support of a union
organizing campaign;
Question their employees as to whether they signed an
authorization card in support of the union;
Engage in surveillance to determine which employees are
involved in union organizing drive;
Change working conditions of their employees in
retaliation for employees' support of a union campaign. Such
prohibitions can include reducing employee's pay, or changing other
benefits such as leave and attendance policies;
Promise employees better pay or working conditions as an
inducement to abandon a union organizing campaign or to discourage
support of the union campaign;
Make working conditions more onerous because employees
were involved in a union organizing campaign;
Suspend or discharge employees, or engage in any other
adverse employment action because they were involved in a union
organizing campaign;
Threaten their employees with loss of jobs or benefits if
they vote for a union or engage in a union organizing campaign;
Threaten to close the plant if employees select a union to
represent them; or
Transfer, layoff, or otherwise punish employees because
they engaged in a union campaign.
Questions of Senator Hatch to Professor Cynthia L. Estlund
Question 1. Professor Estlund, I noticed that you had very little
to say in your testimony about compulsory, binding interest arbitration
of first contracts. Is that because you have little direct experience
at the bargaining table negotiating contracts? How many first contracts
have you negotiated?
Question 2. Are you aware that many union negotiators have resisted
even voluntary interest arbitration to address protracted bargaining
disputes, such as the recent west coast ports strike where the parties
were at impasse at the bargaining table? We're informed that many local
unions do not support the compulsory binding first contract interest
arbitration provision in H.R. 800. Are you aware of that, as well?
Question 3. Are you familiar with the Elkouri & Elkouri text
entitled ``How Arbitration Works'' published by the American Bar
Association's section on labor and employment law (6th Ed. 2006), and
do you recognize it as an authoritative basic text on the subject?
Then I want to get your reaction to the following statements from
that text.
Quoting from that text, I ask whether you agree or disagree with
the following statements about compulsory binding interest arbitration:
``Broadly stated, that: (1) it is incompatible with free
collective bargaining, (2) it will not produce satisfactory
solutions to disputes, (3) it may involve great enforcement
problems, and (4) it will have damaging effects on the economic
structure.'' (p. 21).
``Compulsory arbitration is a dictatorial and imitative
process rather than a democratic and creative one.'' Id.
``Each party will be reluctant to offer compromises in
bargaining for fear that they may prejudice its position in
arbitration. Elimination of the strike from collective
bargaining will eliminate the strongest incentive the parties
may have to reach agreement. One or both of the parties may
make only a pretense at bargaining in the belief that more
desirable terms may be obtained through the arbitration that is
assured if bargaining fails. Because compulsory arbitration
will be used to resolve unknown future disputes, both sides may
list many demands and drop few in bargaining, believing that
little will be lost if some of the `chaff ' is denied by an
arbitrator (who the party may believe would then be more
inclined to favor that party on major issues in order to appear
fair).'' Id. at 21.
Question 4. Professor, do you agree that under binding forced
interest arbitration of first contracts, employees would lose their
right to vote whether to ratify or approve the wages, benefits, and
other terms and conditions of employment under which they will work as
a result of the arbitrator's imposed 2-year contract.
In other words, it doesn't matter what the employees think or want,
once the Federal Government has spoken through a government-appointed
arbitrator, and the contract is binding on those employees for 2 years
whether they like it or not.
Question 5. So I ask you, professor, where's the ``employee free
choice'' in disenfranchising employees from voting to approve or reject
the wages, terms, and other conditions they would be subject to for the
first 2 years of a union contract?
[Editor's Note: Responses to the above questions were not available
at time of print.]
[Whereupon, at 11:38 a.m., the hearing was adjourned.]