[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]



 
                   WHAT SHOULD WORKERS AND EMPLOYERS
                     EXPECT NEXT FROM THE NATIONAL
                         LABOR RELATIONS BOARD?

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

                                HEARING

                               before the

                        SUBCOMMITTEE ON HEALTH,
                    EMPLOYMENT, LABOR, AND PENSIONS

                         COMMITTEE ON EDUCATION
                           AND THE WORKFORCE

                     U.S. House of Representatives

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                               __________

             HEARING HELD IN WASHINGTON, DC, JUNE 24, 2014

                               __________

                           Serial No. 113-60

                               __________

  Printed for the use of the Committee on Education and the Workforce
  
  
  
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                COMMITTEE ON EDUCATION AND THE WORKFORCE

                    JOHN KLINE, Minnesota, Chairman

Thomas E. Petri, Wisconsin           George Miller, California,
Howard P. ``Buck'' McKeon,             Senior Democratic Member
    California                       Robert C. ``Bobby'' Scott, 
Joe Wilson, South Carolina               Virginia
Virginia Foxx, North Carolina        Ruben Hinojosa, Texas
Tom Price, Georgia                   Carolyn McCarthy, New York
Kenny Marchant, Texas                John F. Tierney, Massachusetts
Duncan Hunter, California            Rush Holt, New Jersey
David P. Roe, Tennessee              Susan A. Davis, California
Glenn Thompson, Pennsylvania         Raul M. Grijalva, Arizona
Tim Walberg, Michigan                Timothy H. Bishop, New York
Matt Salmon, Arizona                 David Loebsack, Iowa
Brett Guthrie, Kentucky              Joe Courtney, Connecticut
Scott DesJarlais, Tennessee          Marcia L. Fudge, Ohio
Todd Rokita, Indiana                 Jared Polis, Colorado
Larry Bucshon, Indiana               Gregorio Kilili Camacho Sablan,
Lou Barletta, Pennsylvania             Northern Mariana Islands
Joseph J. Heck, Nevada               Frederica S. Wilson, Florida
Mike Kelly, Pennsylvania             Suzanne Bonamici, Oregon
Susan W. Brooks, Indiana             Mark Pocan, Wisconsin
Richard Hudson, North Carolina       Mark Takano, California
Luke Messer, Indiana
Bradley Byrne, Alabama

                    Juliane Sullivan, Staff Director
                Megan O'Reilly, Minority Staff Director
                                 ------                                

        SUBCOMMITTEE ON HEALTH, EMPLOYMENT, LABOR, AND PENSIONS

                   DAVID P. ROE, Tennessee, Chairman

Joe Wilson, South Carolina           John F. Tierney, Massachusetts,
Tom Price, Georgia                     Ranking Member
Kenny Marchant, Texas                Rush Holt, New Jersey
Matt Salmon, Arizona                 Mark Pocan, Wisconsin
Brett Guthrie, Kentucky              Robert C. ``Bobby'' Scott, 
Scott DesJarlais, Tennessee              Virginia
Larry Bucshon, Indiana               Ruben Hinojosa, Texas
Lou Barletta, Pennsylvania           David Loebsack, Iowa
Joseph J. Heck, Nevada               Joe Courtney, Connecticut
Mike Kelly, Pennsylvania             Jared Polis, Colorado
Susan W. Brooks, Indiana             Gregorio Kilili Camacho Sablan,
Luke Messer, Indiana                   Northern Mariana Islands
Bradley Byrne, Alabama               Frederica S. Wilson, Florida
                                     Suzanne Bonamici, Oregon
                                     
                                     
                                 (II)    
                                     
                                     
                            C O N T E N T S

                              ----------                              
                                                                   Page

Hearing held on June 24, 2014....................................     1

Statement of Members:
    Roe, Hon. David P., Chairman, Subcommittee on Health, 
      Employment, Labor, and Pensions............................     1
        Prepared statement of....................................     3
    Tierney, Hon. John F., a Representative in Congress from the 
      State of Massachusetts.....................................     4
        Prepared statement of....................................     6
Statement of Witnesses:
    Borden, Seth, H., Partner, McKenna Long & Aldridge LLP, New 
      York, New York,............................................    22
        Prepared statement of....................................    24
    Coppess, James, Associate General Counsel, AFL-CIO, 
      Washington, DC.............................................    35
        Prepared statement of....................................    37
    King, G. Roger, of Counsel, Jones Day, Columbus, Ohio........    48
        Prepared statement of....................................    50
    Puzder, Andrew, F., CEO, CKE Restaurants, Carpinteria, 
      California.................................................     7
        Prepared statement of....................................    10
Additional Submissions:
    Mr. Tierney:
        Prepared statement of United Steelworkers................    92
        Letter dated October 23, 2011, from Employee Organizing 
          Committee of Speciality Healthcare & Rehabilitation 
          Center, Mobile, Alabama................................    97
          
          
          
                                (III) 
                                
                                
          


             WHAT SHOULD WORKERS AND EMPLOYERS EXPECT NEXT



                FROM THE NATIONAL LABOR RELATIONS BOARD?

                              ----------                              


                         Tuesday, June 24, 2014

                       House of Representatives,

              Subcommittee on Health, Employment, Labor, &

                Pensions, Committee on Education and the

                               Workforce,

                            Washington, D.C.

                              ----------                              

    The subcommittee met, pursuant to call, at 10:07 a.m., in 
Room 2175, Rayburn House Office Building, Hon. Phil Roe 
[chairman of the subcommittee] presiding.
    Present: Representatives Roe, Wilson, Guthrie, Bucshon, 
Kelly, Brooks, Messer, Byrne, Tierney, Holt, Pocan, Scott, 
Courtney, and Bonamici.
    Also present: Chairman Kline.
    Staff present: Janelle Belland, Coalitions and Members 
Services Coordinator; Ed Gilroy, Director of Workforce Policy; 
Benjamin Hoog, Senior Legislative Assistant; Marvin Kaplan, 
Workforce Policy Counsel; Nancy Locke, Chief Clerk; James 
Martin, Professional Staff Member; Zachary McHenry, Senior 
Staff Assistant; Daniel Murner, Press Assistant; Brian Newell, 
Communications Director; Krisann Pearce, General Counsel; 
Alissa Strawcutter, Deputy Clerk; Juliane Sullivan, Staff 
Director; Tylease Alli, Minority Clerk/Intern and Fellow 
Coordinator; Melissa Greenberg, Minority Labor Policy 
Associate; Eunice Ikene, Minority Labor Policy Associate; Brian 
Kennedy, Minority General Counsel; Julia Krahe, Minority 
Communications Director; Leticia Mederos, Minority Director of 
Labor Policy; Richard Miller, Minority Senior Labor Policy 
Advisor; Megan O'Reilly, Minority Staff Director; Amy Peake, 
Minority Labor Policy Advisor; Michael Zola, Minority Deputy 
Staff Director; and Mark Zuckerman, Minority Senior Economic 
Advisor.
    Chairman Roe. A quorum being present, the Subcommittee on 
Health, Employment, Labor, and Pensions will come to order.
    Good morning. I would like to welcome our guests and thank 
our witnesses for joining us. We appreciate the time you have 
taken out of your busy schedules to participate in today's 
hearing.
    Four years ago, the Obama Administration promised the start 
of a ``recovery summer." The American people were told at the 
time the nation was about to enter a period of strong growth 
and job creation. We know four years later that simply wasn't 
the case. Instead of a robust recovery, the nation continued to 
struggle with a jobs crisis that is hurting working families to 
this day.
    It has taken five years to simply regain the jobs lost as a 
result of the recent recession, making it the slowest recovery 
in our nation's history. On our current path, it will take four 
more years before we close what is known as the jobs gap, the 
number of jobs destroyed by the recession plus the number of 
jobs that we simply need to keep pace with population growth. 
Four years after the so-called ``recovery summer," roughly 10 
million Americans are still searching for work, including more 
than three million Americans who have been out of a job six 
months or longer.
    When the focus should be on developing bipartisan solutions 
that will help put people back to work, the Obama 
Administration has spent most of its time promoting a partisan 
agenda at the behest of powerful special interests. That has 
certainly been the case with the National Labor Relations 
Board.
    In response to a steady decline in its membership, unions 
have increasingly relied on federal agencies to tilt the 
balance of power in their favor. The NLRB is at the center of 
this effort, promoting a culture of union favoritism that makes 
it virtually impossible for employers and workers to resist 
union pressure.
    Under President Obama's watch, the board has restricted 
access to the secret ballot, advanced an ambush election rule 
that will stifle employer free speech and cripple worker free 
choice, and begun to bless micro-unions that will tie employers 
up in union red tape while undermining employee freedom in the 
workplace. The NLRB even went so far as to try and dictate 
where a private employer could and could not create jobs. And I 
could go on and on.
    Additionally, there are cases before the board right now 
that threaten to further stack the deck in favor of the 
administration's union allies. For example, the board has 
requested feedback on how to determine joint-employer status 
under the National Labor Relations Act, a standard that has 
been in place for 30 years to determine when two employers 
share immediate and direct control over essential terms and 
conditions of employment, such as hiring, firing, discipline, 
and supervision. This isn't a new concept, so the board's 
recent solicitation is highly suspect and strongly suggests it 
is eager to abandon existing policies in favor of a new 
standard more favorable to union interests.
    The board may also be looking for ways to give union 
organizers greater access to employer property, most notably 
employers' e-mail systems. The board has always instructed 
employers that any policy limiting the use of work e-mail must 
be enforced in a nondiscriminatory way, which means employers 
cannot treat unions any differently than any other non-
charitable organizations. This provides employers a clear 
standard to follow and union organizers a level playing field 
to work on. It is likely the current board majority will seek 
to impose a fundamentally different approach, one that would 
give union organizers practically unfettered access to the 
employers' e-mail systems.
    On their own, these may seem like relatively minor issues. 
However, they are part of a larger pattern that is generating a 
lot of uncertainty, confusion, and anxiety in workplaces across 
this country. Every member of this committee supports the right 
of workers to freely choose whether or not to join a union. It 
is ultimately a decision that rests with each and every 
individual worker. Federal policymakers don't have the 
authority to make that choice for them.
    Today's hearing is a part of the committee's continued 
oversight of the NLRB, but more importantly, a part of our 
commitment to defend the rights of workers and employers.
    I look forward to learning more from our witnesses in our 
discussion later this morning. Before I conclude, I would like 
to take a moment to recognize the new senior Democratic member 
of the subcommittee, Representative John Tierney. I know he is 
passionate and a tireless advocate for working families.
    And John and I have taken the time to get to know each 
other. I know that a lot of times you don't see this, but we 
have taken the opportunity to get to know each other. I have 
been in his office on an informal basis recently. He was very 
gracious. And even though we may not see eye-to-eye on a number 
of issues, I am confident we will find ways to disagree without 
being disagreeable.
    And congratulations on your appointment, Congressman 
Tierney. And with that, I recognize you for your opening 
statement.
    [The statement of Chairman Roe follows:]

Prepared Statement of Hon. Phil Roe, Chairman, Subcommittee on Health, 
                    Employment, Labor, and Pensions

    Good morning. I'd like to welcome our guests and thank our 
witnesses for joining us. We appreciate the time you've taken out of 
your busy schedules to participate in today's hearing.
    Four years ago, the Obama administration promised the start of 
``recovery summer.'' The American people were told at the time the 
nation was about to enter a period of strong growth and job creation. 
We know four years later that simply wasn't the case. Instead of a 
robust recovery, the nation continued to struggle with a jobs crisis 
that is hurting working families to this day.
    It has taken five years to simply regain the jobs lost as a result 
of the recent recession - making this the slowest recovery in our 
nation's history. On the current path, it will take four more years 
before we close what's known as the jobs gap, the number of jobs 
destroyed by the recession plus the number of jobs we need to simply 
keep pace with population growth. Four years after the so-called 
``recovery summer'' and roughly 10 million Americans are still 
searching for work, including more than 3 million Americans who have 
been out of a job for six months or longer.
    When the focus should be on developing bipartisan solutions that 
will help put people back to work, the Obama administration has spent 
most of its time promoting a partisan agenda at the behest of powerful 
special interests. That has certainly been the case with the National 
Labor Relations Board.
    In response to a steady decline in its membership, union bosses 
have increasingly relied on federal agencies to tilt the balance of 
power in their favor. The NLRB is at the center of this effort, 
promoting a culture of union favoritism that makes it virtually 
impossible for employers and workers to resist union pressure.
    Under President Obama's watch, the board has restricted access to 
the secret ballot, advanced an ambush election rule that will stifle 
employer free speech and cripple worker free choice, and begun to bless 
micro unions that will tie employers up in union red tape while 
undermining employee freedom in the workplace. The NLRB even went so 
far as to try and dictate where a private employer could and could not 
create jobs. I could go on and on.
    Additionally, there are cases before the board right now that 
threaten to further stack the deck in favor of the administration's 
union allies. For example, the board has requested feedback on how to 
determine joint-employer status under the National Labor Relations Act. 
A standard has been in place for 30 years to determine when two 
employers share immediate and direct control over essential terms and 
conditions of employment, such as hiring, firing, discipline, and 
supervision. This isn't a new concept, so the board's recent 
solicitation is highly suspect and strongly suggests it's eager to 
abandon existing policies in favor of a new standard more favorable to 
union interests.
    The board may also be looking for ways to give union organizers 
greater access to employer property, most notably employers' email 
systems. The board has always instructed employers that any policy 
limiting the use of work email must be enforced in a non-discriminatory 
way, which means employers cannot treat unions any differently than 
other non-charitable organizations. This provides employers a clear 
standard to follow and union organizers a level playing field to work 
on. It's likely the current board majority will seek to impose a 
fundamentally different approach, one that would give union organizers 
practically unfettered access to employers' email systems.
    On their own these may seem like relatively minor issues. However, 
they are part of a larger pattern that is generating a lot of 
uncertainty, confusion, and anxiety in workplaces across the country. 
Every member of this committee supports the right of workers to freely 
choose whether or not to join a union. It is ultimately a decision that 
rests with each and every individual worker; federal policymakers don't 
have the authority to make that choice for them. Today's hearing is 
part of the committee's continued oversight of the NLRB, but more 
importantly, part of our commitment to defending the rights of workers 
and employers.
    I look forward to learning more from our witnesses and our 
discussion later this morning. Before I conclude, I'd like to take a 
moment to recognize the new senior Democrat member of the subcommittee, 
Representative John Tierney. I know he is passionate and tireless 
advocate for working families. Even though we may not see eye to eye on 
a number of issues, I am confident we will find ways to disagree 
without being disagreeable. Congratulations on your appointment, 
Congressman Tierney. With that, I will now recognize Mr. Tierney for 
his opening remarks.
                                 ______
                                 
    Mr. Tierney. Thank you, Chairman Roe. And, yes, this I 
think will be a good exercise in comity as we try to work 
through these problems in a way that reflects civility and 
deals with the issues themselves.
    This is the first hearing that has occurred since I was 
elected to serve as ranking member. And so I want to begin my 
official statement by thanking Ranking Member Miller, the full 
committee, and my Democratic colleagues for entrusting me with 
this capacity to serve.
    You know, I have had the privilege of being on this 
subcommittee for a number of years, and I do it because the 
jurisdiction is so important, I think, to the issues that 
really impact the lives of workers, employers, retirees, 
middle-class families everywhere, and the things that really 
matter, the things they talk about around the kitchen table, 
ensuring that all Americans get a decent job that pays a fair 
wage, access to affordable, quality health care, retire with 
dignity, and perhaps a little change in their pocket. They are 
squarely in the subcommittee's jurisdiction, and that is what 
makes it so interesting and worth serving on.
    They are also priorities which I have fought for my career 
in Congress, and so I am honored to serve as ranking member and 
ready to take up the challenge. And I do want to thank you, 
Chairman Roe, for the courtesies that you and your staff have 
extended to my staff and to me. To date, we have been dealing a 
lot with the multi-employer pension crisis. I look forward to 
working on that rather complex issue as we go forward.
    Now, with respect to today's hearing, in the past 3-1/2 
years, the committee has held at least 16 hearings or markups 
on the National Labor Relations Board, and today we are doing 
it again.
    Now, it is my understanding that witnesses will discuss two 
cases. One is the Browning-Ferris case, where the board has 
asked for input on whether to update and modernize the joint 
employer standard. It is believed that the current standard may 
not reflect the reality of today's workplaces, so the board 
apparently has asked for the opinion of others so that they can 
consider that and determine whether or not it needs to be 
updated and modernized.
    The second case, Purple Communications, deals with the 
right of employees to use e-mail to communicate regarding 
organizing, bargaining, or forming a union.
    In neither of these cases did the board yet come to a 
decision on whether or not to change the standards as they are 
currently interpreted. In fact, in one of the witnesses' 
testimony, today it says, ``all indications are that workers 
and employees should expect that--is that the NLRB will decide 
these cases by carefully, applying established legal principles 
to the particular facts of each case, and that in so doing the 
board will attempt to provide legal guidance to workers and 
employers who encounter similar situations in the future.''
    Now, that is exactly what the board is charged with doing. 
The statute sets it up that way. So assuming that no one 
associated with this hearing would want to be perceived as 
attempting to chill the board members from actually doing their 
job or attempt to influence a decision that is under 
consideration, one has to wonder why we are having this hearing 
at all. It is a bit premature and, certainly, I think sort of 
tries to jump the gun in terms of what the NLRB itself may do 
in terms of coming to a decision on those issues.
    I look forward to the testimony. I trust we are going to be 
informed and led by the facts and not spend time undermining 
the efforts or the integrity of the board or mischaracterizing 
its decisions or maligning board members. That wouldn't be 
fair, nor would it be productive.
    I want to quote the witness again who says, ``There is no 
reason to think whatsoever that workers and employers would 
expect anything from the NLRB in deciding these cases other 
than a thoughtful, considered application of established 
principles to the particular facts of the case.''
    At the 16 hearings and markups, the subject of the NLRB has 
been covered pretty extensively, and I think that we ought 
perhaps wait until the board takes its action, gets all of the 
input that it wants, and with due deliberation decides.
    You know, there have been 9.4 million private-sector jobs 
that have been created since the recession, when we were losing 
800,000 jobs a month. Yet we don't continue to create as much 
jobs--or as many jobs as we should because we failed to pass a 
robust transportation bill, which would create hundreds of 
thousands of jobs. We failed to deal with an anemic research-
and-development aspect, which would create jobs. We are missing 
the opportunity to pass an energy policy that would expedite 
not only the creation of more jobs, but a policy that would 
move us away from the reliance on fossil fuels and some 
dangerous positions in the world.
    So I would think that any decision clarifying the law on 
what is being done in the labor relations field would be best 
left to the board that is charged with that. In the meantime, 
we have got a number of things that we could be doing. You 
know, we certainly have plenty of work to be done on 
modernizing all of these issues, and I would ask that we go 
through this hearing, we, say, keep it away, and let the board 
encourage the practice and procedure of collective bargaining 
and protect the exercise of workers of the full freedom of 
their association in the way the statute requires.
    Thank you, Mr. Chairman.
    [The statement of Mr. Tierney follows:]

    Prepared Statement of Hon. John F. Tierney, a Representative in 
                Congress from the State of Massachusetts

    Thank you, Chairman Roe.
    This is the first hearing that's occurred since I was elected to 
serve as Ranking Member of this Subcommittee - so, before beginning my 
official statement, I want to first thank Ranking Member Miller and my 
Democratic Committee colleagues for the support and confidence they've 
placed in me to serve in this capacity.
    I have had the privilege of serving on this Subcommittee for many 
years, and I do so because its jurisdiction is so important and impacts 
the lives of so many workers, employers, retirees, and middle-class 
families.
    I believe the things that really matter - ensuring all Americans 
can get a decent job that pays a fair wage, access affordable, quality 
healthcare, and retire with dignity and a little change in their pocket 
- are squarely in this Subcommittee's jurisdiction.
    They're also priorities which I've fought for my entire career in 
Congress, so I'm honored to now serve as Ranking Member of this 
Subcommittee and ready to take up this new challenge.
    Finally, I also want to thank Chairman Roe for the courtesy that he 
and his staff have extended me and mine to date - particularly on the 
multi-employer pensions crisis. I look forward to working with him on 
that complex issue and others in the weeks and months ahead. Thank you, 
Dr. Roe.
    Now with respect to today's hearing, in the past three and a half 
years, the Committee has held at least 16 hearings or mark-ups on the 
National Labor Relations Board, and today, we unfortunately are at it 
again.
    It's my understanding that witnesses will discuss two cases:
    In the Browning-Ferris case, the Board has asked for input on 
whether to update and modernize the ``joint-employer standard.'' It is 
believed that the current standard does not reflect the reality of 
today's workplaces. The second case, Purple Communications deals with 
the right of employees to use email to communicate regarding 
organizing, bargaining, or forming a union.
    The Board has not come yet to a decision to change either of these 
standards. It is simply asking for comments.
    In fact, according to one of the witness's testimony - and I am 
quoting here - ``All indications are that what workers and employers 
should expect is that NLRB will decide these cases by carefully 
applying established legal principles to the particular facts of each 
case and that, in so doing, the Board will attempt to provide legal 
guidance to workers and employers who encounter similar situations in 
the future.''
    Assuming that no one associated with the hearing would want to be 
perceived as attempting to ``chill'' NLRB Members from engaging in 
their job or attempt to influence a decision under consideration, one 
must wonder about the timing of this hearing and question its purpose.
    I look forward to hearing the testimony and trust we will be 
informed and led by the facts and not spend time undermining the 
efforts or integrity of the Board, mischaracterizing its decisions, or 
maligning Board Members. That's not fair or productive.
    Again, to quote one of the witness's testimony, ``there is no 
reason to think whatsoever that workers and employers should expect 
anything from the NLRB in deciding these cases other than a thoughtful, 
considered application of established principles to the particular 
facts of each case.''
    Mr. Chairman, after 16+ hearings and mark-ups, I think the subject 
of the NLRB has been covered.
    In the few months we have remaining this session, I hope this 
Subcommittee, the full Committee, and this Congress will turn its 
attention to what many of us would consider incredibly urgent 
priorities of the American people - raising the minimum wage, extending 
unemployment insurance for the millions who need it, stopping 
employment discrimination based on sexual discrimination, ensuring pay 
fairness for women, and providing relief for the tens of millions of 
students and parents with student loan debt.
    Again, I thank the Chair and yield back my time.
                                 ______
                                 
    Chairman Roe. I thank the gentleman for yielding.
    Pursuant to committee rule 7(c), all members will be 
permitted to submit written statements to be included in the 
permanent hearing record. Without objection, the hearing record 
will remain open for 14 days to allow such statements and other 
extraneous material referenced during the hearing to be 
submitted for the official hearing record.
    Now it is my pleasure to introduce our distinguished panel 
of witnesses. First, Mr. Andrew Puzder is the chief executive 
officer for CKE Restaurant Holdings in California. Welcome.
    Mr. Seth Borden is a partner of McKenna Long and Aldridge 
in New York, and Mr. Borden has represented management and 
labor in employment matters since 1998. Welcome, Mr. Borden.
    Mr. James Coppess is the associate general counsel for the 
AFL-CIO in Washington, D.C., and welcome, Mr. Coppess.
    And Mr. Roger King is counsel at the Jones Day law firm in 
Columbus, Ohio, and he represents management in matters arising 
under the National Labor Relations Act. And welcome again, Mr. 
King, to our committee.
    Before I recognize you to provide your testimony, let me 
briefly explain our lighting system. You have got five minutes 
to present your testimony. When you began, the light in front 
of you will turn green. When one minute is left, the light will 
turn yellow. And when your time is expired, the light will turn 
red. At that point, I will ask you to wrap up your remarks as 
best as you are able to, and after everyone has testified, each 
member will have five minutes to ask questions. And I will 
probably be a little more diligent with the members.
    And now I would like to now begin the testimony. Mr. 
Puzder, if you would open.

   STATEMENT OF MR. ANDREW F. PUZDER, CEO, CKE RESTAURANTS, 
                    CARPINTERIA, CALIFORNIA

    Mr. Puzder. Chairman Roe, Ranking Member Tierney, and 
members of the subcommittee, thank you for inviting me to 
testify on an issue of importance not only to our company, but 
to our nation's entire franchise community: the NLRB 
potentially adopting a new joint employer standard that would 
consider franchisors employers of their franchisee's employees. 
Such a standard would threaten the very successful franchisor-
franchisee relationship that has been generating jobs and 
economic growth for decades.
    I can't see the logic of the labor laws requiring or even 
permitting this. As I will explain, franchisors and their 
franchisees simply are not joint employers.
    My name is Andrew F. Puzder. I am CEO of CKE Restaurant 
Holdings, Inc., and it is an honor to be here. CKE owns and 
franchises nearly 3,500 restaurants in 42 states and 31 foreign 
countries under the Carl's Jr. and Hardee's brands. We employ 
over 22,000 Americans, and our 226 franchisees additionally 
employ about 50,000 Americans.
    We and our franchisees also spend hundreds of millions of 
dollars on capital projects, services, and supplies that create 
thousands of additional jobs and generate broader economic 
growth. And franchising's overall economic impact is greater 
still. As I cited in my written testimony, as of 2012, there 
were nearly 750,000 franchise establishments in the United 
States, employing about 8.1 million people with economic output 
of $769 billion, or roughly 3.4 percent of our nation's gross 
domestic product.
    And that is not all. One report estimated that in 2005, 
franchising's economic impact was to add 21 million jobs and 
$660.9 billion in payroll. That is 15.3 percent of all private-
sector jobs and 12.5 percent of all private-sector payrolls. 
And franchising's impact has only grown in the nine years since 
that report.
    The franchisor-franchisee relationship is built on a 
division of roles and responsibilities. The franchisor owns and 
licenses the brand, and the franchisee owns and operates one or 
more locations as a licensee. Businessmen and women from 
diverse financial and cultural backgrounds invest their time 
and money in franchisee businesses because the model works. 
Franchisors are contractually empowered to protect their 
brands, but those contractual provisions are limited.
    At CKE, we set standards that our franchisees need to meet 
to protect the integrity of our brands and ensure consistency 
throughout our system, but our franchisees run their 
businesses. With respect to employees, the franchisee 
independently choose the people they hire, the wages and 
benefits they pay, the training such employees undergo, the 
specific labor practices they utilize, the method by which 
those employees are monitored and evaluated, and the 
circumstances under which they are promoted, disciplined, or 
fired. As franchisors, we're not involved in those decisions.
    As with most franchisors, CKE receives a one-time-per-
restaurant fee, generally about 25,000, and a royalty, 
generally 4 percent of sales, to compensate us for the services 
we provide, for the use of our trademarks, and for protecting 
the value of those trademarks. CKE does not receive a share of 
the franchisee's profits.
    Franchisors such as CKE benefit from a percentage of each 
restaurant's top-line sales. Franchisees, on the other hand, 
benefit from their restaurant's bottom-line profits. Because 
they directly benefit from an efficient and well-managed staff, 
the franchisees assume the risks associated with having and 
managing employees.
    Making franchisors liable for their franchisees' employment 
decisions would force franchisors to exert control over such 
employment decisions. For example, franchisors would need to 
review hiring and compensation decisions. Franchisors would 
need to be present in the franchised restaurants more 
frequently to monitor the workplace, to dictate or even 
administer employee training, and to increase restaurant 
staffing, as the franchisor deemed necessary.
    Suddenly, franchisees would find themselves unable to 
independently run their businesses or to control their labor 
costs, a key controllable expense. The franchisors' royalties 
are contractual as part of a franchise agreement that generally 
has a 20-year term and was never intended to compensate for the 
cost of managing a franchisee's employees. To impose such risks 
and the associated costs on franchisors beyond their 
contractual obligations while depriving franchisees of the 
ability to control their labor costs would seriously threaten 
the viability of this very successful franchise business model.
    In closing, extending the joint employer standard to 
franchising would not further any purpose of the labor laws. 
Rather, it would unnecessarily require systemic changes in the 
franchisor-franchisee relationship, impairing the viability of 
this very successful business model that has created so many 
jobs and so much economic growth. Thank you.
    And I am happy to take questions.
    [The statement of Mr. Puzder follows:]
    
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    Chairman Roe. Thank you.
    Mr. Borden, you are recognized.

   STATEMENT OF MR. SETH H. BORDEN, PARTNER, MCKENNA LONG & 
                ALDRIDGE LLP, NEW YORK, NEW YORK

    Mr. Borden. Thank you.
    Good morning, Chairman Roe, Ranking Member Tierney--
congratulations--and distinguished members of the subcommittee, 
it is a great honor and privilege to appear before this 
subcommittee as a witness. My name is Seth Borden, and I am a 
partner in the New York office of the law firm McKenna Long and 
Aldridge.
    My testimony today should not be construed as legal advice 
as to any specific facts or circumstances. And I am not 
appearing today on behalf of any clients. My testimony is based 
on my own personal views and does not necessarily reflect those 
of McKenna Long or any of my individual colleagues there.
    I have been practicing traditional labor and employment law 
for 16 years. During that time, I have represented employers of 
all types and sizes in a variety of industries throughout the 
United States and Puerto Rico before the National Labor 
Relations Board.
    In 2010, I authored a chapter regarding new technologies 
and traditional labor law in the Thompson publication ``Think 
Before You Click: Strategies for Managing Social Media in the 
Workplace,'' the first treatise of its kind. And since 2008, my 
team and I have maintained the Labor Relations Today blog, 
which I am proud to say has received numerous accolades and has 
been archived by the United States Library of Congress. A copy 
of my firm bio is provided with the written version of my 
testimony.
    Mr. Chairman, I ask that the entirety of my written 
testimony, and the attachments thereto, be entered into the 
record of this hearing.
    My testimony this morning is presented within the context 
of this subcommittee's examination of a number of pending 
National Labor Relations Board cases where the board appears 
poised to reverse longstanding precedents. Most specifically, 
my testimony focuses on the Purple Communications case now 
before the board.
    The board has solicited amicus briefs in this case with an 
eye toward overruling longstanding board law and creating a new 
employee right to utilize employer equipment for union 
organizing and other Section 7 purposes. The board should 
decline to do so. There is simply no compelling reason for the 
board to depart from decades of precedent, most recently 
outlined in its 2007 Register Guard decision, which provides 
that absent evidence of discrimination, employees have no 
statutory right to use the employer's equipment for Section 7 
activity.
    First, this is an issue of employer property rights, not 
employee communication. Employers who invest their money in the 
purchase and maintenance of equipment and materials for the 
furtherance of their enterprise should be able to control the 
manner in which that equipment is used.
    Other longstanding principles of labor law protect the 
employees' rights to engage in communication, solicitation, and 
distribution of literature in furtherance of union organizing 
and other Section 7 activity, so long as that activity does not 
interfere with operations or other legitimate employer 
interests. The question in Purple is to what extent must an 
employer provide and pay for the means of employee 
communication and organizing.
    Second, the general counsel's assertion that e-mail is the 
modern day virtual water cooler is entirely misplaced. Employer 
computer networks and e-mail are not the 21st century water 
cooler; they are the 21st century production floor. The board 
has long protected legitimate employer interests, most 
significantly the means of production, without which there 
would be no employees.
    Insofar as employees have at their disposal a wide and 
growing range of alternative means of communication with each 
other, an employer should not be compelled to open its network 
to additional burdens on efficiency, external threats, and 
potential legal exposure occasioned by non-business use.
    Third, for decades the National Labor Relations Board has 
agreed that Section 7 provides employees with no such right to 
use employer equipment. This has been consistently true with 
respect to each new technological development or increasingly 
common type of workplace medium: bulletin boards, public 
address systems, telephones, televisions, VCRs, photocopiers, 
and most recently, e-mail systems.
    Over the course of several decades, these examples have 
changed, but the concept and the law has remained the same. 
There simply is no statutory right for employees to use them. 
If the board wishes now to create one, it would seem that the 
more measured and deliberative administrative rulemaking 
process or even statutory amendment by the legislature are far 
more appropriate avenues.
    Thank you, again, Mr. Chairman, and I will be happy to take 
any questions the subcommittee might have regarding my 
testimony.
    [The statement of Mr. Borden follows:]
    
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    Chairman Roe. Thank you very much.
    Mr. Coppess, you are recognized for five minutes.

STATEMENT OF MR. JAMES COPPESS, ASSOCIATE GENERAL COUNSEL, AFL-
                     CIO, WASHINGTON, D.C.

    Mr. Coppess. Okay. Thank you. Chairman Roe, Ranking Member 
Tierney, members of the subcommittee, the hearing today is 
focused on two cases in which the NLRB has called for amicus 
briefs, Purple Communications and Browning-Ferris Industries. 
It is not uncommon for the board to seek broader input from the 
general public when it sets about deciding particular cases. 
This is because the NLRB has chosen to elaborate the law under 
the NLRA by deciding particular cases, rather than engaging in 
rulemaking.
    And, if it weren't for such notices calling for amicus 
briefs from the public, there is basically no way to tell what 
particular issues are coming before the board. Too many cases 
come up. You would have to follow all of the particulars of the 
underlying decisions.
    One category of case in which this often happens is when 
reviewing courts have called upon the board to further explain 
what it is doing and some particular respect of interpreting 
the NLRA. Purple Communications is an instance of that case. 
The Seventh Circuit has a very long time ago now taken the 
board to task in its Guardian Industries case for its use of 
the word discrimination in deciding workplace communications 
cases. The Seventh Circuit suggested in that case that perhaps 
the board is using the term in a particular NLRA sense, which 
is, in fact, the case, and in the Register-Guard case, the 
board attempted to address the Seventh Circuit's concerns. That 
was the case involving e-mail communications at the workplace.
    Unfortunately, the board's attempt on Register-Guard 
failed. Its ruling that one application of the employer 
prohibition there did not constitute discrimination was 
overturned by the D.C. Circuit, and that leaves employers and 
workers with basically no guidance on what sort of employee 
communications in the workplace will be protected.
    I should emphasize that what we are talking about here is 
employee communication in the workplace and not union 
communication in the workplace. We are not talking about 
outsiders coming in. We are talking about people who are 
talking to each other at work being allowed to do so in the way 
they normally do.
    And I should say that we fully agree with Mr. Borden's 
point that where employers allow people to use e-mail, their 
work e-mail addresses, to communicate on matters that aren't 
strictly business related, the employer has no grounds for 
objecting to the employees communicating about Section 7 
protected activities. I fully expect that what the board will 
do in that case is answer the concerns of the Seventh Circuit 
and the D.C. Circuit and explain what sort of employee 
communications may be prohibited and what sorts may not with 
respect to e-mail.
    The Browning-Ferris Industries case represents another 
category of case in which the board will often call for amicus 
briefs from the public. Where it perceives the workplace 
practices have developed in a way that are not perhaps 
adequately addressed by the board's current application of the 
law, it--the Browning-Ferris case--is a textbook example of 
something we see increasingly frequently, where employers will 
subcontract out basically the employment function. Employees 
will be brought in to run the operation, essentially at the 
employer's--the ultimate employer, the owner of the 
facility's--direction, but they will be formally employed by a 
third party, and that makes it very hard to bargain because the 
third party that formally employs the workers doesn't 
ultimately control many of their terms of employment.
    All that is at issue in Browning-Ferris, I should add--or I 
should emphasize--is the duty to bargain and only insofar as 
both entities control terms and conditions of employment, there 
is absolutely no risk to the franchise arrangement, and in 
cases where the franchisor doesn't control the terms of 
employment, they won't even have a duty to bargain over that 
much, because there is nothing for them to bargain over.
    We think that these cases will be decided as they have been 
in the past when the board calls for broad input on the 
particular facts of the case, that the board will be applying 
long-established legal principles under the NLRA, and that in 
so doing it will clarify the application of those principles.
    I thank you for listening to my testimony and look forward 
to questions.
    [The statement of Mr. Coppess follows:]
    
    
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    Chairman Roe. Thank you very much.
    Mr. King, you are recognized for five minutes.

    STATEMENT OF MR. G. ROGER KING, OF COUNSEL, JONES DAY, 
                         COLUMBUS, OHIO

    Mr. King. Thank you, Mr. Chairman, Ranking Member Tierney, 
again, my congratulations, also, members of the subcommittee. 
My name is Roger King. I am of counsel with the Jones Day law 
firm, also the senior labor employment counsel for the Human 
Resource Policy Association.
    I want to talk about not only Purple Communications and the 
Browning-Ferris case, but the agenda of this National Labor 
Relations Board and its ever-present changing policy 
orientation, I submit to you that the board should consider, 
first, as its priority to address the pending cases it has 
before it.
    Based on checking with the NLRB Office of Executive 
Secretary yesterday, there are 383 cases pending decision of 
the board today. One of those cases has been pending for 2,582 
days. Mr. Chairman, that is over seven years. That is the 
Roundy's case.
    Before launching into what many of us at least from the 
employer community would submit is a very potentially 
unfriendly agenda, perhaps the board should address its present 
case backlog and get that order of business addressed.
    Second, as the committee is well aware, the Supreme Court 
has pending before it the case of Noel Canning. I happen to be 
one of the counsel on behalf of the company in that case. Based 
on our research, depending on what the court does--and it is 
very difficult, of course, ever to predict what the Supreme 
Court may do--but if the Supreme Court affirms in whole or in 
part the District of Columbia Circuit Court decision in Noel 
Canning, approximately 4,000 cases will be found to be void and 
will have to be addressed in some manner or another by the 
board and its general counsel. That is a substantial amount of 
business, particularly given the backlog that I just mentioned.
    Now, I want to comment about the suggestion of chilling the 
board. That is not the intent of my testimony. I have a very 
high regard for each and every one of the members of the 
National Labor Relations Board, a high regard for their 
integrity, and they are excellent practitioners of labor law. I 
know them personally. I also have very high regard for Richard 
Griffin, the general counsel of the board.
    That is not the question. The question is the policy 
orientation. And no matter how well intentioned the board 
members may be, at least the Democrat board members that are 
pursuing this agenda and its general counsel, it is a policy 
disagreement. It is an order of priority disagreement. They 
should, as I mentioned, reprioritize their business and address 
at least initially the cases they have before them.
    Now, I want to talk specifically about some of the 
initiatives just in the last few months this board has pursued. 
In spring of 2014, the board is again engaged in rulemaking to 
change the basic election procedure environment that has been 
in place for well over 30-plus years. There is no factual or 
legal predicate to do so, but yet that is being actively 
pursued again, I might add, after the board was initially 
stopped through judicial challenges with respect to that area.
    With respect to deferral of unfair labor practice charges 
in the arbitration arena, the board is again looking at that 
area without any factual or legal need to do so. It may be 
overturning over 59 years of precedent by that initiative. With 
respect to the issue of who is and who is not a managerial 
employee in a college or university setting, the board may be 
overturning years of precedent there, over 34 years of 
precedent in the Yeshiva case.
    With respect to Purple Communications, excellent testimony 
on that point, we have had seven years of stability of the law 
under Register-Guard. We have no need to go back and review 
that. With respect to the joint employer doctrine, we just 
cannot understand--at least from an employer perspective--why 
that issue is even being raised by the general counsel. If the 
board pursues a change in the law there, we overturn 30 years 
of precedent.
    With respect to Northwestern University and college 
football players, why the board is even in that area I think is 
a substantial legitimate policy question. But, if the board 
pursues to find those students--and we believe they are 
students--or those individuals to be employees, they will 
overturn at least 10 years of law going back to the Brown 
University case.
    So when you start to do the math, Mr. Chairman, we are 
looking in a very few short months that this board would be 
overturning well over 100 years of precedent. That doesn't even 
count the issue with respect to board procedure on elections.
    With respect to Noel Canning, of course, no one can predict 
how the court may decide. But we have 10 regional directors on 
this most recent recess appointee board that is being 
challenged where we believe are improperly approved. We have 
over 700, up to 1,000 cases that may come back just from that 
board, from 2012 to 2013. And we submit at least the board 
ought to wait until the Supreme Court makes a decision to 
determine what impact, if any, the Noel Canning case may have 
on its agenda.
    In summary, Mr. Chairman and Ranking Member Tierney, there 
is a policy issue here. The board has business to do. It should 
go about that business. If it pursues its current agenda, 
including its general counsel, we submit it is setting a 
precedent, a very poor policy precedent for future boards. Are 
we going to get a continual swing in the pendulum back and 
forth in board law, after more hearings, more judicial briefs, 
more court challenges, lack of predictability in the law? That 
is not what this country needs.
    Thank you very much. I will be happy to answer questions.
    [The statement of Mr. King follows:]
    
    
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    Chairman Roe. Thank you, Mr. King.
    Mr. Tierney, you are recognized for five minutes.
    Mr. Tierney. Thank you. First of all, I thank all the 
witnesses for their testimony. It was useful and helpful on 
that.
    Mr. Puzder, I want to ask you a question. I mean, you would 
agree with me that the board hasn't decided the two cases that 
we are talking about here today. Is that right?
    Mr. Puzder. Yes, sir.
    Mr. Tierney. Okay. So, again, you could hear yourself well, 
right?
    Mr. Puzder. I turned it off so I wouldn't hear myself 
during their--
    Mr. Tierney. So, you know, I am a little familiar with 
franchisor-franchisee relationships. You can help me out if I 
go astray here. But the question would be whether or not the 
franchisor has control or the ability to control or co-
determine terms and conditions of employment.
    Now, generally--and a lot of the franchises that I think 
people are familiar with--the franchisor has its own operation, 
you know, staff people, everything, and the franchisor has its 
own people working for it, whatever it is doing. And so in that 
situation, do franchisors generally hire people for the 
franchisee? Or does the franchisee?
    Mr. Puzder. The franchisee hires their own employees 
completely.
    Mr. Tierney. Same with firing?
    Mr. Puzder. Yes.
    Mr. Tierney. Same with disciplining them?
    Mr. Puzder. Yes.
    Mr. Tierney. Same with supervising them?
    Mr. Puzder. Yes.
    Mr. Tierney. And giving them direction?
    Mr. Puzder. Absolutely.
    Mr. Tierney. So there is no occasion--or generally no 
occasion--where the franchisors are directly or immediately 
doing any of those things.
    Mr. Puzder. Correct.
    Mr. Tierney. Okay. So what--I mean, you don't claim some 
foresight or whatever what this board is going to do once it 
gets all the input and deliberates on this case, do you?
    Mr. Puzder. No, there is industry concern that the board 
may not completely understand the franchising model, so I think 
I was invited to testify to clarify that model.
    Mr. Tierney. So you have five lawyers that Mr. King says--
or five people that Mr. King says are very, very knowledgeable 
in the law, but your organization doesn't think they know about 
franchises?
    Mr. Puzder. No, I am sorry, we do know about franchising 
very well.
    Mr. Tierney. No, no, you don't think they know about 
franchising, the board. You are concerned that they won't be 
able to grasp the heavy issue of franchisor-franchisee 
relationships?
    Mr. Puzder. No, I am sure they could grasp it. I think the 
idea is to make sure that the evidence or the testimony or the 
facts are before them, and I believe that is why I was invited 
to testify. Obviously, I didn't invite myself, but I believe 
that is why I was invited.
    Mr. Tierney. You are invited to tell us what you would like 
the board to hear?
    Mr. Puzder. Yes.
    Mr. Tierney. Interesting. So have you shared this with the 
board? Are you going to file an amicus brief or--
    Mr. Puzder. We would be happy to do so. I believe the 
associations that we're involved with will file amicus briefs 
and will be helpful in that respect.
    Mr. Tierney. Okay. Yes, I mean, I am just a little baffled 
to what we pretend to do at this hearing. I think that your 
position should be heard by the board. I suspect that they will 
and that they are quite confident and capable of taking it 
under consideration and giving it whatever weight that they 
think it should have on that part.
    So I appreciate your concern. You know, I just--I don't 
know that it is going to be problem for you. As I look at it, 
with--as I say, the sum knowledge that I have of franchisor-
franchisee, you know, it looks like you may be, you know 
foisting your shadows there a little bit on that, until you 
know what the board is doing or have some inclination of them 
going in the wrong direction.
    Mr. Puzder. Well, it is good to hear that, and it was good 
to hear from Mr. Coppess that we had no risk, so that was--just 
coming to the hearing, that made it worthwhile.
    Mr. Tierney. The risk that you have is that the board may 
disagree with you, and then that is the risk that Mr. King 
takes. I mean, he has very clearly said he believes in policy 
and, you know, the board may disagree with you. There are 
occasions when past boards have disagreed with policies that 
other people sought with and Mr. King wasn't in here 
complaining then. He was in there thinking boy, they are 
geniuses and they are really going in the right track.
    So, I mean, I just don't know, you know, that this is the 
appropriate forum to listen to how a board may make a decision 
in the future after it gets input from amicus and other sources 
on that. I mean, we are always going to have some distinctions 
or disagreements on the way that they interpret the law or its 
application on that. And I think that all of you have stated 
the considerations out there pretty well. I just haven't heard 
any evidence that indicates to me that there is any reason to 
believe that this board won't be fair-minded and won't try to 
do the best that it can do under its abilities to make a 
decision that it believes is correct and reflective of the law 
on that.
    So I hear, you know, Mr. King's concern about the--a number 
of cases that are pending on that. And I think that the Noel 
Canning case may seriously impact that, in which case we are 
all going to be concerned about that. But I don't think that 
necessarily warrants the board abdicating its responsibility to 
make a determination of how it properly applies the law in 
Browning-Ferris or in the Purple case on that basis.
    So I think that is going to be it. And other than that, I 
suspect that listening to all you gentlemen has been 
interesting. I suspect the board will hear the same thing, and 
I trust that they will do their job. Thank you.
    Chairman Roe. Thank the gentleman for yielding.
    Now, Mr. Wilson, you are recognized.
    Mr. Wilson. Thank you, Mr. Chairman. Thank you so much.
    This title, ``What To Expect Next from the National Labor 
Relations Board,'' has real meaning to the people of my home 
state of South Carolina, because I think that we are the prime 
example of abuse by the NLRB, which has made every effort to 
destroy jobs and destroy opportunity for the people in my 
state.
    Three years ago, Boeing had completed a 1.1 million square 
foot building. There were 1,000 people employed. And out of the 
blue, the NLRB dictated it could not produce 787 jetliners. I 
mean, incredible. Think of this.
    This was clearly due to the influence of the unions. They 
had placed $400 million into the President's campaign, and a 
response was to block the ability of Boeing to operate in our 
state. South Carolina is a right-to-work state. Workers have 
the right to freely choose whether to be part of a union or 
not. And they have chosen not to be part of a union.
    South Carolina has fought back. I am very grateful that 
with the leadership of Governor Nikki Haley and the attorney 
general, Alan Wilson, that we fought back. Lawsuits were filed. 
It is very significant. We have the youngest attorney general 
and the youngest governor in the state of South Carolina. I am 
also proud we also have the first female governor in 340 years. 
They fought back.
    Our delegation fought with them, and I am very grateful for 
the leadership of now Senator Tim Scott, Senator Lindsey 
Graham, myself, the very famous Trey Gowdy. Everyone fought 
back, and we were successful.
    Now there are 7,000 jobs at the Boeing facility in 
Charleston. It is very important to me, because the suppliers 
are across the state. The Zeus Corporation of Orangeburg and 
Akin produced the tubing. The cables are produced by Prysmian 
of Lexington. Thermal Engineering of Columbia provides painting 
experts. AGY of Akin produces interiors. Bose in Blythewood 
produces the communications. Over and over again, thousands of 
jobs across our state, despite the NLRB.
    Now, today I want to thank all of you for being here, 
particularly Mr. Puzder. I am a Hardee's biscuit 'n' gravy 
customer.
    Mr. Puzder. All right.
    [Laughter.]
    Mr. Wilson. And I want to thank you for the--and, hey, I 
love going by. The people working there, it just warms my heart 
to see people so enthusiastic, so positive, with good jobs. 
Does the franchisee or the franchisor hire, fire, discipline, 
supervise, and direct employees at a franchise store.
    Mr. Puzder. We do not.
    Mr. Wilson. Wow. And what standards does the franchisor 
set? Why does the franchisor set any standards?
    Mr. Puzder. We set standards that basically relate to 
protecting the trademark so that it is not abused, which 
protects also the franchisees who pay a fee to use that 
treatment, and for consistency. You want consistency in the 
food. You go to Hardee's, you want a biscuit to be a biscuit in 
every Hardee's you go to. Just like McDonald's or Burger King, 
you want a Whopper to be a Whopper no matter what store you are 
in.
    But beyond consistency and protecting the trademark, the 
matters relating to employee discipline or hiring policies are 
all in the hands of the franchisees.
    Mr. Wilson. Well, you do a great job.
    Mr. Puzder. Thank you very much.
    Mr. Wilson. And, Mr. King, in the event the Supreme Court 
holds that the January 2012; recess appointments to the NLRB 
are unconstitutional, what will come of the thousands of 
decisions issued by the board?
    Mr. King. Excellent question. Up to 4,000 could come back. 
That is just over the last 20 years of board decisions. They 
would be void. The board would have to consider them anew. We 
also have, Congressman Wilson, appointments to regional 
director positions throughout the country by allegedly quorum-
less boards. All the activities, actions, or decisions of those 
regional directors may be void. And we would also have 
delegations of authority from quorum-less boards, at least 
allegedly, to the general counsel of the board, enforcement 
actions that may be set aside. So the potential would be an 
overwhelming litigation burden and reprocessing of case burden 
on the board and its general counsel.
    Mr. Wilson. And could the cases all be determined en banc? 
Or could it--would the--would citizens have an individual right 
to represent their case?
    Mr. King. Congressman, each and every case would have to be 
reconsidered. I know of no legal precedent that would permit 
the board to en banc, if you will, ratify or consider on whole 
all of the cases. They have their own individual facts, 
applicable law, and we do have some precedent, after the 
Supreme Court handed down its decision, a new process, still 
there about 100 cases of a potential 500 that had to be 
reconsidered, because the board had only operated with two 
members. The Supreme Court said, no, you had to have three.
    So when those cases came back, it took the board over 3-1/2 
years--and this is in my testimony--to process just that 
backlog of 100 cases. So if you look at 4,000 cases, we have no 
idea how long it would take for the board to process them.
    Mr. Wilson. Thank you very much.
    Chairman Roe. I think the gentleman failed to mention that 
the attorney general in South Carolina is his son.
    [Laughter.]
    Mr. Pocan, you are recognized for five minutes.
    Mr. Pocan. Thank you, Mr. Chairman. And thank you to our 
witnesses.
    I am relatively new to the committee and brand-new to the 
subcommittee. So I guess maybe I am a little surprised that 
this is our 16th time that this committee has been addressing 
the NLRB, when I thought, you know, perhaps when I get on the 
committee we would be talking about things like raising the 
minimum wage, making sure we had pay equity, dealing with other 
workplace protections, issues like ENDA, and then making sure 
that, I guess, NLRB was actually improving access for workers, 
because I know things like minimum wage in my district, I have 
59,000 people who would actually benefit from raising the 
minimum wage to $10.10. I think the gentleman who just spoke 
from South Carolina has about 50,000 people in his district 
that would benefit if we were doing that.
    But I understand this is before us, so let me try to talk 
about this and from my background. I have been a small-business 
owner for 27 years, as of last month. I also have a union shop, 
so I kind of straddle both worlds, a union shop by choice, but 
a specialty printing business.
    And one of the things I have seen a real trend in is 
specifically that employers are starting to use these outside 
entities, these third-party employers to hire workers, which 
seems to be getting around the law, right? It seems to make it 
harder for people to be able to organize in some of these 
situations, and I think what we saw with the Browning-Ferris 
Industries case specifically is exactly the problem that is 
happening more and more and why if the NLRB is going to try to 
address something, they might want to specifically look at 
this.
    So, Mr. Coppess, I guess I have a couple questions to start 
with you. Specifically about--you know, if a parent employer 
doesn't determine the pay for an employee, how could that 
parent company effectively determine the conditions of 
employment for a subcontractor's employee, with this third-
party relationship?
    Mr. Coppess. You mean the entity owner, Browning-Ferris?
    Mr. Pocan. Yes.
    Mr. Coppess. Well, --if they exercise sufficient control 
over the terms and conditions of the direct employer, they 
would--in Browning-Ferris, they just dictated what wages, for 
instance, that wages couldn't come over a certain level. They 
controlled the speed of the line. They controlled the position 
of the employees on the line. They controlled what equipment 
they were using. All of those things are important conditions 
of employment that the direct employer wouldn't be able to 
bargain over.
    The joint employer bargaining obligation is just simply 
limited--to the overall employer bargaining over what it 
controls. They both have to come to the table or, in fact, they 
don't both have to come to the table. The employer that owns 
the facility could authorize the direct employer to reach 
agreement on those matters and they would then just be jointly 
bound by that. But it is only the matters they control that 
they are required to bargain over.
    Mr. Pocan. Right. So if we broadened the joint employer 
standard, if the NLRB did, how would that help workers engage 
in a more meaningful bargaining process?
    Mr. Coppess. Well, it is basically impossible to engage in 
effective bargaining if someone who is not at the table 
controls the terms. That is why going into a car dealer shop 
and bargaining with the direct salesman and he goes back to the 
manager, you don't--you don't really start bargaining until the 
manager is at the table.
    Mr. Pocan. That is a visual memory of that.
    Mr. Coppess. Unfortunately, for me, too.
    Mr. Pocan. Yes, thank you. If I can, Mr.--is it Puzder or 
Puzder? I am sorry.
    Mr. Puzder. Puzder.
    Mr. Pocan. Puzder. Since you are here--and I happen to 
agree with you. I don't think--I looked at a franchise when I 
first opened the business, decided it wasn't the best route for 
me personally, but I don't see--I would be surprised if the 
NLRB went to the extent that you are talking about.
    However, since you are here, can I just ask you, what is 
the average pay for a Hardee's employee, a new employee coming 
in to start?
    Mr. Puzder. I don't know what Hardee's is. I think it is in 
my brief the average restaurant level employee makes about $9 
an hour. I think it is $8.96, if I recall.
    Mr. Pocan. Okay. But you don't actually--the Hardee's--
    Mr. Puzder. I wouldn't break--I can't break Hardee's out 
from Carl's. I don't know it. I mean, I know--I mean, we run 
Carl's and Hardee's as one brand with two names. For us, it is 
really just one company.
    Mr. Pocan. Got you. And do you know--and, again, I am not 
sure if this is in the brief, but, if you can separate it 
either together or separate, how many of the Hardee's and 
Carl's Jr.'s employees use food stamps or Medicaid?
    Mr. Puzder. I don't know that. I know that of the 22,000 
employees we have over the age of 21, so taking out 16-to 19-
year-old college and high school students, about 5 percent of 
our employees make minimum wage. And, you know, obviously, a 
high percentage of those are part-time. So I don't know how 
many get food stamps. I don't know how we would know that.
    Mr. Pocan. And I appreciate that. I just think, as we talk 
about this issue, you know, you just mentioned 22,000 people 
who potentially would also benefit from the minimum wage 
increasing to $10.10, as well as the taxpayers in the 
jurisdictions that currently are subsidizing many of those 
folks--
    Mr. Puzder. They would benefit if the price of everything 
didn't go up. But, of course, as soon as you raise the minimum 
wage, everybody who has minimum wage employees--plus, there is 
sort of a tide lifts all boats impact. Higher--
    Mr. Pocan. You will get additional business, yes. Okay.
    Mr. Puzder. So your labor costs go up, and when labor costs 
go up, you either automate or you increase your prices to cover 
the labor cost increase, which, of course, is why we are 
talking about increasing the minimum wage when we just 
increased it 5 years ago, because you--you know, you will 
always increase your costs to cover increased expenses, whether 
it is food costs, occupancy costs, or labor.
    Mr. Pocan. I think a lot of people would say--
    Chairman Roe. Gentleman's time is expired.
    Mr. Kelly, you are recognized for five minutes.
    Mr. Kelly. Thank the Chairman.
    Being an automobile dealer, I don't share the same feelings 
you have about going to negotiate a price.
    [Laughter.]
    And I would look at the effect on the general economy when 
our automobile business is running the right way. It affects 
everybody, including the people who build them. So I don't want 
to get too far out of whack here about who controls what, but I 
am very interested in what we are looking at right now today, 
and we are talking about an NLRB that continues to get involved 
in things.
    And if we are trying to get this country back on its feet 
again, if we are really trying to get our economy back up and 
moving, if we are trying to take advantage of all the assets we 
have, then you have got to sit back and wonder, so why is this 
group looking--and, Mr. King, you made reference--how many 
years of precedent are we looking at now? How many--are we 
going to go back and look at how many?
    Mr. King. Just in the last few months, Congressman, this 
board is proposing in its general counsel to consider changing 
over 100 years--maybe up to 130 years of precedent in addition 
to changing over 30 or 40 years of established procedure and 
protocol on how the board runs elections without any 
justification at least that I can determine or others can 
determine.
    Mr. Kelly. Yes, well, we have that--not just with the NLRB, 
but with a lot of other things that we are looking at are 
changing here very rapidly. Let me ask you this. There is a 
cost involved in both time and money to go back and do this. 
Can you peg it at all as to what that would be?
    Mr. King. I don't have a way of calculating it, per se, but 
the board, like every federal agency, Congressman, comes to 
this body and asks for resources. If these resources are being 
diverted to these policy efforts and not, as I mentioned, to 
addressing their current case load, which is approximately 383, 
one wonders about the priority of the board.
    In the Browning-Ferris case that has been discussed here, 
why is this case even being considered? We went back and looked 
at the facts, Congressman. The subcontractor here, LeadPoint, 
has its own human resources department, employs no less than 17 
supervisors and lead men to oversee the work at the site, 
Browning-Ferris site, maintains its own payroll, was 
responsible solely for hiring, discipline and discharge, and 
has separate business entity locations at other Browning-Ferris 
operations.
    Why is this case even being considered? Back to your 
resource question. We don't know.
    Mr. Kelly. Okay, but my question is also going to be--so 
all of these decisions, they are going to be reviewed again. My 
assumption is going to be, somebody is going to have to engage 
counsel, legal counsel. And so monies that they would have 
spent on other things, right now--when you talk, again--I am 
going back to the economy. We are trying to get people back to 
work. We are using very valuable revenue and assets that we 
have to go back and look at things that have already been 
established and, as you say, for 100 years and in some cases 
now we are going to go back on 40 years.
    And my question is, so why now? What is the purpose in 
doing this? If we are really trying to help the economy to 
recover, why would we put this weight on their back? And I am 
talking about employers right now.
    The other thing that is happening--and I think--because of 
what you do in your business, I have got to tell you, General 
Motors does not tell me how to hire people, how to fire people, 
what our policies are, nothing. Now, neither does Hyundai, nor 
Kia, okay? I am an independent businessman. I rise and fall 
each month on the efforts of our total collective group and how 
they perform in the marketplace in a highly competitive 
marketplace.
    So it is really important that we can kind of run our 
business without having--being run into the ground by a 
continuous government regulations that keep us from doing what 
we do. We sell cars and trucks. We service cars and trucks. But 
when you have to stop to go through these exercises in 
futility, that takes your eye off the ball.
    In your business, especially--and I have got to tell you, 
being an employer for many, many years, you know the greatest 
relationship we have is between the people that work with us 
every day to serve our customer base and management. I have 
been to weddings and funerals and baptisms and--you name it, I 
have been there. There is a great relationship.
    But that relationship is now being destroyed and picked 
apart by a government that continues to pit employer against 
employee, owner and operator against associate and puts one 
group as these are bad people who are taking advantage of you. 
Nothing could be further from the truth. We have destroyed the 
regular work week, and we continue to put a heavy burden on 
people who actually are trying to rebuild the economy.
    In your business, it has got to be overwhelming what you go 
through with employees and you bring it--by the way, these are 
not permanent jobs. These are starting-level jobs. I have so 
many friends that started off in McDonalds or a Burger King or 
a Hardee's and now they are managing them or have their own 
stores, so let's not be confused about what these jobs are. It 
allows people to grow.
    The numbers that you talked about in the turnover, if you 
could, because I don't believe--something we get caught up in 
this living wage. I believe it is a starting wage that allows 
you to build your own life.
    Mr. Puzder. Well, for me, I started out at minimum wage, 
which I think at the time was like $1.25 an hour scooping ice 
cream at a Baskin-Robbins. It never occurred to me that would 
be a job for which I should have a living wage or support a 
family of four, nor is it a job that would engender somebody 
supporting a family of four.
    So we do have starting-level positions in our company. If 
you--our turnover at the restaurants, by the way, is about 100 
percent a year. I mean, people come in and out. We support them 
getting educations. We encourage them to get an education. We 
help them through the process. We actually have tuition 
reimbursement while we reimburse employees that have been with 
our company over a year, up to $10,000 worth of tuition and 
books.
    So we encourage people to move on in life. And then there 
are people in the restaurants who stay and enter the management 
stream, become general managers, district managers, regional 
managers. The guys who run Hardee's and the guy who runs Carl's 
Jr. started out as minimum wage employees working behind the 
counter and now are running businesses that do many tens of 
millions, if not hundreds of millions of--in EBITDA a year.
    So it is--they are entry-level jobs. They are the way that 
you can get on the ladder. And I think the CBO came out 
recently and said that 500--
    Chairman Roe. Would you wrap up your testimony, Mr. Puzder? 
We are over time.
    Mr. Puzder. --wouldn't be created.
    Mr. Kelly. Well, thanks for relating the American history 
and American story. This is impossible any place else in the 
world and sometimes we forget it.
    Chairman Roe. The gentleman's time is expired.
    Mr. Kelly. Thank you, sir.
    Chairman Roe. Mr. Scott, you are recognized.
    Mr. Scott. Thank you, Mr. Chairman.
    Mr. Chairman, the gentleman from Pennsylvania in his 
district has, as I understand it, 62,000 of his hard-working 
constituents--67,000 of my constituents would receive a pay 
raise if we increased the minimum wage to $10.10 per hour. That 
is in addition to the tens of thousands of others who would 
benefit from the rising all tides effect where they are close 
to the minimum wage now, would get a raise in addition to that.
    Mr. King, you mentioned the problem with the recess 
appointments. There are two questions involved in that case, 
one, whether they were intra-session appointments and--I guess 
the fundamental question, was the Senate in recess at all? If 
they decide that they are intra-session appointments, --if that 
part of the case is sustained, it is my understanding that 329 
intra-session appointments have been made since 1991 and 
President Obama's 29 is the lowest since Ronald Reagan--would 
all of those decisions way back then have to be reviewed on all 
the different agencies in the NLRB?
    Mr. King. Potentially, Congressman Scott, yes. You are 
correct. There are actually three questions pending before the 
court, and the third one you alluded to is the pro forma 
session question. But depending on how the court rules, if it 
affirms in whole or in part the D.C. Circuit Court of Appeals 
opinion, certainly the appointments that you mentioned would be 
called into question by both Democrat and Republican 
presidents. You are correct.
    Mr. Scott. And that would go back to 1981?
    Mr. King. At least, if not further.
    Mr. Scott. Mr. Coppess, in the question of the e-mails, is 
there any question whether or not the employer has the right to 
restrict the use of e-mails? If they restrict e-mail use only 
to official business connected concerns, no personal use for 
any reason, is that--does an employer have the right to do 
that?
    Mr. Coppess. Yes, they have a right under the NLRA to do 
that. The problem comes, as everybody who has ever used a work 
e-mail knows, that it is practically impossible to do that. And 
any employer that were to actually try to do it would so annoy 
the employees that it would be at a great cost.
    When the board last considered this issue in Register-
Guard, there was interesting testimony from a witness who had 
been studying e-mail in general. And what he remarked on was 
that in the early days of workplace e-mail, employers often 
adopted rules that said no personal use. And they quickly 
discovered those rules could never be enforced, so they--by the 
time of the Register-Guard hearing, this witness said over 90 
percent of employers formally permitted non-business use of e-
mail, and, of course, that has been all of our experience, that 
personal use is, in fact, permitted.
    Mr. Scott. So once they allow personal use, can they 
legally then excise out NLRA-related communications?
    Mr. Coppess. No, I think all of us agree on that. Mr. 
Borden's testimony is to that effect. That is my understanding 
of the law. They can't engage in content-based restrictions on 
NLRA-protected employee communications.
    Mr. King. Pardon for interruption, I want to go on record, 
I do not agree with that last statement.
    Mr. Coppess. Okay. I mean--
    Mr. King. I have a considerable high regard for Mr. 
Coppess. He is an excellent lawyer. But on that point, we do 
not agree.
    Mr. Coppess. I am sorry. I didn't mean to speak for Mr. 
King. I didn't realize it was at all controversial.
    Mr. Scott. Mr. Coppess, can you talk a little bit more 
about what the complication is when--we talked about the 
outside agencies supplying employers in a franchise situation. 
Is it different in situations that are not franchise 
situations?
    Mr. Coppess. Well, the operation at issue in Browning-
Ferris is that the opposite removed from the franchise 
situation we have had described to, as there the employer--the 
jobs at issue in that case are very simple jobs. People stand 
along the line at assigned spaces, Browning-Ferris assigns them 
the spaces. They are fed trash along a conveyor belt that is 
run by Browning-Ferris, the speed of which is controlled by 
Browning-Ferris, and they sort trash.
    Everything in the plant is controlled by Browning-Ferris. 
Certainly, the subcontractor has line supervisors telling 
people, yes, you continue to stand there, continue to sort the 
trash as it comes to you, but there is no much also to the job 
other than what they--the enterprise owner controls. So it is 
at the opposite remove from what we are hearing about the 
franchise situation.
    And I would like to add that it is a really good example of 
why the board calls for amicus briefs. So here they are 
deciding a case that has nothing to do with franchises. And the 
franchise operations will have the opportunity to come in and 
say this may look like an easy case, but here are some things 
you ought to keep in mind so when you speak, you maybe don't 
get into trouble you don't want to get into. You know, telling 
them about it is the thing to do. They are deciding the case, 
and they have asked to hear.
    Mr. King. On that point, Mr. Coppess--
    Chairman Roe. I think the gentleman's time has expired.
    Mr. Byrne, you are recognized for five minutes.
    Mr. Byrne. Thank you, Mr. Chairman.
    And, gentlemen, appreciate your being here today. I took 
labor law 35 years ago this year and spent the vast majority of 
my career representing people before the board and handling a 
lot of issues like this. I appreciate the level of 
professionalism I am hearing coming from the witnesses today.
    I have got to agree with Mr. King. Maybe it is my age and 
having dealt with this for a long time, but we have got decades 
of precedent that are literally being overturned or at least 
being considered to be overturned by this labor board. And I 
think it is extremely appropriate that this committee take this 
up at this point in time both because of our policymaking 
function, Mr. Chairman, but also I think Mr. King raised a very 
important point, and that is the role that the Congress plays 
in appropriating money to federal agencies that spend money on 
doing things when they need to be taking care of business where 
they have a backlog.
    And if you have ever had a backlog for a client with the 
National Labor Relations Board, it is hard to explain to your 
client why that board can't get to their case, and it would be 
particularly so if they are trying to launch out in new policy 
areas, which brings me to Mr. Borden's testimony.
    When I first started, Mr. Borden, the big thing was 
bulletin boards. We didn't have e-mails. And I remember telling 
client after client after client, don't let your employees use 
the bulletin board to advertise for a yard sale or their kids' 
Little League game or anything like that. And so we said that 
for years.
    Then with these newfangled things called e-mails came 
along, and I may have read your treatise when I told my clients 
to do this, don't let your employees use the e-mail system at 
the office for anything other than business matters. And I am 
probably like thousands of labor lawyers that told their 
employer clients that.
    And now to find that the labor board is considering making 
e-mails opened up for employees to use to make advocacy one way 
or the other on unionization really surprises me, and this 
idea, Mr. Coppess, that these employees are doing this on their 
own is ridiculous. They are being directed by the labor unions 
that they are in concert with. Yes, sir, they are. It is a 
concerted effort.
    And what we would have in that circumstance is this very 
difficult situation within the workplace, where it interferes 
with workplace communications about the things that have to 
happen at the work. I think it is very troubling for the 
productivity for the American economy.
    But I do have a question. I was listening to Mr. Coppess's 
statement. You said there is no reason whatsoever that workers 
and employers should expect anything from the NLRB in deciding 
these cases other than a thoughtful, considered application of 
established principles, established principles to the 
particular facts of each case.
    Mr. King, admittedly, this is mostly a new board. However, 
is this statement considered--consistent with what we have seen 
from the Obama Administration's NLRB? Was this true in the 
specialty health care case?
    Mr. King. No, sir, it was not. In all due respect to the 
board members and its general counsel, we have not seen from an 
employer perspective a fair and even-handed approach to the 
facts and the law that it applies to the facts. Back to your 
point, the precedent that I am talking about, over 100 years of 
precedent, that was established by both Democrat and Republican 
boards. This should not be a partisan issue.
    Specialty Healthcare case overturned on its head the way 
the board goes about determining who is appropriate to vote in 
an election. We have a regional director of the board applying 
Specialty Healthcare in the Bergdorf Goodman case where the 
regional director found that women shoe department employees on 
noncontiguous floors of that department store constituted an 
appropriate voting unit.
    If you take the average retail department store and apply 
that, quote--``reasoning,'' which is highly suspect, I would 
submit, you could have 30 or 40 different bargaining units in 
that store alone. I mean, what is next, the men's bowtie 
department?
    Mr. Byrne. Well, whether it is pro-management or pro-
employee, they are not following established principles. I 
mean, we have all practices--we win or lose with the principles 
we have had. We have had an equilibrium before the board, 
practitioners have and parties have had, for decades. And the 
point is that they are not following established principles. 
They have decided to go off and create new principles. And that 
undermines the equilibrium we have had for years. Isn't that 
the case, Mr. King?
    Mr. King. That is certainly my position. And back to your 
colleague's question about interfering in the workplace, this 
board in over 100 decisions has gotten into the issue of 
employer policy statements, employer handbooks, the minutiae, 
every paragraph, every sentence, even punctuation marks, now 
are under scrutiny because they may somehow chill employees' 
rights. Is that a good use of the board's resources? I submit 
not.
    Chairman Roe. Gentleman's time is expired.
    Ms. Bonamici, you are recognized for five minutes.
    Ms. Bonamici. Thank you very much, Mr. Chairman. And thank 
you to the witnesses for testifying today. Like Mr. Pocan from 
Wisconsin, I am also fairly new to this subcommittee, and when 
I joined, I was pretty enthusiastic about having the 
opportunity to discuss workers' rights.
    I certainly know from watching what has happened over 
history how important the labor movement has been in getting 
the rights to organize and collectively bargain for 
generations. It is really unfortunate that we spend a lot of 
time here talking about what looks like attempts to minimize 
the importance of the NLRB. I am concerned about that.
    Yesterday, I had the opportunity to attend the White House 
Summit on Working Families, which was a great opportunity to 
listen to not only working people from across the country, but 
also business owners who share their stories about how family-
friendly policies actually help with attracting and retaining 
good workers. That was a great discussion. I wish that is the 
discussion we were having today.
    Some of the things that we talked about at the summit--
equal pay for equal work, raising the minimum wage--are areas 
where--I know the labor movement has long been a leader in 
those areas.
    I am from a state where the voters in Oregon years ago 
raised the minimum wage by initiatives. And it is linked to the 
CPI, so it automatically adjusts. It is one of the higher 
minimum wages in the country. It has actually been good for 
Oregon. I have about 43,000 constituents in my district who 
could actually benefit from raising the minimum wage to $10.10 
an hour under the Fair Minimum Wage Act. And I know now there 
are many businesses talking about doing this because--to have a 
national standard would be great for the country and also for 
the states that have lower minimum wages.
    I know the gentleman from Alabama who just spoke. I also 
took labor law in law school many years ago. I am not going to 
say how many. You have about 54,000 people in your district who 
would benefit from raising the minimum wage.
    Interestingly, I did not, like you, go into practicing 
labor law. When I was in private practice, before I discovered 
that my kids were more fun than lawyers, I had a practice in 
franchise law and I represented franchisees. So it has been an 
interesting discussion listening to Mr. Puzder.
    And I certainly see, as Mr. Pocan did, the distinction 
between subcontracted employees and employees of franchisees. 
Big distinction there. But I appreciate the comment that was 
made about this is why the court asks for briefing.
    So I wanted to ask, Mr. Coppess, in your testimony, you 
talk about how the NLRB will decide these two cases--and we are 
really predicting what the court might do and talking about 
that--by carefully applying established legal principles to the 
particular facts of each case. And in doing so, the board will 
attempt to provide legal guidance to workers and employers who 
encounter similar situations in the future. And I appreciate 
that statement.
    And when I came in, I couldn't listen to your testimony 
because I was in a markup in another committee, but I did read 
your testimony. And I heard Mr. King talking about his 
contemplation about what might happen with regard to the Noel 
Canning opinion, if the Supreme Court does uphold the D.C. 
Circuit. Mr. Coppess, what is your thought on that? What is 
going to happen if the Supreme Court does uphold the D.C. 
Circuit? What do you see happening logistically?
    Mr. Coppess. Well, we know actually with a fair degree of 
certainty what will happen for the NLRB, because they have been 
through it before. The ruling for the NLRB will simply be 
whatever actions the board took within the period covered were 
taken without a quorum. That was the precise issue in New 
Process Steel.
    The issue for the rest of the government is mammoth. I 
mean, it could eliminate the recess appointment authority as a 
practical matter, it could invalidate decisions of other 
agencies made by other appointees who aren't used to it the way 
the board is, so there could be far-reaching ramifications of 
that decision, but not for the NLRB. The NLRB has been through 
it before, has practice, unfortunately. It can grind out the 
cases again.
    But that part of it we know what is going to happen, 
because we have been through it once before.
    Ms. Bonamici. Right. Well, I know we are all eagerly 
waiting for that opinion. And the Supreme Court did not--and I 
think it is common sense--that it is a different world now than 
it was at the framing of the Constitution. And we fly back and 
forth from the West Coast on a regular basis. And, you know, 
people used to take a stage coach and come in, be in D.C. for 
months at a time.
    So it is a different world, but we are waiting to see what 
is going to happen. I am very concerned about the decisions 
that were decided during that period of time. And, of course, 
as you mentioned, Mr. Coppess, what happens in other areas of 
the government.
    So with that, Mr. Chairman, I yield back the balance of my 
time.
    Chairman Roe. I thank the gentlelady for yielding.
    Dr. Bucshon, you are recognized.
    Mr. Bucshon. Thank you, Mr. Chairman. I would also like to 
point out interestingly that the CBO estimated 500,000 people 
would lose their job in America if we immediately raised the 
minimum wage to $10.10 an hour. I would be interested in the 
calculation in all of our districts how many people would lose 
their job if the minimum wage was raised.
    This is for Mr. Borden. Mr. Coppess states in his testimony 
that the NLRB's last attempt in Register-Guard to address 
whether employees have the right to use employer e-mail for 
Section 7 activities ``failed.'' According to Mr. Coppess, 
employers and workers are uncertain of when e-mail 
communications on the NLRA protected topics are protected and 
when they are not.
    Mr. Borden, is this accurate?
    Mr. Borden. I don't think so. I think it would be more 
accurate, with all due respect to Mr. Coppess, to say that the 
NLRB failed to give the AFL-CIO the decision it wanted in that 
case. I think the standard that was set forth in the Register-
Guard decision was extremely straightforward and consistent 
with decades' worth of precedent. And that is simply that 
employers may promulgate and enforce a blanket ban on non-
business-use of e-mail.
    Absent discrimination, there is simply no employee right to 
use employer equipment for Section 7 purposes. I would submit 
that the issue that is currently before the board does not 
exactly have the same level of consensus that my friend here 
has suggested today. It is clear from the board's solicitation 
of amicus briefs that they are considering overturning that 
very clear and straightforward standard and creating a 
substantive right for employees to use employer equipment for 
Section 7 purposes.
    Many employers across the country may choose not to enforce 
such a blanket ban on non-business use of their equipment. I 
have no quarrel with that. But I see no reason for those who 
have chosen to invest in this equipment and to dedicate it 
exclusively to business purposes, no matter how hard that may 
be to enforce, to force them to make it available otherwise. I 
think the thing that creates uncertainty for employers is when 
the agency tasked with interpretation and enforcement of a 
statute so drastically departs from precedent like this every 
four, six, or eight years.
    Mr. Bucshon. I mean, I would just also like to point out, 
my dad was a United Mine Worker for 35 years, so I understand 
that perspective. I mean, would you--I am just guessing--I 
mean, maybe the reason why unions want access to their business 
e-mails is because at many businesses people aren't really 
interested in what they have to say, and so they are having 
problems getting access to personal e-mail information. And 
this is a way of co-opting and passing on information to people 
that may or may not be interested in what they are trying to 
promote.
    I mean, I don't think you necessarily need to comment on 
that, but that would be, I think, maybe something that could 
be.
    In Register-Guard--also for you--in Register-Guard, the 
dissenting Democrat board member stated, if an employer has 
given employees access to e-mail for regular routine use in 
their work, he would find that banning all work-related 
solicitations is presumptively unlawful, absent special 
circumstances.
    Is this standard applied anywhere else?
    Mr. Borden. I am unaware of any agency, court, or authority 
that requires employers to make employer equipment available to 
employees for non-business use. I don't--I am sure that--
consistent with what we discussed earlier, there may be 
employers that choose to allow employees to do so. But I am 
unaware of, you know, a law or a principle that would require, 
for example, a freight delivery company to allow drivers to 
drive their trucks around on the weekend or to go to the store, 
or what have you. I am just unaware of any.
    Mr. Bucshon. Thank you very much. I yield back, Mr. 
Chairman.
    Chairman Roe. Thank the gentleman for yielding.
    Dr. Holt, you are recognized for five minutes.
    Mr. Holt. I thank the chair.
    Let me begin by asking the gentleman who just spoke if he 
knows that 66,000 of his hardworking constituents and 43,000 of 
mine would receive a pay raise--
    Mr. Bucshon. Would the gentleman yield?
    Mr. Holt. --if--if the--I am asking you a question, so in a 
moment I will yield--would receive a pay raise if the gentleman 
supported raising the minimum wage to $10.10 an hour under the 
Fair Minimum Wage Act.
    Mr. Bucshon. Will the gentleman yield for a second?
    Mr. Holt. I would yield for an answer.
    Mr. Bucshon. I would be interested to know how many people 
in my district would lose their job if the minimum wage was 
raised to $10.10 an hour. I yield back.
    Mr. Holt. I would suggest that the gentleman talk with 
economists from Pennsylvania and Indiana and New Jersey and 
other universities that have said over and over again that job 
loss--net job loss--is not a major effect of increases in the 
minimum wage.
    Mr. Coppess, a couple of questions. First of all, just to 
continue the discussion that was--well, it was the one-sided 
discussion with Mr. King that you did not get a good chance to 
answer. In how many cases has the current board actually 
overturned precedent, as Mr. King was suggesting has been 
happening a lot?
    Mr. Coppess. I haven't kept a tabulation. I can't on the 
top of my head think of any. I would talk about the Specialty 
Healthcare case in particular being--that has been brought up. 
What happened in Specialty Healthcare was the board had used a 
variety of formulations to describe what an employer would have 
to show in order to broaden a petition for a bargaining unit in 
an election case.
    And the formulation the board chose to use as they thought 
being a particularly clear statement of the law was a 
formulation suggested by Judge Douglas Ginsburg of the D.C. 
Circuit, who was famous as a nominee to the Supreme Court by 
President Reagan. He is hardly a left-wing activist.
    The Specialty Healthcare case itself was challenged in the 
Sixth Circuit, and the Chamber of Commerce--I believe Mr. 
King's firm maybe represented them--filed an amicus brief. The 
Sixth Circuit unanimously upheld the board's decision in that 
case. The same issue was raised in the Fourth Circuit in a case 
that I argued for the machinists. Once again, the Chamber filed 
an amicus brief on the merits in that case. The Fourth Circuit 
said the board was right. They went on to do a recess 
appointment thing that has kept the case suspended.
    But that particularly notorious example of overturning the 
law is a perfect example of them just clarifying the law and 
applying established standards and deciding cases.
    Mr. Holt. Thank you. You know, I find it interesting that 
we are even holding this hearing today. You know, I am always 
happy to speak about the NLRA. We sit here under the gaze and 
the portrait of Chair Mary Norton, who oversaw the Labor 
Committee when that was passed, which I think is a landmark in 
world history of setting up employer and employee rights and 
protections and collective bargaining and the associated 
legislation establishing wages, a floor on wages, and a limit 
on working hours.
    I wish we were having a hearing about how we could 
strengthen and expand these protections, which I really think, 
as I said, have been a landmark in world history that make for 
a better economy, really, beneficial to everyone. This is not 
just about employee rights. This is about having a more 
efficient and, not incidentally, humane economy.
    Mr. Coppess, another question. I am wondering whether there 
is a--kind of a red herring or an argument without content 
about--employers that have equipment, such as e-mail, that is 
dedicated exclusively to work-related use. First of all, I am 
wondering how common that is with respect to e-mail and, 
secondly, I am wondering whether anybody here or elsewhere has 
been talking about diverting these things that are--that are, 
in fact, existing for dedicated exclusively for worker use to 
labor organizing.
    Mr. Coppess. No. I mean, I can't emphasize strongly enough 
that what we are talking about here is application to e-mail of 
exactly the line of bulletin board cases that Congressman Byrne 
was talking about. And the problem arose in the first instance, 
because the Seventh Circuit in Guardian Industries reacted to 
what all we labor lawyers understood to be the law, was that 
don't tell those employees that they can put up sales notices 
on your bulletin board or picnic notices or anything like that, 
because the law will be, if you let them do that, they can put 
up union notices.
    And the Seventh Circuit in Guardian Industries said, well, 
why is that? Maybe you are using the word discrimination in a 
way we don't understand. Maybe you need to explain the 
particular NLRA meaning of it, which is the case. They use the 
word discrimination in a particular way that traces its way 
back to Republic Aviation, and that is what you have at issue 
in the e-mail cases.
    If an employer in--
    Chairman Roe. Mr. Coppess, could you wrap up? Because the 
time is expired.
    Mr. Coppess. Yes. Actually, it was the subject of a lot of 
questions, so I will try and do it real fast. But if the 
employer restricts the use of e-mail to nothing but business 
use, they can do that. They do, in fact, do that, but if, in 
some fantasy world, someone did do that, it would not be 
illegal.
    Mr. Holt. And it is basically a null set.
    Chairman Roe. Gentleman's time has expired.
    I will now finish the questioning. Mr. King, I know that 
you mentioned--and this case should be the--the Noel Canning 
case should come up within a week or two, I think, the ruling. 
And it is a huge ruling. And I completely agree with you. How 
long, if you have a client that now has 380 cases in front--and 
you mentioned one client that thousands of days, years, to get 
to conclusion, that uncertainty creates a real problem for 
business out there going forward, expanding and growing their 
business.
    I completely agree with you. What we expect of the NLRB is 
that, look, they should be a fair arbiter. Just like when you 
play in an athletic game, you know what the rules are, both 
teams know what the rules are, what the rules have been for 30 
years. And my question to you is, how long would it take? And 
then, secondly, if the NLRB is not looking to change all these, 
why are they requesting amicus briefs to come before that, if 
they don't--if it is established policy, why are you fooling 
around with it?
    Mr. King. I wish I could answer your last question. I don't 
know what the intent is. I can only react to what the agenda 
is. One has to question whether this accelerated agenda is 
perhaps being pursued because we are in an election year 
environment and that the agenda will be pursued aggressively 
before November and/or that one of the members of the board's 
term expires in December this year.
    But back to predictability. Mr. Coppess and I do agree 
amicus briefs make sense, but there have been significant cases 
overturned. And they are attached to my testimony, one of 
which, WKYC-TV, overturned 50 years of precedent, Democrat and 
Republican boards repeatedly, with respect to dues checkoff. So 
it would not be accurate to say that precedent has not been 
overturned. It has been overturned consistently.
    Your initial question, Mr. Chairman, if it took the NLRB 
over three years in New Process Steel, where we only had 100 
cases coming back, and we have at least on a 20-year look 
back--and we have done extensive research on this--4,000 cases, 
you can start to do the math.
    Now, there is also a very important distinguishing 
characteristic that Mr. Coppess did not share with us, is that 
the New Process Steel cases, the 100 that came back, were by 
unanimous decision of a two-member board. They did not overturn 
precedent. They had no controversy associated whatsoever.
    We are talking about an inventory of cases here, Mr. 
Chairman, in part that are highly controversial--they are 
attached to my testimony--that will take a period of time. So 
back to your initial question and conclusion. We have at least 
one case, the Roundy's case, that has been pending before this 
board for 2,582 days, over seven years. We have 383 cases that 
are pending for a long period of time. Why isn't that the first 
priority of this board?
    Chairman Roe. And I would argue there are businesses out 
there that are yearning for a decision. Mr. Borden, I want to 
ask you. And I think this is hugely important, the new media 
and the way we communicate now. It has completely changed. Just 
ask the post office if new media hadn't changed their business 
model.
    In Register-Guard, the NLRB held that employees have no 
statutory right to use employer e-mail systems for Section 7. 
What are Section 7 activities?
    Mr. Borden. Section 7 of the National Labor Relations Act 
is essentially the heart of the act. It is what allows 
employees the right to form, join or explore union 
representation, to bargain through representatives of their 
choosing, to act in other concerted ways for their mutual aid 
and protection, as well as the right of employees to refrain 
from participating in all of those activities.
    And that is essentially what the board dissent in Register-
Guard wanted to use as the foundation for this right of 
employees to use an employer's e-mail system no matter what the 
employer's perspective on restriction of that system would be. 
If the issue were truly as simple as it has been presented 
today by Mr. Coppess, it may even be more troubling, because 
there would be absolutely no reason for the board to solicit 
amicus briefs in this issue. They would just be relying on the 
Register-Guard decision.
    Chairman Roe. One just very quickly, because my time is 
getting close to it. I have an office, 125,000 square foot 
office building, that we contract out to get cleaned. I might 
not like the cleaning in one section. This is a contractor that 
I have a relationship with. And I say, look, this is not 
getting done over here. It is the same person cleaning it. If 
they get fired, am I now responsible for that person? Did I 
have control over what happened? Because that is what I think 
that I am hearing you say, is they are trying to do with this 
ruling.
    Mr. Puzder. I would hope that is not the case--I would hope 
that wouldn't be the case. And I think a key determinant would 
be, when you had a problem, you went to the contractor, you 
didn't got the contractor's employees.
    Chairman Roe. That is correct.
    Mr. Puzder. And it is the same thing, if we have a problem 
with a franchisee, we go to the franchisee, not the 
franchisee's employee. So I would hope that situation would 
never be covered, even if there is a rule change.
    Chairman Roe. Well, I have to gavel myself. My time has 
expired.
    Mr. Tierney, closing remarks?
    Mr. Tierney. Well, fine, I was going to do this in closing 
remarks. I was going to ask for five more minutes to do that, 
but, look, I just know that we have been making a comparison 
here today that if we could change the committee's function off 
of trying to usurp a decision by the board that hasn't been 
made yet, we could talk about raising the minimum wage, which 
in your district, Mr. Chairman, would be 67,000 people getting 
a boost, in my district, 41,000, and that would be a good 
discussion for us to have. You could tell us why that shouldn't 
be. We could explain why it would be important.
    But I want to talk a little bit about why the National 
Labor Relations Board is involved in reviewing cases at all. 
One of my colleagues said, why are they even reviewing it? Our 
witness, Mr. Coppess, did note that in the preamble to the 
National Labor Relations Act, it observed that the inequality 
of bargaining power between employees who do not possess full 
freedom of association or actual liberty of contract and 
employers who organize in the corporate or other forms of 
ownership association depress wage rates and the purchasing 
power of wage earners in industry. So that is a concern on 
that.
    And I think when we have even people like the International 
Monetary Fund and others decrying the inequity and inequality 
that is now in our economy and saying this is not good for 
democracy, this creates instability, this tampers down 
mobility, that we know we have a problem in that regard. 
Economists of all persuasions are telling us and speak to the 
fact that the reasons that we have growing inequality, one of 
the major reasons is a decrease in organized labor membership 
and the lack of employee bargaining power, and that has caused 
wage stagnation. When wages are stagnant for one group of 
people, they tend to take away the incentive for employers to 
keep pace and have their pay system be more robust.
    So one of the things that the preamble to the National 
Labor Relations Board cites as what would be a solution to 
that--and is also in our witnesses' testimony--is that they 
would encourage the practice and procedure of collective 
bargaining and protect the exercise by workers of the full 
freedom of association, of self-organization, and designation 
of representatives of their own choosing for the purpose of 
negotiating the terms and conditions of their employment.
    And that is the whole idea. This Act is set here so that 
people can negotiate the terms of their employment and their 
conditions. If an employee can't get to the table, the person 
who is actually setting those terms and conditions, that right 
is defeated. The National Labor Relations Board has an 
obligation, I would think, to take a look into why would that 
be?
    If you have an employer who is making--who is saying to you 
at the table, well, I don't really make that decision, I am 
just a subcontracted third party and I have hired you, but it 
is really the guy that contracted to me that is making the 
decisions, but he is not at the table, it defeats that whole 
purpose of the National Labor Relations Board, which is to make 
sure that people can negotiate the terms and conditions of 
their contract. I think that is what the board in at least one 
case is going to try to get at. What would be the standard that 
we set to enable people to make that decision?
    So there is a purpose for the National Labor Relations 
Board. There is a purpose as to why they review these cases, 
and that is to make sure that employees have the full benefit 
of what the law intended, their ability to negotiate with the 
persons making the decisions on the terms and conditions of 
their employment.
    In that sense, I think it is important for the board to 
take in all the information it can possibly take in and make a 
consideration of how that purpose of the statute is best 
accomplished. And I hope the board will do that. I suspect they 
would. I have seen--I heard nothing today that would lead me to 
believe that they won't.
    And again, I think that I wish that we had a hearing on 
some of the other things that are pressing about equal pay for 
equal work, about raising the minimum wage, about conditions in 
the workplace and so on, on that, but I hope, Mr. Chairman, we 
will get to those things sooner, rather than later, and I thank 
you for the opportunity to close.
    Chairman Roe. Thank you very much. And I appreciate very 
much, the panel has been excellent as usual. And I think this--
we did have every reason to bring up the issues with the NLRB 
with this hearing today. And let me go over just why I believe 
that.
    Mr. Wilson mentioned at the beginning that the NLRB 
basically tried in South Carolina, in Charleston, South 
Carolina--I have been to that plant down there--to close a 
plant that had 1,000 people working, South Carolinians working, 
making good money and supporting their families, along with all 
the other thousands of jobs that went along with that. That was 
beyond me. Not a single person in Everett, Washington, lost 
their job. Not anybody did. As a matter of fact, we are adding 
jobs with the Dreamliner that they are currently building. 
Great company, Boeing, and they were able to go to a right-to-
work state and expand their business there and to make money 
for Americans and to expand opportunity.
    We have also seen this ambush election, where the average 
election median time is 35, 37, 38 days for an election. It is 
not a long time at all. Both employees and employers need time. 
I could not in my business in one week get a labor lawyer like 
you up to speed with my needs, and these elections could occur 
in as little as 10 days. That is activist, folks, when you do 
that.
    And I can tell you, a lot of things that are done quickly 
like that are done poorly. They need to be thought-out, well-
thought-out. And the micro unions, I don't know how in the 
world you would run a retail business with five, six, eight, 
10, 12, 15 unions in that business with different bargaining 
units that you would have to go to. That is activist, and that 
is why we should be here today hearing this.
    I think free speech, the secret ballot protection, I can't 
think of anything in America more precious than a secret 
ballot, being able to vote for who you want to. And I say this 
as a joke. It is not. The secret ballot--my wife claims she 
votes for me. I don't know that she does, because it is a 
secret ballot. She claims she does.
    That is why it is important to have that protection for 
that employee, for every person in this country is elected--Mr. 
Tierney was elected like that. The President and the United 
States, the president of the unions are elected like that. We 
should protect that right.
    I put on a uniform. I left this country 41 years ago to 
serve near the demilitarized zone in Korea for people to have 
that right. I think also that--and there is income inequality. 
I agree with you completely on that. I think the problem is the 
skills gap in this country. We traveled around--we had CODEL--a 
couple of weeks ago. And you look at--and Southeast Asia.
    I look in my own district where I live, there is one county 
we have, and it is not a large county, with 1,000 jobs open 
today. One is in a manufacturing plant that has 50 jobs open 
today, and they don't have the skills to line up. And so we 
have to--and that is what this particular committee is very, I 
think, committed to, is closing that skills gap so we have 
workers that match up with the high-tech jobs of today. So that 
is an issue, I think.
    And Mr. Puzder, I don't know how many or what percent of 
the people in this country have entered the workforce through a 
Hardee's, a McDonald's, or any of the other number of 
franchisees. It is a huge percentage, I have read it. And these 
people that go on to be CEOs of companies and--you mentioned 
the--look, I want everybody to make more money. I think that is 
a good thing. I agree with that. But you can't just pay more 
people. You have to have somebody who earns that money.
    And if you want to make these things affordable for the 
people that go in, that buy it, and I think that one other 
thing we can do in this single most important thing, I think, 
in America today that affects the people around the kitchen 
table, where I live, is the price of energy. When the price of 
energy goes up, everybody goes up. I mean, it is--and when 
someone is on a fixed-income--and I live in an area of 
Tennessee that is a very low-income--our median income is not 
as high as it is in America. And when you see the price of a 
gallon of gasoline go to $4.00 or 4.50 a gallon, when you are 
on a fixed-income like my mother is and like a lot of elderly 
people are, it affects the food they buy, everything they 
purchase.
    So the thing we can do is get a coherent energy policy in 
America that makes sense, that lowers energy, makes us energy 
independent, and will make us free of the Middle East. I think 
you can do more for the American people by doing that and their 
jobs than anything I can think of right now.
    And I would like to work with Mr. Tierney and the other 
side to do just that. And we could start by approving the 
Keystone pipeline. I think that would help immediately. We 
could reduce our consumption of Middle Eastern oil by almost 
half by doing that one step.
    I think it has been a great hearing. And, Mr. Tierney, 
welcome to the committee, a great addition to the committee. I 
appreciate your being here.
    With no further business, this hearing is adjourned.
    [Additional Submissions by Mr. Tierney follow:]
    
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    [Whereupon, at 11:43 a.m., the subcommittee was adjourned.]