[Senate Hearing 114-559]
[From the U.S. Government Publishing Office]
S. Hrg. 114-559
AMBUSHED: HOW THE NLRB'S NEW ELECTION RULE HARMS EMPLOYERS AND
EMPLOYEES
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HEARING
OF THE
COMMITTEE ON HEALTH, EDUCATION,
LABOR, AND PENSIONS
UNITED STATES SENATE
ONE HUNDRED FOURTEENTH CONGRESS
FIRST SESSION
ON
EXAMINING THE NATIONAL LABOR RELATIONS BOARD'S (NLRB) NEW ELECTION
RULE, FOCUSING ON EMPLOYERS AND EMPLOYEES
__________
FEBRUARY 11, 2015
__________
Printed for the use of the Committee on Health, Education, Labor, and
Pensions
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Washington, DC 20402-0001
COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS
LAMAR ALEXANDER, Tennessee, Chairman
MICHAEL B. ENZI, Wyoming PATTY MURRAY, Washington
RICHARD BURR, North Carolina BARBARA A. MIKULSKI, Maryland
JOHNNY ISAKSON, Georgia BERNARD SANDERS (I), Vermont
RAND PAUL, Kentucky ROBERT P. CASEY, JR., Pennsylvania
SUSAN COLLINS, Maine AL FRANKEN, Minnesota
LISA MURKOWSKI, Alaska MICHAEL F. BENNET, Colorado
MARK KIRK, Illinois SHELDON WHITEHOUSE, Rhode Island
TIM SCOTT, South Carolina TAMMY BALDWIN, Wisconsin
ORRIN G. HATCH, Utah CHRISTOPHER S. MURPHY, Connecticut
PAT ROBERTS, Kansas ELIZABETH WARREN, Massachusetts
BILL CASSIDY, M.D., Louisiana
David P. Cleary, Republican Staff Director
Evan Schatz, Minority Staff Director
John Righter, Minority Deputy Staff Director
(ii)
C O N T E N T S
__________
STATEMENTS
WEDNESDAY, FEBRUARY 11, 2015
Page
Committee Members
Alexander, Hon. Lamar, Chairman, Committee on Health, Education,
Labor, and Pensions, opening statement......................... 1
Murray, Hon. Patty, a U.S. Senator from the State of Washington.. 3
Isakson, Hon. Johnny, a U.S. Senator from the State of Georgia... 30
Franken, Hon. Al, a U.S. Senator from the State of Minnesota..... 32
Scott, Hon. Tim, a U.S. Senator from the State of South Carolina. 34
Warren, Hon. Elizabeth, a U.S. Senator from the State of
Massachusetts.................................................. 36
Cassidy, Hon. Bill, a U.S. Senator from the State of Louisiana... 37
Casey, Hon. Robert P., Jr., a U.S. Senator from the State of
Pennsylvania................................................... 39
Witnesses
Cohen, Charles I., Senior Counsel, Morgan Lewis LLP, Washington,
DC............................................................. 4
Prepared statement........................................... 6
Carter, Mark A., Esq., Partner, Dinsmore & Shohl LLP, Charleston,
WV............................................................. 8
Prepared statement........................................... 10
Milito, Elizabeth, Senior Executive Counsel, National Federation
of Independent Business (NFIB), Small Business Legal Center,
Washington, DC................................................. 15
Prepared statement........................................... 16
Sencer, Caren P, Esq., Shareholder, Weinberg, Roger & Rosenfeld
P.C., Alameda, CA.............................................. 19
Prepared statement........................................... 21
ADDITIONAL MATERIAL
Statements, articles, publications, letters, etc.:
Senator Collins.............................................. 41
Society for Human Resource Management (SHRM), letter......... 42
Response to questions of Senator Kirk by:
Charles I. Cohen......................................... 43
Mark A. Carter........................................... 43
Elizabeth Milito......................................... 45
Response by Caren P. Spencer to questions of:
Senator Alexander........................................ 46
Senator Kirk............................................. 48
(iii)
AMBUSHED: HOW THE NLRB'S NEW ELECTION RULE HARMS EMPLOYERS AND
EMPLOYEES
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WEDNESDAY, FEBRUARY 11, 2015
U.S. Senate,
Committee on Health, Education, Labor, and Pensions,
Washington, DC.
The committee met, pursuant to notice, at 9:34 a.m., in
room 430, Dirksen Senate Office Building, Hon. Lamar Alexander,
chairman of the committee, presiding.
Present: Senators Alexander, Isakson, Scott, Cassidy,
Murray, Franken, Warren, and Casey.
Opening Statement of Senator Alexander
The Chairman. The Senate Committee on Health, Education,
Labor, and Pensions will please come to order.
This morning we're having a hearing about the National
Labor Relations Board's new rule on union elections. Senator
Murray and I will each have an opening statement. Then we'll
introduce our panel of witnesses. We thank them for coming.
After our witness testimony, Senators will have 5 minutes for
questions.
Last December, the NLRB issued a final rule that shortened
the timeline between when pro-union organizers ask an employer
for a secret ballot election and when that election takes
place. I refer to this as the ambush election rule because it
forces a union election before an employer has a chance to
figure out what's going on. Even worse, it jeopardizes
employees' privacy by requiring employers to turn over personal
information, including email addresses, phone numbers, shift
hours, and locations to union organizers. For that reason,
Senator Enzi, Senator McConnell, and I have introduced a
resolution of disapproval under the Congressional Review Act,
which we expect the Senate will act on after the recess.
Today, more than 95 percent of union elections occur within
56 days of the petition filing. Under this new rule, elections
could take place in as few as 11 days. The rule will harm
employers and employees alike. Here's how.
If you're an employer who gets ambushed, on day 1 you get a
fax copy of an election petition that has been filed at your
local NLRB regional office stating that 30 percent of your
employees support a union. The union may have been quietly
trying to organize for months without your knowledge. Your
employees have heard only the union's pitch.
By day 2 or 3, you must publicly post an election notice in
your workplace and online if you communicate to your employees
electronically. By noon on day 7, you must file with the NLRB
what is called a Statement of Position. This is a comprehensive
written document in which an employer sets out legal positions
and claims, and under the new rule you waive your rights to use
any legal arguments not raised in this document. On day 7 you
must also present the union and the NLRB with a list of
prospective voters, as well as their job classifications,
shifts, and work locations.
On day 8, a pre-election hearing is held at the regional
office and an election date is set. By day 10, you must hand
the union a list of employee names, personal email addresses,
personal cell phone numbers, and home addresses. Day 11 is the
earliest day on which an election could be held. Under this new
rule a union could postpone an election by 10 days at this
point, but the employer has no corresponding power.
Under this new NLRB rule, before the hearing on day 8 an
employer will have less than 1 week to figure out what an
election petition is, find legal representation, determine
legal positions on the relevant issues, learn what statements
and actions the law permits and prohibits, gather information
required by the NLRB, communicate with employees about the
decision they're making, and correct any misstatements and
falsehoods that employees may be hearing from union organizers.
Making even the slightest mistake in the lead-up to an election
can result in the NLRB setting aside the results and ordering a
re-run election; or worse, the Board could require an employer
to automatically bargain with the union.
It is the employees who stand to lose the most under this
rule. First, because of this ambush, employees will hear only
half the story about what unionizing will mean for them and
their workplace. As the two dissenting members of the NLRB put
it, employees will be asked to ``vote now, understand later.''
Second, employees lose their privacy because the rule
requires employers to hand over employees' personal email
addresses, cell phone numbers, shift hours, locations, and job
classifications even if the employee has said he doesn't want
to be contacted by union organizers.
This rule appears to be a solution in search of a problem.
Only 4.3 percent of union elections occur more than 56 days
after the petition filing, and the current median number of
days between a filing and an election is just 38 days. These
figures are well within the NLRB's own goals for timely
elections. Unions won 64 percent of elections in 2013. In
recent years, the union win rate has been going up.
In a 1959 debate over amendments to the National Labor
Relations Act, then Senator John F. Kennedy warned against
rushing employees into an election saying,
``There should be at least a 30-day interval between
the request for an election and the holding of the
election in which both parties can present their
viewpoints.''
That was Senator Kennedy's view.
It's clear to see the rule is wrong. That's why we've
introduced the Congressional Review Act resolution. We'll ask
the Senate to disapprove the NLRB's new rule and prohibit it
from issuing any similar rule. The House will follow a similar
process. I hope the full Senate will agree.
Senator Murray.
Opening Statement of Senator Murray
Senator Murray. Well, thank you very much, Mr. Chairman. I
especially want to thank all of our witnesses who are joining
us today and taking time out of your lives.
In Congress, we should really be working on ways to grow
the economy from the middle out, not the top down. Over the
last several decades, the middle class has gotten stuck with a
shrinking share of America's prosperity, even as the biggest
corporations have posted record profits, and even as American
productivity has increased.
American workers' paychecks have stagnated, and many are
struggling now to make ends meet on rock-bottom wages and poor
conditions on the job.
Unfortunately, once again, instead of sticking up for
workers, some of our Republican colleagues are rushing to the
defense of the biggest corporations that have an interest in
keeping wages low and denying workers a voice to improve their
workplace.
When workers want to vote on whether to form a union, they
aren't looking for special treatment. They are simply trying to
exercise their basic rights. Too often, big corporations use
loopholes in the current election process to delay a straight
up-or-down vote.
Workers have the right to vote on union representation in
elections that are free from unnecessary delays and wasteful
stall tactics. Our country should not turn our backs on
empowering workers through collective bargaining, especially
because that is the very thing that helped so many workers
climb into the middle class.
As a reminder, by law, workers have the right to join a
union so they can have a voice in the workplace. Right now, the
NLRB's election process is outdated. The NLRB's new
representation rule makes important but very modest amendments
to guarantee a free and fair election process in today's modern
workplace.
For example, the old election rule is vulnerable to
frivolous litigation, which could drag out elections and put
workers' rights on hold. The new rule will reduce unnecessary
litigation on issues that aren't relevant to the outcome of the
election.
In the past, employers had to send out mail through the
post office, which cost time and it cost money. This new rule
brings the rules into the 21st century by letting employers and
unions file forms electronically. It will allow the use of more
modern forms of communication with employees through cell
phones and email.
These changes aren't just good for workers. They are also
good for employers by streamlining the election process. Some
of my colleagues on the other side of the aisle take great
offense to these modest changes. Instead of standing up for
workers across the country who are struggling with stagnant
wages, Republicans have chosen to challenge these common-sense
reforms.
Let's be clear: This rule is about reducing unnecessary
litigation, and using cell phones and email to transmit
information in 2015 is just common sense.
A worker wanting to have a voice in the workplace is not an
ambush. It is their right as guaranteed by the National Labor
Relations Act and by the First Amendment of our Constitution.
Workers having a seat at the bargaining table is critical
to America's middle class. It's not a coincidence that when
more workers can stand up for their rights, wages increase,
workplaces are safer, and access to health care goes up.
In short, middle-class Americans are better able to share
in the economic prosperity that they have earned through hard
work.
Instead of attacking workers who want to collectively
bargain, I hope that our colleagues on the other side of the
aisle reconsider this approach and work with us to protect
workers' rights and increase wages and grow our Nation's middle
class.
I do truly hope that Republicans and Democrats can break
through the gridlock and work together on policies that help to
create jobs and expand economic security and generate broad-
based economic growth for workers and families, not just the
wealthiest few.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Murray.
I'll now introduce our witnesses. Senator Murray, would you
like to introduce Ms. Sencer?
Senator Murray. I think you're just going to go ahead and
do it.
The Chairman. OK, I'll do it.
Charles Cohen is the Republican member of the NLRB from
1994 to 1996. Since his service on the Board, he's worked in
private practice, specializing in NLRB proceedings.
Mark Carter is a labor attorney with extensive experience
dealing with union organizing, corporate campaigns, and
collective bargaining.
Elizabeth Milito is senior executive counsel with the
National Federation of Independent Business Small Business
Legal Center. She frequently consults small businesses dealing
with labor issues.
Ms. Caren Sencer is an attorney with Weinberg, Roger and
Rosenfeld in Alameda, CA. She regularly practices before the
NLRB and has participated in more than 100 election hearings
from which to draw examples for this testimony.
We welcome the four of you. If each of you would summarize
your remarks in 5 minutes, we would appreciate it because that
will give the Senators more time to have a conversation with
you.
STATEMENT OF CHARLES I. COHEN, SENIOR COUNSEL, MORGAN LEWIS
LLP, WASHINGTON, DC
Mr. Cohen. Chairman Alexander, Ranking Member Murray, and
members of the committee, thank you for your invitation to
participate in this hearing. I'm honored to appear before you
today.
I am senior counsel in the law firm of Morgan Lewis and
Bockius, LLP, where I represent employers in many industries
under the National Labor Relations Act. As you mentioned,
Senator Alexander, from 1994 to 1996 I had the privilege of
serving as a member of the NLRB and was appointed by President
Clinton and confirmed by the Senate.
My entire professional career, spanning more than 40 years,
has been spent working under the NLRB. For the first 8 of those
years, I worked at the NLRB both at Washington and two regional
offices. During that time, I personally conducted NLRB
elections, served as a hearing officer, litigated in the courts
of appeal, and performed the myriad of other functions of a
Board agent, supervisor and deputy regional attorney.
Apart from my time with the NLRB, the remainder of my
professional activity has been spent representing employers in
traditional labor matters.
On December 15 of last year, the NLRB published its
extensive rule, which revises on a wholesale basis the
regulations regarding union elections. The final rule will,
among many things, dramatically shorten the period of time
between a union filing an election petition with the Board and
the actual holding of the election. It will also undermine an
employer's ability to mount a lawful, effective information
dialog with its employees on whether or not to select union
representation.
The final rule described by the two dissenting NLRB members
as the Mt. Everest of regulations took 733 pages to print when
issued, and occupied 200 pages in the Federal Register.
The final rule is, in my judgment, a transparent attempt to
circumvent Congress on the issue of how, if at all, to reform
the Nation's labor laws after the failure of the prior Congress
to pass the Employee Free Choice Act, legislation supported by
the labor movement that would have all but ended secret ballot
elections at the NLRB in favor of card check recognition.
The changes that have brought us here today are of a
different magnitude than anything the NLRB has done in the
past. They represent no less than an attempt by the NLRB to put
its thumb on the scale in favor of union representation.
In virtually every controversial NLRB initiative that I
have witnessed in the past, the emphasis has been on enforcing
the law while plugging opportunities for parties to violate the
law or game the system. Unlike any of these other initiatives,
however, this one transparently seeks to deprive law-abiding
and non-games playing employers of the right to communicate
their views under Section 8(c) of the Act. The entire employer
community is presumed to be on the wrong side, standing ready
to trample the rights of employees.
The final rule also deprives employees of their right to
receive key information from all sides in order to be fully
informed on how and whether to exercise their section 7 rights.
Some key facts are relevant to the final rule's background
in our discussion today. Union density in the private sector
has been on the decline and is currently below 7 percent of the
private sector workforce. Whatever the cause, the scope of
which is beyond this debate, it is obviously distressing to
organized labor.
As virtually every NLRB agent knows, the longer the period
of time between the filing of an election petition and an
election, the less likely it is that employees will select a
union. This is so whether or not unlawful or objectionable
conduct has occurred.
Over the decades, there have been legislative calls from
organized labor to dramatically shorten the period of time from
petition to election, and the possibility of shortened election
periods was widely discussed during the policy debates
surrounding the Employee Free Choice Act. No legislative change
has occurred.
What does the Board come up with in its final rule? It has
proffered the gimmick of a hurried and emasculated hearing,
contrary to the statute; a binding Statement of Position under
the threat of waiver; offers of proof instead of actual
testimony; preclusive rules to limit issues; 2 days to submit
employee lists with personal email and telephone contact
information; and other frenetic timelines.
On top of these problems, the final rule will lead to far
fewer elections where the parties obtain decisions on voter
eligibility and supervisory status issues before employees
vote. That's throwing many more election campaigns into chaos
and confusion.
This concludes my testimony. I would be happy to answer any
questions.
[The prepared statement of Mr. Cohen follows:]
Prepared Statement of Charles I. Cohen
Chairman Alexander, Ranking Member Murray, and members of the
committee, thank you for your invitation to participate in this
hearing. I am honored to appear before you today.
By way of introduction, I am Senior Counsel in the law firm of
Morgan, Lewis & Bockius LLP, where I represent employers in many
industries under the National Labor Relations Act (NLRA). From 1994 to
1996, I had the privilege of serving as a member of the National Labor
Relations Board (NLRB or Board), and was appointed by President Clinton
and confirmed by the U.S. Senate.\1\
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\1\ I am not speaking on behalf of Morgan, Lewis & Bockius LLP or
any other specific organization, and my testimony should not be
attributed to any organization. There is pending litigation challenging
the implementation of the Final Rule in which I, and the firm, are
involved. Chamber of Commerce of the United States, et al. v. National
Labor Relations Board, Case No. 1:15-cv-00009-ABJ (D.D.C.). However,
this testimony reflects my own personal views, although I wish to thank
David R. Broderdorf for his efforts in helping me prepare this
testimony.
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My entire professional career, spanning more than 40 years, has
been spent working under the NLRA. For the first 8 of those years, I
worked at the NLRB, both in Washington and in two regional offices.
During that time, I personally conducted NLRB elections, served as a
hearing officer, litigated in the Courts of Appeal, and performed the
myriad of other functions of a Board agent, supervisor, and deputy
regional attorney. Apart from my time with the NLRB, the remainder of
my professional activity has been representing employers in traditional
labor matters.
On December 15, 2014, the NLRB published an extensive Final Rule,
which revises on a wholesale basis, the regulations regarding union
elections (Final Rule).\2\ The Final Rule will, among many things,
dramatically shorten the period of time between a union filing an
election petition with the Board and the actual holding of the
election. It also will undermine an employer's ability to mount a
lawful, effective information dialog with its employees on whether or
not to select union representation. The Final Rule, described by the
two dissenting NLRB members as the ``Mount Everest'' of regulations,\3\
took 733 pages to print when issued and occupied 200 pages in the
Federal Register.
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\2\ 79 Fed. Reg. 74,308-490 (Dec. 15, 2014).
\3\ 79 Fed. Reg. at 74,430 (dissent).
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The Final Rule is a transparent attempt to circumvent Congress on
the issue of how, if at all, to reform the Nation's labor laws after
the failure of the prior 111th Congress to pass the Employee Free
Choice Act (EFCA), legislation supported by the labor movement that
would have all but ended secret ballot elections at the NLRB in favor
of ``card check'' recognition.
I appreciate the difficulty and inherent tensions in working under
the NLRA. The statute guarantees the right to engage in union
activities. It also ensures the right to refrain from such activities.
These tensions, since the early years of my career, have played out in
ways that have become much more political, engrained, and contentious.
In those beginning years, there tended to be slightly different
emphases in NLRA interpretation based upon the prism through which the
appointees at the Board viewed the Act. Over four of the last five
presidential administrations, the proverbial envelope has been pushed.
Appointees, supported by Republicans and Democrats alike, bear some
measure of responsibility for the increased polarization. But, the
changes that have brought us here today are of a different magnitude.
They represent no less than an attempt by the NLRB to put its thumb on
the scale in favor of union representation.
In virtually every controversial NLRB initiative that I have
witnessed in the past, the emphasis has been on enforcing the law while
plugging opportunities for parties to violate the law or game the
system. Unlike any of these other initiatives, however, this one
transparently seeks to deprive law-abiding and nongames-playing
employers of their right to communicate their views under Section 8(c)
of the Act. The entire employer community is presumed to be on the
wrong side standing ready to trample the rights of employees. The Final
Rule also deprives employees of their right to receive key information
from all sides in order to be fully informed on how and whether to
exercise their Section 7 rights.
Some key facts are relevant to the Final Rule's background, and our
discussion today:
Union density in the private sector has been on a decline
and is currently below 7 percent of the private sector workforce.
Whatever the cause, the scope of which is beyond this debate, it is
deeply distressing to organized labor.
Over the past 20 years, unions have been seeking
alternatives to winning secret ballot elections, typically through
neutrality and card check procedures, often obtained through the
pressure of corporate campaigns.
As mentioned, unions have unsuccessfully sought
legislation, through the Employee Free Choice Act, that would have
functionally eliminated secret ballot elections conducted by the Board.
As virtually every NLRB agent knows, the longer the period
of time between the filing of an election petition and an election, the
less likely it is that the employees will select a union. This is so
whether or not unlawful or objectionable conduct has occurred.
Over the decades, there have been legislative calls from
organized labor to dramatically shorten the period of time from
petition to election, and the possibility of shortened election periods
was widely discussed during the policy debates surrounding the Employee
Free Choice Act. No legislative change has occurred.
At the time I served as a Member of the Board during the Clinton
administration, there were similar calls for more rapid elections and
to change the Board's procedures following the Dunlop Commission's
Report.\4\ However, after considering these issues, the Board concluded
that the requirement of a fulsome pre-election hearing prevented the
Board from having an unfettered right to accelerate the election
process. Angelica Healthcare Services, 315 N.L.R.B. 1320 (1995); Barre
National, Inc., 316 N.L.R.B. 877 (1995). The simple point was that the
statute guaranteed an appropriate pre-election hearing.
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\4\ Dunlop Commission on the Future of Worker-Management Relations,
Final Report at 41 (Dec. 1, 1994).
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What has the Board now come up with in the Final Rule? It has
proffered the gimmick of a hurried and emasculated hearing, a binding
statement of position under the threat of waiver, offers of proof
instead of actual testimony, preclusive rules to limit issues, and
frenetic time deadlines that disregard other obligations of employers
and their counsel, all in an attempt to get to the election as soon as
humanly possible and without giving the employer time to communicate
with its employees. On top of these problems, the Final Rule will lead
to far fewer elections where the parties obtain decisions on voter
eligibility and supervisory status issues before employees vote, thus
throwing many more election campaigns into chaos and confusion.
Open and free non-coercive speech and an opportunity to communicate
is the law in place. As the Supreme Court stated recently, Congress's
overarching ``policy judgment . . . favor[s] uninhibited, robust, and
wide-open debate in labor disputes,'' including the ``freewheeling use
of the written and spoken word.'' \5\
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\5\ Chamber of Commerce v. Brown, 554 U.S. 60, 67-8 (2008).
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In the Final Rule, the Board majority acknowledged the perception
of why these rules are being promulgated. As the Board said,
``[m]any comments additionally charge that the Board's
motivation for issuing the rule are improper in that the Board
seeks to act as an advocate for unions (rather than as a
neutral overseer of the process), to drive up the rates of
union representation, and to `stack the deck' against employers
in union organizing campaigns.'' \6\
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\6\ 79 Fed. Reg. at 74,326 n.83.
The Board went on to disclaim any such desire. Regardless of the
Board's true motivations, this is the result of the Final Rule. The
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dissenting Board members aptly described the outcome:
``[T]he inescapable impression created by the Final Rule's
overriding emphasis on speed is to require employees to vote as
quickly as possible--at the time determined exclusively by the
petitioning union--at the expense of employees and employers
who predictably will have insufficient time to understand and
address relevant issues.'' \7\
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\7\ 79 Fed. Reg. at 74,460 (dissent).
Employees will, in practice, be asked to ``vote now, understand
later.'' \8\
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\8\ Id. at 74,430 (dissent).
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In light of all available objective data regarding the Board's
election-related performance, the Final Rule is at best characterized
as a ``solution in search of a problem.'' \9\ Most glaringly, the Board
did not find the ``problem''--significant delays, characterized as more
than 56 days from petition to election--in more than a fraction of all
cases. To the contrary, the evidence shows that significant delays
occur in less than 6 percent of elections.\10\ The Final Rule is not
even targeted to those 6 percent of elections, but rather rewrites the
procedures governing all elections. As the dissenting Board members put
it, ``[t]hese relatively few cases do not provide a rational basis for
rewriting the procedures governing all elections.'' \11\ Nor can the
Board claim that the current process results in unions losing far too
many elections, as in the past 4 years alone unions have won over 60
percent of elections held.\12\
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\9\ Id. at 74,449 (dissent).
\10\ Id. at 74,434 (dissent).
\11\ Id. at 74,456 (dissent).
\12\ NLRB, Election Reports, http://www.nlrb.gov/reports-guidance/
reports/election-reports (last visited Feb. 4, 2015).
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This objective data confirms that prior initiatives, although not
always welcomed by all, have been extremely effective in implementing
the policies and purposes of the Act. The Final Rule, unfortunately,
will add further fuel to a perception that the Board is casting its own
vote in favor of union representation rather than safeguarding the
process by which employees can make this choice for themselves after
having a reasonable opportunity to get information from all sides.
Importantly, the Final Rule takes another inappropriate step by
mandating that employers turn over employee personal telephone and
email addresses to unions. Even worse, while acknowledging that ``the
privacy, identity theft, and other risks may be greater than the Board
has estimated,'' the Board nonetheless asserted that those ``risks are
worth taking.'' \13\ They are not worth taking.
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\13\ 79 Fed. Reg. at 74,341-42.
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I wish it did not have to be the case, but my time spent with the
Act informs me that no public good will come from the Final Rule. There
will undoubtedly be proposed budget cuts, congressional backlash and
increased oversight, such as this very hearing, and more politicization
of the NLRB. This is neither good nor fair for the NLRB as an
institution, its staff, or indeed the country. As President Obama
observed on June 29, 2011:
``We can't afford to have labor and management fighting all
the time, at a time when we're competing against Germany and
China and other countries that want to sell goods all around
the world.''
This Final Rule by the Board will result not only in increased
fights between labor and management; it will embroil the U.S.
Government in a most unfortunate way.
This concludes my prepared testimony. Thank you again for the
invitation to appear today. I would be happy to answer any questions
that members of the committee may have.
The Chairman. Thank you, Mr. Cohen.
Mr. Carter.
STATEMENT OF MARK A. CARTER, ESQ., PARTNER, DINSMORE & SHOHL
LLP, CHARLESTON, WV
Mr. Carter. Well, good morning, Chairman Alexander, Senator
Murray, and Senators of the committee. On behalf of the U.S.
Chamber of Commerce, thank you for inviting me to testify on
this very important and very time-sensitive issue.
My name is Mark Carter. I'm a partner with the law firm of
Dinsmore & Shohl in the great State of West Virginia.
I have practiced law for nearly 29 years, focusing on labor
relations, and this ambush regulation is the most dramatic
revision to that process in that law that I have ever
confronted.
The National Labor Relations Act requires that employers,
unions and employees have a right to communicate regarding
organizing drives. The Supreme Court has recognized that. The
Act reflects a policy judgment which suffuses the Act as a
whole as favoring uninhibited, robust, and wide-open debate.
Similarly, the Court has also held that an employer's free
speech right to communicate his views to his employees is
firmly established and cannot be infringed by a union or the
National Labor Relations Board.
The pragmatic impact of the ambush election regulation is
that it will effectively eliminate the opportunity of an
employer to communicate his or her views regarding unionization
with employees.
At least one situation from my career is illustrative of
how important it is that employers are able to tell their side
of the story. In 2011, I represented an employer that was
presented with a petition by the NLRB. In the course of the
union's campaign, the employees were told that their dues
obligations would be significantly less than what the union had
reported it charged members on a federally mandated form. The
employer then published that form, which established what the
union actually did charge for dues. Armed with this
information, the employees voted not to be represented by that
union.
I am convinced that the free speech and free exchange of
information that took place during that campaign helped those
employees make this a very difficult and important decision.
The ambush regulation shortens the time of an organizing
drive from about 40 days to as few as 10 days. The fundamental
principle behind the regulation is that it is far easier to win
a campaign when the other candidate is unaware of the election.
The companion principle is that if the other candidate is
consumed by bureaucratic obligations for the period of the
campaign, your chances of winning the election are nearly
assured.
This scenario is going to confront employers under the
Board's ambush regulation. First, the employer receives the
petition and notice that they have to appear within 8 days, or
in 8 days. Next, the employer has to find and hire a lawyer who
understands labor law. Small employers generally don't know a
labor lawyer or have ever used one. In my experience, it takes
an average of 3 business days to find and hire a labor lawyer.
If that is a weekend or a holiday, it could be 5 or 6 calendar
days.
The day before the hearing, the employer must present a
Statement of Position responding to 13 different areas of
inquiry involving factual investigation, legal analysis, the
composition of a brief, and the preparation of witnesses. If a
lawyer fails to raise an issue that impacts those 13 areas,
then that argument is waived. The NLRB has no obligation to
consider supplemental argument, and all this must occur within
8 days. That simply is not going to happen.
What else won't happen is that the employer will not be
able to operate their business because they're going to be
consumed with filling out this form. More importantly, they
will find it extremely difficult to communicate with their
employees about the organizing campaign despite having the
statutory right to do so.
Two days after the direction of an election, the employer
must provide a listing of all employees and their phone numbers
and their email address and all of that personal information.
That's a major privacy issue. I've been involved in litigation
involving violence by union officials in an organizing drive.
There are good reasons employees do not want that information
shared.
The sum and substance of this regulation is that it makes
it highly unlikely an employer can obtain legal advice and
present their mandatory positions within the maximum of 8 days.
Simultaneously, it will frustrate or prohibit the employer from
operating its business and will deny the employer meaningful
review of pre-election determinations, and it frustrates or
prohibits them from exercising their right to speak to their
employees.
More onerous is the regulation is damaging to employees.
They are unlikely to receive any other perspective other than
the union's in an organizing campaign.
That concludes my prepared testimony.
[The prepared statement of Mr. Carter follows:]
Prepared Statement of Mark A. Carter, Esq.
Good morning Chairman Alexander, Ranking Senator Murray and
Senators of this committee. On behalf of the U.S. Chamber of Commerce,
thank you, for inviting me to testify on this very important and time-
sensitive topic. The Chamber is the world's largest business
federation, representing more than three million businesses of all
sizes, industry sectors, and geographical regions.
My name is Mark Carter. I am the Labor Practice Group Chair and a
partner with the law firm of Dinsmore & Shohl LLP. I have spent most of
my career representing employers in labor relations matters. This does
not mean I never agree with unions. In fact, during my 7-year tenure as
a member of the Federal Service Impasses Panel during the
Administration of President George W. Bush, I frequently voted for
unions in matters brought before the Panel. However, because I have
represented employers in my private practice of law, I have a better
ability to testify regarding their perspective and posture as it
relates to the NLRB's ``ambush'' election regulation.
I have practiced law for nearly 29 years focusing on labor
relations law and the NLRB's ambush regulation is, without question,
the most dramatic revision to the processes surrounding that law I have
ever confronted. Mr. Chairman, I have reviewed the very technical
changes that this regulation makes to the union election process and I
conclude that the changes wrongly accelerate the election process to
the detriment of both employers and employees. But let me cut to the
chase here. I have been involved in numerous union election campaigns
and this regulation will, quite simply, stack the deck against
employers while depriving employees of information they need to make a
rational decision. While the purpose is clouded behind numerous
technical adjustments to the current process, that will be the end
result. And unfortunately we know that is indeed the very purpose of
this regulation.
With your permission, Mr. Chairman, I hope to describe for the
committee some of the challenges which will confront employers in not
only complying with the regulation, but more importantly, the
insurmountable challenge of exercising their rights as created by
Congress in the National Labor Relations Act while complying with the
regulation.\1\
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\1\ Of course, the Board's ambush election regulation does not
occur in a vacuum. Rather, the final regulation comes at a time when
the Board is pushing various policies to dramatically overhaul labor
law in favor of their union allies. Chief among these is the Specialty
Healthcare decision and the potential change in the Board's joint
employer standard.
---------------------------------------------------------------------------
i. the nlrb's ambush regulation restricts employers' statutory free
speech rights
Before discussing the Board's ``ambush'' regulation, at the outset,
I believe it is important to note that although it is not perfect, the
current representation system works well. In my experience, I have seen
unions win elections and I have seen unions lose elections. I have also
seen both employers and unions effectively avail themselves of the
Board's processes when they thought their rights were violated during a
union organizing drive. Thus, in my opinion, there is simply no need
for this regulation; which makes its true purpose--to increase union
membership rolls--that much more apparent.
As already noted, the regulation is known in the management
community as the ``ambush election'' regulation. The NLRB has described
the regulation as the ``final rule governing representation-case
procedures.'' It has been referred to as the ``ambush election''
regulation because the regulation reduces the timeframe of a
representational organizing campaign by a labor union from
approximately 40 days to as little as 10 days. The dramatically shorter
timeframe is seen by employers as an ``ambush'' in that the employer is
unprepared for and unable to effectively respond to the petition for
representation in the very short timeframe mandated by the new
regulation.
Though couched in terms of fairness and efficiency, the fundamental
principle of the ambush election regulation is that it is far easier to
win a campaign when the other candidate is unaware of the election. A
companion principle is that if the other candidate is consumed by
bureaucratic obligations for the period of the campaign, your chances
of winning the election are nearly assured.
The fundamental flaw in these principles for the National Labor
Relations Board is that they are in direct contravention to the letter
and intent of the statute they are obligated to enforce.
Section 8(c) of the National Labor Relations Act \2\ states that:
---------------------------------------------------------------------------
\2\ 29 U.S.C. 158(c).
. . . The expressing of any views, argument or opinion, or the
dissemination thereof, whether in written, printed, graphic, or
visual form, shall not constitute or be evidence of an unfair
labor practice under any of the provisions of this (Act), if
such expression contains no threat of reprisal or promise of
---------------------------------------------------------------------------
benefit.
The statute clearly anticipates that employers, unions and
employees have a right to communicate regarding the benefits of, or
negative impact resulting from, union organizing drives. The U.S.
Supreme Court has recognized that 8(c) of the Act reflects a ``policy
judgment, which suffuses the NLRA as a whole, as favoring uninhibited,
robust and wide-open debate in labor disputes.'' Chamber of Commerce v.
Brown, 554 US 60, 67-68 (2008). Similarly, our Supreme Court in NLRB v.
Gissel Packing Co., 395 US 575, 617 (1969) recognized that,
. . . ``An employer's free speech right to communicate his views to
his employees is firmly established and cannot be infringed by
a union or the National Labor Relations Board.''
The pragmatic impact of the ambush election regulation will
necessarily infringe upon an employer's free speech right by virtually
eliminating the opportunity of an employer to communicate his or her
views regarding unionization with employees. Similarly, the legislative
goal of stimulating a full and robust debate amongst employees
regarding union representation is stifled, if not eliminated, by
engineering a process for a representational election where the
employee only hears one side of the debate--and is deprived of engaging
in a full discussion with everyone involved in the debate.
At least one situation from my career representing management is
illustrative of how vitally important it is that employers are able to
tell, and employees are able to hear, a side of the story that is not
being told by union organizers. In 2011 I represented an employer that
was presented with a representation petition by the NLRB. In the course
of the union's campaign, it had represented to the employees that their
dues' obligations would be significantly less than what the union had
reported it charged members on a federally mandated form unions are
required to file with the U.S. Department of Labor. The employer then
published the LM-2 form filed by the union with the government which
established what the union actually charged for dues. Armed with this
information and other information that was disseminated by both the
union and the employer during the campaign the employees voted not to
be represented by the union. I am convinced that the free exchange of
information that took place during that campaign helped those employees
make this very important decision. When unions and employers are able
to join in free and robust debate regarding unionization, the employees
are able to learn more and are better able to determine whom they
believe and whom they discredit. This debate will not happen under the
ambush election regulation.
Indeed, upon the effective date of the ambush election regulation,
labor unions will be highly encouraged to organize by stealth without
any bilateral debate. A labor union enjoys a distinct advantage in
persuading employees regarding the benefits of union membership without
the employer's knowledge of their effort because the employer is then
unaware of any reason to communicate its views on the subject and is
unable to rebut arguments that it is unaware of. The union is thereby
in a posture to campaign toward an election that the employer is
unaware of. In this way, the regulation very much mirrors the Employee
Free Choice Act, which would have limited employers' abilities to
communicate to employees because of its card check provision.
Ultimately, the employer becomes aware that an organizing campaign
has been underway by the same mechanism existing under the current
regulations: the employer will receive a copy of a petition for a
representational election, and the election may occur in as little as
10 days after. The employer and employees are then at a distinct
disadvantage. Moreover, as set forth in detail below, the burdens upon
the employer from that point will be dramatically more difficult to
accomplish at every successive step of the process.
ii. the initial hearing and statement of position requirements are
unduly burdensome
By way of illustration, the following scenario will confront
employers under the Board's ``ambush'' election regulation. It is
important to recall in reviewing this testimony that the median number
of employees in a bargaining unit petitioning for representation before
the NLRB from 2004 through 2013 was 23 to 28.\3\ Employers who employ
this volume of employees, in my experience, do not retain in-house
counsel--much less counsel with experience practicing before the NLRB.
Indeed, most of the employers whom I have served of this relative size
were unfamiliar with any attorneys who focused on, or merely had
experience practicing law before, the NLRB. As such, the first task
facing an employer who desires to respond appropriately to a
representational petition is the task of locating and retaining
competent counsel. An ordinary timeframe for that task, in my
experience, is approximately 3 business days (if the petition was filed
on a Friday and/or holiday weekend that could extend the period to 5 or
6 calendar days.)
---------------------------------------------------------------------------
\3\ 79 Fed. Reg. at 7377 n. 46.
---------------------------------------------------------------------------
Under the final rule, the NLRB will schedule a representational
hearing within 8 calendar days of the date the petition is filed. The
day before the hearing the employer must present a Statement of
Position articulating, inter alia., all of the possible legal arguments
it desires the NLRB to consider regarding the petition.\4\ This
Statement of Position is, for all intents and purposes, a legal brief--
a combination of factual and legal analysis--which is an outrageous
requirement to ask of employers, and particularly those small employers
who do not have legal counsel. Worse, if the employer fails to include
a particular argument in the Statement of Position, those arguments are
waived, meaning that the employer will not be able to raise them at the
hearing. Clearly, this raises serious due process concerns and is
another example of how the rule stacks the deck in favor of labor
unions.
---------------------------------------------------------------------------
\4\ The scope of issues which a hearing officer would consider at
the hearing is not precisely defined, in part, because the necessary
form the Respondent--or Employer --would be required to complete
identifying the issues has not been published. The regulation
anticipates the publication of a ``Statement of Position'' form.
However, to date, one has not been available.
---------------------------------------------------------------------------
There are 13 types of information and/or positions the employer is
required to gather and present in the 7 days following a petition. A
quick review of these 13 categories demonstrates how incredibly
difficult it will be for employers--and particularly small employers--
to provide such information to the Board in such a short timeframe.
They are:
1. Whether the employer agrees that the NLRB has jurisdiction. This
is a legal issue that an employer or lawyer unfamiliar with the Act
would need to research.
2. Whether the employer is in ``interstate commerce'' as defined by
the Act.
3. Whether the employer agrees with the proposed bargaining unit.
This answer requires a legal analysis of the description and the
propriety of the types of employees [statutory employee or supervisory]
who are described.
4. If not, the basis for the employer's contention that the unit is
not appropriate. This response requires a blended factual and legal
argument focused on the type of work accomplished by the individuals
who work within the described unit and a legal basis establishing why
certain employees should not be included, certain locations should not
be included, or why the unit should be expanded to include other
employees.
5. Description of the most similar unit that the employer concedes
is appropriate. This response would require the employer to describe a
unit of its own making that is ``most similar'' to the unit described
by the union and admit that the unit is appropriate, again, precluding
the employer from challenging the propriety of the forced admission of
an ``appropriate'' unit.
6. Identify any individuals occupying classifications in the
petitioned for unit whose eligibility to vote the employer intends to
contest and the basis for each such contention. To respond to this
would be practically impossible in a large unit. Employers can object
to the inclusion of workers being included in a unit for a variety of
reasons. They may be supervisors, employed by contractors,
professionals, or meet other descriptions. Given the cumulative
obligations of the final rule, and the absence of a real opportunity to
investigate, this burden is unrealistic and not likely to be complied
with in any but the most modest of proposed units.
7. Raise any election bar. This response will require legal
analysis and factual analysis involving previous union representation
at the facility or past representational election history.
8. State the employer's position concerning the type, dates, times
and locations of the election and the eligibility period. This response
requires an understanding of what the final unit will be. The unit may
involve two or more locations of an employer's business and where that
issue is not resolved, an employer will be precluded from making a
predictive or useful response.
9. Describe all other issues the employer intends to raise at the
hearing. This response requires a comprehensive factual and legal
identification of any objection or issue the employer could articulate
and if it fails to do so, the issue is waived. This aspect of the
required position is the single most unrealistic and unjust of the
requirements of the position statement.
10. Name, title, address, telephone number, fax number and e-mail
address of the individual who will serve as the representative of the
employer and accept service of all papers for purposes of the
representational proceeding. This response will ordinarily require
retention of counsel or a representative.
11. Full names, work locations, shifts and job classification of
all individuals in the proposed unit. Beyond being a laborious task
(for example, many non-union represented employees do not have job
``classifications'') 102.63(b)(iv) will require the employer to
disclose the employees' telephone numbers, home addresses and e-mail
addresses. This disclosure subjects employees, at a minimum, to the
inconvenience of potentially unwanted and uninvited emails, telephone
calls and home visits from union organizers. However, given the
unsavory history of labor organizing, the risks associated with
divulging this personal information are greater.
12. Full names, work locations, shifts and job classifications of
all individuals in the most similar unit the employer concedes is
appropriate. As with No. 5 above, this section requires the employer to
identify and concede the propriety of the ``most similar'' unit to the
unit identified by the petitioning union. Not only is the concession
required, but an identification of the employees, their shifts and
classifications is required.
13. The list of names shall be alphabetized and in an electronic
format approved by the Board's Executive Director unless the employer
certifies that it does not possess the capacity to produce the list in
the required form.
Cumulatively the obligations recited above are in and of themselves
onerous given the allotted time for a response; but two specific
factors exacerbate the situation. First, the Statement of Position must
be presented at the representational hearing which must occur within 8
calendar days. During this time, the employer would have to retain
counsel, research and review all of the information mandated, as well
as prepare witnesses to testify to support its factual allegations.
This scenario is untenable.
The second reason is that during the period it is preparing this
information, it is presumed that the employer is, of course,
simultaneously: (1) continuing to operate its business; and (2)
exercising its rights under 8(c) of the Act to communicate with its
employees regarding the petition to further the robust and full debate
that is the goal of the statute. Under the ambush election regulation,
the reality is that neither is likely to happen. Instead, the employer
will be so consumed with populating the Board's file regarding the
petition that its ability to operate its business and its right to
communicate with its employees will be at best frustrated if not flatly
eliminated by the requirements of the regulation.
iii. the voter eligibility list raises concerns for both employers and
employees
But the employer's obligations do not end there. Within 2 days of
the receipt of a direction of election, which should follow the hearing
in rapid fashion, the regulation requires the employer to produce a
final voter eligibility list. The list, \5\ in many respects, is
anticipated by the Statement of Position, but here the regulation is
very clear that the list must contain the employees' home address,
telephone number, and e-mail address. This information currently is not
required to be produced under NLRB regulation. This sensitive and
personal information must be provided regardless of whether the
employee authorizes its production. I have personally been involved in
cases in which union officials engaged in violence when they did not
get what they wanted, so I understand why divulging this sensitive
information raises serious privacy concerns for employees.
---------------------------------------------------------------------------
\5\ This list of employees is commonly called the ``Excelsior''
list.
---------------------------------------------------------------------------
For employers, the 2-day turnaround time will be very difficult to
satisfy. Most employers, but especially small employers, do not have
large Human Resources department staffs and often rely on one person to
perform all HR functions. The task of assembling the voter eligibility
list will likely fall on the shoulders of this individual who will also
likely be occupied performing their daily activities: administering
payroll, interviewing job applicants, processing FMLA requests, meeting
with benefit vendors, etc. And what if this individual is out of town
or otherwise unavailable during this 2-day period for illness,
vacation, a funeral or training? Then the employer may be out of luck,
and submitting an inaccurate or untimely voter eligibility list could
be grounds for overturning the election results.
The regulation also eliminates the 25-day limitation on the
scheduling of an election. Currently, the NLRB prohibits the scheduling
of an election for at least 25 days after the issuance of the regional
director's decision and direction of election in order to allow time
for the Board to review any subsequent appeal. Further, the parties may
currently seek review of a regional director's order of an election as
of right on a variety of legal determinations such as who the eligible
voters will be and what the proper bargaining unit voting will be.
Under the final rule, there is no pre-election review as of right and
the regional director is free to order an immediate election within his
or her discretion as the 25-day period has been removed. Theoretically,
the regional director could direct the election to take place the day
after the hearing, or, only 10 days after the petition was filed. The
elimination of this 25-day period pragmatically eliminates the
possibility of an employer campaign, to the obvious detriment of
employers, but also to the detriment of employees, who will only hear
one side of the story.
iv. conclusion
The sum and substance of this regulation is that it:
(1) Makes it highly unlikely an employer can obtain legal advice to
compile and present mandatory positions within the maximum 8 days
between a representational petition and representational hearing;
(2) Simultaneously frustrates or prohibits the employer from
operating its business while it is gathering and preparing the
mandatory statement of position;
(3) Denies the employer meaningful review of pre-election legal
determinations by a regional director; and
(4) Frustrates or prohibits the employer from exercising its 8(c)
rights to communicate with its employees prior to the election.
However, as onerous as the regulation is to employers, it is most
damaging to employees. Employees, seemingly by design, are likely to
receive only the union's perspective in an organizing campaign instead
of the full and robust debate of the issues anticipated by Congress in
creating the Act. They will be compelled to make this profoundly
important decision on the basis of ``half '' of the facts in direct
contravention to the purposes and policies behind the law. Moreover, in
the process, their privacy rights will necessarily become diluted and
the risks attendant to that status will multiply. The ``level playing
field'' that Congress has sought to preserve in the area of labor
relations will be abandoned in a plain effort to provide labor unions
with the upper hand, and this imbalance will be the work product of a
regulatory agency without any involvement by Congress itself.
For the reasons described above, the Chamber opposes the NLRB's
ambush election regulation. Mr. Chairman and members of the committee,
we thank you for the opportunity to share some of those concerns with
you today. Please do not hesitate to contact me or the Chamber's Labor,
Immigration, and Employee Benefits Division, if we can be of further
assistance in this matter.
The Chairman. Thank you, Mr. Carter.
Ms. Milito.
STATEMENT OF ELIZABETH MILITO, SENIOR EXECUTIVE COUNSEL,
NATIONAL FEDERATION OF INDEPENDENT BUSINESS (NFIB) SMALL
BUSINESS LEGAL CENTER, WASHINGTON, DC
Ms. Milito. Thank you. Good morning, Chairman Alexander and
Ranking Member Murray and other members of the committee.
NFIB, the Nation's largest small business advocacy
organization, appreciates the opportunity to testify about the
impact on small businesses of the NLRB's new union election
rule.
Today, employers in a small business contend with anti-
discrimination laws, family medical and other protected leave
laws, wage and hour laws, privacy laws, workplace safety laws,
and labor laws. They often struggle to decipher the mysteries
of overlapping and sometimes even conflicting Federal, State,
and local laws.
The problem is compounded by the fact that small businesses
generally don't employ a human resources specialist or
attorney, or keep an outside counsel on retainer to advise the
business owner.
Imagine, then, the challenge facing America's small
businesses when it comes to understanding and complying with
labor law. Holding a union election in as little as 10 to 14
days makes absolutely no sense unless the goal is to complicate
the process and reduce an employee's chance to make an informed
decision.
During my comments today, I want to emphasize the
disadvantage that the small business owners face when it comes
to responding to an election petition.
First, the abbreviated schedule and the new rule will make
compliance exceedingly difficult for the small business owner,
who will likely need to drop all other business duties to meet
the NLRB deadlines. Without in-house expertise, small firms
will need outside help, but finding help will take time. As Mr.
Carter noted in his testimony, many employers can't name a
single labor attorney. In fact, many NFIB members with whom I
speak on a daily basis can't give me the name of a single
attorney, period, much less a competent labor attorney.
Second, besides finding counsel who can handle the
procedural and logistical issues associated with drafting and
filing a Statement of Position within about 8 days, the
employer really needs to develop and employ a strategy for
communicating the business' position to its employees. Such
communication is exceedingly tricky and fraught with landmines
to the unskilled spokesperson. I can also assure you that the
businesses with whom I work do not have any sort of anti-union
inoculation program in place before an organizing drive starts.
That's why NFIB has developed a guide in responding to a union
organizing campaign. Our little handbook is no substitute for
competent legal advice and learning about exactly what an
employer can or cannot say during an organizing drive.
Communication with employees is a protected right of
employers under the Act, and NFIB is very concerned that the
rule's short timeframe will prevent employers from effectively
communicating with their employees about the unionization
process.
Finally, NFIB is also very concerned about requiring
employers to disclose confidential information about employees
to union organizers, including phone numbers and personal email
addresses. Even assuming that the employer has this
information, employees might have provided their employer with
a personal email address, unlisted home phone number, or a
personal cell phone number for emergency contact purposes only.
Disclosing this information to a union organizer without the
employee's consent would create a breach of trust and animosity
on the part of employees and undermine employer-employee
relations. This is particularly so in a small business, where
the owner is often responsible for keeping personnel records
and other sensitive information which the employee deems
confidential.
Today, the union election process takes about 38 days,
generally enough time for unions to make their case and for
employers to make theirs, and for employees to have the
information they need from both sides to make an informed
decision. By issuing this ambush election rule twice now, the
NLRB has on two occasions failed to demonstrate any need for
change. The new rule will accomplish nothing more than the
holding of elections at lightning speed while reducing
employees' chances of making informed decisions about the
issue. For these reasons, NFIB has objected to the rule.
Thank you for the opportunity to testify here today, and I
look forward to answering any questions you might have.
[The prepared statement of Ms. Milito follows:]
Prepared Statement of Elizabeth Milito
Dear Chairman Alexander, Ranking Member Murray and members of the
committee, thank you for inviting me to testify today regarding the
impact on small business of the National Labor Relations Board (NLRB)
new union election rule. My name is Elizabeth Milito and I am senior
executive counsel for the National Federation of Independent Business
(NFIB) Small Business Legal Center.
NFIB is the Nation's leading small business advocacy association,
representing members in Washington, DC, and all 50 State capitals.
Founded in 1943 as a nonprofit, nonpartisan organization, NFIB's
mission is to promote and protect the right of its members to own,
operate, and grow their businesses. NFIB represents 350,000 independent
business owners who are located throughout the United States and in
virtually all of the industries potentially affected by these rules and
decisions.
The NFIB Small Business Legal Center is a nonprofit, public
interest law firm established to provide legal resources and be the
voice for small businesses in the Nation's courts through
representation on issues of public interest affecting small businesses.
NFIB's national membership spans the spectrum of business
operations, ranging from sole proprietor enterprises to firms with
hundreds of employees. While there is no standard definition of a
``small business,'' the typical NFIB member employs 10 people and
reports gross sales of about $500,000 a year. Roughly 15 percent of
NFIB members employ 10-20 people and approximately 28 percent have 10
or more employees.\1\ The NFIB membership is a reflection of American
small business, and I am here today on their behalf to share a small
business perspective with the committee.
---------------------------------------------------------------------------
\1\ http://www.nfib.com/about-nfib/what-is-nfib-/who-nfib-
represents (last visited February 9, 2015).
---------------------------------------------------------------------------
Currently, small businesses in this country employ nearly half of
all private-sector employees.\2\ Small businesses pay 42 percent of
total U.S. private payroll.\3\ And small businesses generated 63
percent of net new jobs over the past 10 years.\4\ Small businesses are
America's largest private employer.
---------------------------------------------------------------------------
\2\ https://www.sba.gov/sites/default/files/FAQ_March_2014_0.pdf
(last visited February 9, 2015).
\3\ Id.
\4\ Id.
---------------------------------------------------------------------------
Today, small business owners contend with antidiscrimination laws,
family, medical and other protected leave laws, wage and hour laws,
privacy laws, workplace safety laws and labor laws. They often struggle
to decipher the mysteries of overlapping, sometimes even conflicting,
Federal, State and local laws. These laws and regulations also are
expensive; according to the Small Business Administration, workplace
compliance costs small business nearly 36 percent more, per employee,
than it costs large businesses.\5\
---------------------------------------------------------------------------
\5\ Impact of Regulatory Costs on Small Firms, https://www.sba.gov/
sites/default/files/The%
20Impact%20of%20Regulatory%20Costs%20on%20Small%20Firms%20(Full).pdf
(last visited February 9, 2015).
---------------------------------------------------------------------------
The problem is compounded by the fact that small businesses often
cannot afford human resources or legal departments to give them advice
on the laws. Small business owners work hard to do what is right, but
their informal and unstructured nature and more limited financial
resources means that they sometimes require greater flexibility in
creating policies and solutions. While changes to the Board's current
rules on election procedures would affect businesses of all sizes, NFIB
is primarily concerned about the impact on the country's smallest
employers--those like the typical NFIB member who employs 10 people.
When it comes to labor issues, NFIB's constituency is very unique as
compared to most businesses represented by other trade and business
associations:
Very few NFIB members have a dedicated human resources
professional.
Even fewer, if any, NFIB members have a dedicated labor
relations expert or in-house counsel.
Typically all employment and labor matters are the direct
responsibility of the small business owner.
Imagine, then, the challenge facing America's small businesses--the
backbone of our economy--when it comes to understanding and complying
with labor law. Suffice it to say that labor law is particularly
difficult for a small business owner to understand. The current NLRB is
changing the law by reversing precedential decisions, promulgating new
rules, and expanding enforcement through increased penalties. And this
is not new or unique to the current NLRB; with each new administration
comes new direction at the NLRB. Even experienced labor lawyers
struggle to keep up with an ever-changing legal landscape. It is doubly
difficult for small business owners to understand the quirks and
nuances of labor law, which sometimes can seem illogical and
counterintuitive.
Today I will discuss how the NLRB's new election rule will impact
small businesses. I will attempt to provide insight into how small
businesses handle labor matters, and highlight some of the differences
between how small business owners and large corporations operate.
the ambush election rule
NFIB has 350,000 members across the country. They are honorable and
fair employers, and they are troubled, confused, and scared by the
decisions and rules coming out of the NLRB. Small businesses around the
country cannot understand why the NLRB is trying to pass a wish list
drawn up by organized labor. As I will discuss more below, few small
businesses employ in-house counsel--leaving them to decipher
complicated labor laws on their own. Holding a union election in as
little as 14 days makes absolutely no sense unless the goal is to
complicate the process and reduce an employee's chance to make an
informed decision.
For this reason, NFIB has stood up for small businesses to
challenge the actions of the NLRB. The Board's new ambush election rule
will significantly undermine an employer's opportunity to learn of and
respond to union organization by reducing the so-called ``critical
period,'' from petition filing to election, from the current median of
38 days to as few as 14 days. NFIB objected to the first version of
this ambush election rule when it was issued in 2011. The 2011 rule was
subsequently struck down by a Federal court, which noted the current
election process allows enough time for unions to make their case and
for employers to make theirs, after which employees have the
information they need to make an informed decision. By issuing the
identical rule again last year, NLRB completely abandoned its role as a
neutral arbiter between employer and employee--and instead created a
rule that makes unionization easier with a devastating cost to
America's job-creators.
Our Nation's labor law was conceived for the purpose of protecting
the free flow of commerce by encouraging collective bargaining to avoid
disruptions. Under the 76-year-old National Labor Relations Act (NLRA),
bargaining about employees' terms and conditions of employment can only
occur between employers and labor organizations chosen by employees to
be their representatives. The starting point for representation is
employee choice. Choice is the act of selecting freely following
consideration of options. Section 8(c) of the NLRA encourages ``free
debate on issues dividing labor and management.'' For an employer to
engage, it must first become aware. As Canadian experience proves
covert union campaigning results in significantly higher rates of union
representation over an open exchange of views by both the union and the
employer to inform employees and respond to issues raised.\6\
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\6\ Chris Riddell, ``Union Certification Success Under Voting
Versus Card-Check Procedures: Evidence from British Columbia, 1978-98''
57 ILR Rev. No. 4. (2004), p. 498.
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In its written comments in both 2011 and 2014, NFIB requested that
the Board consider small business' lack of experience, knowledge, and
resources to defend their interests regarding labor law process and
procedures. The Board ignored NFIB's comments and proceeded with its
rule. As a result, employee-informed choice and due process notice and
hearing required by the NLRA's Section 9 will be compromised,
particularly in small businesses that lack labor relations expertise
and in-house legal departments.
For a small business owner, nothing is a substitute for more time.
Small-business owners are legally bound to follow, and therefore to
know and understand, every rule and regulation that impacts them. That
includes the differing requirements promulgated by every jurisdiction
in which they operate. As a practical matter, this presumption is
fiction. No small-business owner, let alone a reasonably large staff of
experts, can recognize, understand, and implement the thousands of
pages of rules that they must obey. Further, this continuing task must
be undertaken while operating a business well enough to make its
continuation worthwhile.
Despite a legal presumption that is impossible, most small business
owners make a good faith effort to comply with all regulations and
laws. So without in-house expertise, small firms will need outside help
but finding help can take time. Because of the time it might take to
find counsel, it is imperative that small businesses be able to request
a postponement of the pre-election hearing and maintain the status quo
with regards to the election timeframe.
Unfortunately, the abbreviated schedule in the new election rule
will make compliance with pre-election procedures--including the labor
intensive project of producing a preliminary voter list with detailed
information about each voter--exceedingly difficult for the small
business owner who will likely need to drop all other business duties
to meet NLRB deadlines. And the short timeframe will lead to more
errors in election procedures by all parties and make it more likely
that objections will be filed and elections set aside. As crafted, the
NLRB's rule deprives employees of making an informed choice, strips
small businesses of due process, and compromises employee rights as set
forth in the NLRA. In contrast, the current union election process
takes a median of 38 days--generally enough time for unions to make
their case and for employers to make theirs, and for employees to have
the information they need to make a fully informed decision.
The new rule does not properly balance the rights of employees,
employers, and labor unions in the pre-election period, and the
shortened timeframes deprives employers of their due process rights
under the Act. For those employers receiving petitions, the new rules
would be virtually impossible to navigate without hiring specialized
legal counsel on an emergency basis. Between preparation of a Statement
of Position, dealing with required notice posting and managing the
tasks necessary to prepare for an election, small entities will be
running up significant legal fees at an alarming rate. Despite the
NLRB's repeated contention the rule would reduce litigation, its lack
of clarity, compressed timeframe, and shifting of administrative
burdens to employers is much more likely to increase litigation and,
therefore, expense.
This short timeframe will also not provide small business owners
with adequate time in which to obtain legal assistance and lawfully
inform their employees of the consequences of choosing union
representation. Communication with employees is a protected right of
employers, and NFIB is very concerned that the rule will prevent
employers from effectively communicating with employees about the
unionization process.
NFIB is also very concerned about the new rule requiring employers
to disclose confidential information about employees to union
organizers, including phone numbers and email addresses. Even assuming
that the employer has this information, employees might have provided
their employer with a personal email address, unlisted home phone
number, or a personal cell phone number, for emergency-contact purposes
only. Disclosing this information to a union organizer without the
employee's consent would create a breach of trust and animosity on the
part of employees and undermine employer-employee relations. This is
particularly so in a small business where the owner is often
responsible for keeping personnel records and other information, which
the employee deems confidential.
NFIB also objected in its written comments to the NLRB's decision
to limit the scope of pre-election hearing issues. The new rule will
limit the pre-election hearing to determine only whether a question
concerning representation exists. This means that many issues of voter
eligibility, including supervisor status, would be deferred to post-
election procedures. As a result, employees would vote in an election
without knowing which employees will ultimately make-up the bargaining
unit. And some employees who vote might be found ineligible to be part
of the bargaining unit. For small businesses, deferral of issues
essentially means waiver and defeat. A small business simply cannot
afford on-going litigation and legal fees.
To ensure due process in representation case matters, Congress
amended section 9 requiring the Board to investigate each petition,
provide an appropriate hearing upon due notice, and decide the unit
appropriate. With the Board's new election rule, NFIB believes that
employee informed choice and due process notice and hearing required by
Section 9 of the NLRA will be compromised, particularly for small
businesses that lack labor relations expertise and in-house legal
departments.
conclusion
Today, the union election process takes a median of 38 days--
generally enough time for unions to make their case and for employers
to make theirs, and for employees to have the information they need to
make a fully informed decision. By issuing this ambush election rule
twice, the NLRB has, on two occasions now, failed to demonstrate any
need for change. The new rule will accomplish nothing more than the
holding of elections at lightning speed, while reducing employees'
chances of making informed decisions about the issues. For all these
reasons, NFIB has repeatedly objected to the rule and has now
challenged the issuance of the rule in Federal court.
NFIB looks forward to working with the committee on this and other
workplace issues important to small business and thanks the members for
their time today.
The Chairman. Thank you, Ms. Milito.
Ms. Sencer.
STATEMENT OF CAREN P. SENCER, ESQ., SHAREHOLDER, WEINBERG,
ROGER & ROSENFELD P.C., ALAMEDA, CA
Ms. Sencer. Chairman Alexander, Ranking Member Murray, and
members of the committee, thank you for this opportunity to
testify about the National Labor Relations Board's rule to
streamline and modernize election procedures.
I have brought exposure to the NLRB representation process
and have assisted clients in well over 200 representation
petitions, with direct involvement in 27 petitions in the last
year alone.
The Board's first and utmost concern should always be the
rights of workers seeking to use its process. The Board's
efforts to update its election procedures to conform to modern
technology and existing practice furthers this purpose.
In my view, the Board's rules are not radically different
than the status quo. They reflect an attempt to standardize
some of the best practices and create consistency among
regions.
The rules reduce unnecessary delay, simplify the procedure,
and provide more notice of the process while maintaining rights
for review. This will save time and money for employers,
unions, and the government, while promoting the ability of
employees to exercise their right to vote.
When an employer does not voluntarily recognize a union,
the representation process starts with the petition being
filed. A hearing is set for somewhere between 7 and 12 days. By
requesting an extension supported by the thinnest of excuses,
the hearing is postponed up to a week. During this time, while
the employer is claiming it's trying to figure out which
employees should be in the bargaining unit, the employer's
anti-union campaign continues and goes into full swing. It is
not uncommon for employers to have anti-union consultants
talking to workers within 48 hours of a petition being filed.
Meanwhile, the region is attempting to mediate a stipulated
election agreement. A stipulated agreement resolves all or
nearly all issues without a hearing and, like most mediated
resolutions, involves compromise. But because the current
hearing process is regularly exploited, the compromising party
is almost always the union.
The alternative to the agreement is a hearing, which may
take a number of days, closing briefs a week later, and another
week to 1 month until the regional director issues a decision
and direction of election. This is followed by 25 days to seek
review. The election takes place 65 days or more after the
petition was filed. Based on this reality, unions often concede
to the demands of the employer for a unit to be defined in a
particular manner, and for the election to be held when the
employer wants.
The NLRB's rules neutralize some of this leverage by
eliminating opportunities for unnecessary litigation. The new
Statement of Position form will focus hearings. A decision
would issue faster because post-hearing briefs would be
reserved for only complicated and novel cases. Briefs are not
necessary in the vast majority of cases, which raise either a
question of supervisory status or community of interest, two
areas of settled Board law. The 25-day delay for pre-election
review would be eliminated, but each party would retain the
right to file a request for pre-election review or could choose
to seek review as part of the post-election procedure if an
issue still needs to be resolved.
When a petition goes to hearing, the election would be
about a month later rather than two. The employers call this an
ambush, but that's overly dramatic. Some elections would
undisputedly be held sooner, but not in the 11 days some
employers and trade associations have suggested. For that to
occur, the petition would have to be filed on a day other than
a Friday, the regional director would have to issue the
decision and direction of election the day the hearing is held,
and the union would have to waive all of the 10 days it's
entitled to review and utilize the voter eligibility list. This
series of events is extremely unlikely.
The employers also claim ambush in completing the Statement
of Position form as some may not have counsel or other
experienced staff available to respond. Most employers have
some type of counsel and participate in at least one trade
organization that can quickly put them in touch with labor
counsel.
More importantly in my experience, nearly all employers
have knowledge of a union organizing campaign prior to the
filing of the petition. The process should not cede workers'
rights to a prompt election because of the employer's failure
to act.
I'd like to use an example from my practice of how the new
rules would make a position difference. Last year, a union
petitioned for a unit of a single job classification. The
employer asked to reschedule the representation hearing. The
day before the rescheduled hearing, it was clear there would be
no stipulation as the employer sought to double the size of the
proposed bargaining unit. The employer informed the region it
would not appear at the hearing. The union still had to appear
and provide testimony about its labor organization status, the
Board's jurisdiction, and the propriety of the proposed unit,
which was presumptively appropriate.
The decision and direction of election issued a month later
and included a 25-day waiting period for potential review,
notwithstanding the employer's refusal to participate in the
process. The employer then delayed in agreeing to a date for an
election. Sixty-seven days passed between the filing of the
petition and the election.
If the rules were in place, the continuance of the hearing
would likely have been denied. Upon the employer's failure to
appear, the regional director could have issued a decision
without hearing testimony. The employer would have had 2 days
to produce the voter eligibility list. If the rules were in
place, the election would have been held around 46 days after
the petition was filed. An employer argument that 46 days of an
ambush is simply not compelling.
I would be happy to answer any questions, and I hope my
experience with the Board's procedures is helpful to this
committee.
[The prepared statement of Ms. Sencer follows:]
prepared statement of caren p. sencer
Chairman Alexander, Ranking Member Murray, and members of the
Committee on Health, Education, Labor, and Pensions, thank you for this
opportunity to testify about the National Labor Relations Board's rule
to streamline and modernize election procedures.
I am a partner in the law firm of Weinberg, Roger and Rosenfeld
based in Alameda, CA. Our firm, small by management standards, is one
of the Nation's largest representing unions, working people and their
institutions, including trust funds and apprenticeship programs. Our
client base includes unions representing public and private sector,
construction, agriculture, service and white collar workers. We are
proud to represent some of the largest and smallest unions in
California, and our work extends through most of the western States.
I have been with the Firm full-time since my 2004 graduation from
the University of California, Berkeley School of Law. While at
Berkeley, I served as the editor in chief of the Berkeley Journal of
Employment and Labor Law. Prior to law school, I earned my Bachelors of
Science at the New York School of Industrial and Labor Relations at
Cornell University.
In my current work, I have had broad exposure to the NLRB
representation process and have assisted clients in over 200
representation petitions with direct involvement in 27 petitions in the
past year alone. The petition and Board conducted election is the
statutory method for recognizing, through a democratic process, the
existence of a collective bargaining representative.
The National Labor Relations Act is a recognition that business of
our country flows more freely, and our economic system works better,
when workers have the protection of the Act to join together to form
unions for their collective good. The Act was and remains a response to
strikes and other disruptions to commerce. Updating the election
procedure rules to conform to modern technology and existing practice
does not alter the purpose of the Act but rather streamlines procedure
and furthers the purpose of the Act by providing more and clearer
information to workers.
For the Act to be effective in its goal of protecting workers, the
Board must do more than adjudicate or attempt to mediate disputes
between employers and unions. The Board is charged with protecting the
rights of employees to organize. Its first and utmost concern should
always be the rights of workers seeking to use its process to
establish, change or disestablish a collective voice in the workplace.
That process should be easily understood and accessible. If something
creates a barrier to free choice and self-organization, it should be
rejected or modified.
To put the Board's new rules in context, let me first explain the
basic election procedure under the current rules.
The representation process formally starts by a union filing a
request for representation. The request is made in writing, using a
provided form, and must be accompanied by a showing of interest that
the union is authorized by at least 30 percent of the proposed unit to
represent the employees for collective bargaining. This seems
straightforward, but jockeying for tactical advantage quickly begins.
The Board operates out of 26 regional offices. Each regional
director has the authority and discretion to operate her region as she
sees fit. This currently includes when the showing of interest must be
submitted to process the petition, when to set petitions for hearings,
when to grant continuances, when and how subpoenas are issued, and when
to extend filing deadlines. Practitioners are not generally aware of
these variances between regional practices.
In most regions, a hearing will be initially scheduled between the
7th and 12th day after a petition is filed. Employers request and are
routinely granted a continuance of up to a week. If the hearing is
held, it may last several days, and the parties are given the
opportunity to file a closing brief 1 week (or more) later. The record
is thus closed, at the earliest, approximately 3 weeks after the
petition is filed. The regional director then issues a Decision and
Direction of Election or an order dismissing the petition.
This generally takes at least 2 weeks but can take significantly
longer. The election is directed no earlier than 25 days after the
regional director's decision, in order to allow either party an
opportunity to seek pre-election review from the Board, even though the
Board is not required to rule on the request for review prior to
conducting the election and these requests are rarely granted. As a
result, in cases where there is no stipulation and a hearing is held,
the election is not held until a minimum of 65 days, and often longer,
after the petition is filed.
The current system provides many opportunities for employers to
delay the process. This puts enormous pressure on the union to agree to
unreasonable demands from the employer regarding the composition of the
bargaining unit and other issues. Under the current system, the
employer can force a hearing solely for delay purposes to resolve
issues not relevant to whether there is a question concerning
representation requiring an election. This delays an election weeks and
sometimes months, because the regional director does not have the
authority to refuse to take evidence in the absence of dispute
requiring resolution. By threatening to delay the election, the
employer will often force the union to accept concessions to remove or
add workers to an already appropriate unit, to include supervisors in
the unit, to agree to a disadvantageous election day or other
procedures that the employer believes are advantageous.
In many cases, the parties are able to stipulate to the scope of
the bargaining unit and to the time and place for the election because
of the efforts of the region to apply the Board's goal of an election
being held within 42 days of a petition being filed. Most employers
insist upon the 39th, 40th, or 41st day for an election. The union has
no choice but to agree to this delayed election because, if the matter
goes to a hearing without a stipulated election, the hearing will
inevitably result in delay of the election for at least several weeks
beyond the 42nd day. This is true even when there is no actual dispute
between the parties as to the scope of the appropriate unit. The threat
of delay by litigation throughout the petition procedure skews the pre-
election process.
The NLRB's new rules take important steps toward reducing the
opportunity for unnecessary delay. The regions would be permitted to
grant an extension from the hearing date, normally scheduled for the
8th day after the petition is filed, only under special or
extraordinary circumstances.
The hearing would be focused based on the petition and the
responding party's written statements (statement of position form), due
the day before, which would require: all parties to take a position on
the appropriate unit; if there is a dispute on the unit description, an
explanation of why the alternatively proposed unit is appropriate and
the originally proposed unit is not; the appropriate time, place, and
date for an election; and, confirming basic jurisdictional issues. The
only issues to be addressed at the hearing would be those that truly
present a dispute between the parties. And, based on the discretion of
the regional director, some issues that affect only a small percentage
of potential voters could be postponed for resolution until after the
election if the issue is still relevant. The hearing officer, at the
direction of the regional director, would solicit offers of proof to
determine whether the issues in dispute involve factual questions
requiring introduction of evidence.
Written briefs would not be a matter of course but rather would be
allowed only by special permission, for example, in complex cases. Most
cases involve only one or two issues, and they are typically the same
issues regarding supervisory status and community of interest.\1\ As a
result, oral closing arguments would become the norm, thus eliminating
up to 2 weeks of delay caused by waiting for transcripts and subsequent
briefs to be filed. Not only would this continue to create a complete
record, but it would reduce the expense for all parties and allow
regional directors to start their decisionmaking process sooner.
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\1\ The Board has issued several manuals and guides to the
representation process which are available on its website, to explain
both the process as well as substantive approaches to representation
issues.
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The NLRB's rule also eliminates the requirement of filing a pre-
election request for review to the Board and instead allows for all
appeals to be consolidated into a single post-election process. This
would allow not only for prompt elections but would also allow both
parties to retain the full right to request review. This creates
efficiency by allowing parties to litigate, through the post-election
review process, only those issues that remain relevant after the
election. In contrast, under the current practice, elections are
delayed for at least 25 days after a Decision and Direction of Election
to allow the parties to seek pre-election review. This would bring the
Board's rules in line with most other administrative agencies and
courts where interlocutory appeals are discouraged.
Each of these changes to the pre-election procedure will likely
reduce the number of hearings involving the presentation of evidence
since there would need to be an actual dispute involving a question of
fact for the regional director to receive evidence. The employer's
leverage to push the union into the 42d day for an election is
restricted in the absence of a true representational dispute. If the
only issue between the parties is the appropriate date for an election,
the regional director could rely on the statement of position form of
the employer and the direction in the new rules to schedule the
election for as soon as practicable and could set the election date
without taking evidence. This would, of course, take in to
consideration the requirement of posting a notice at the job site
explaining the election process, time for the employer to produce the
Excelsior \2\ list and time, if not waived, for the union to use the
list to contact employees away from the work site.
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\2\ Excelsior Underwear, Inc., 156 NLRB 1236 (1966).
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Eliminating delay serves the purposes of the National Labor
Relations Act in promoting employee free choice. Employers will benefit
because it will reduce the time period during which employees are
distracted by the campaign and upcoming election. The new streamlined
process will be less expensive for both the employer and the union and
will be easier and more consistent for the Agency to administer. It is
difficult to see how anyone is disadvantaged by eliminating unnecessary
litigation and unnecessary delays before employees can exercise their
free choice through the democratic election process.
These new procedures will equally apply to petitions that
management can file to resolve a dispute about whether the union either
initially or continues to represent a group of workers. This is the RM
procedure permitted by Board rules. And the new procedures will apply
to petitions filed by workers who wish to decertify an incumbent union.
This is the RD procedure. The management community has not pointed to
any reason why those procedures should not be modernized and
streamlined.
The rules are not ground breaking, nor, to be perfectly frank, do
they go far enough. The rules reflect practices that have been applied
in some regions already and are not particularly controversial. Most of
my practice is in the seven regions on the west coast. From my
experience, representation hearings are regularly scheduled to be held
7 days after the petition is filed. Under the rules, this would be
extended to the 8th day. Petitions are currently accepted by fax as
long as the original signatures on the showing of interest are received
by the regional office within 48 hours of the submission. Under the new
rules, petitions may be filed electronically and the original showing
of interest would have to be filed simultaneously with the petition.
When there is a dispute over scope of the bargaining unit, but the
number of employees in the disputed classifications represents a small
percentage of the unit, regional directors regularly approve
stipulations for election allowing employees in the disputed
classifications to vote subject to challenged ballots. The rule would
leave the discretion with the regional director to approve a stipulated
election agreement with some disputed classifications or positions but
would not set a strict threshold and would add the discretion to
decline to take evidence pre-election if there is only a limited
dispute that is not relevant to whether a question of representation
exists requiring an election and is not likely to affect the outcome of
the election.
The above examples show how the rules simply codify existing best
practices. By standardizing the regions' best practices, the new rules
promote predictability and efficiency and reduce the opportunity to
manipulate the procedure. Many employers have accepted these practices
although they use the threat of litigation to extract concessions on
the composition of the unit and the date of the election because they
know the union wants to avoid a lengthy hearing process. It is very
likely that, under the new rules, unions and employers will continue to
stipulate to elections, and very few cases will actually go to hearing.
The difference is that the discussions about what to stipulate to will
take place in a context where employers will not have multiple
opportunities to force delay. This will help to level the playing
field.
I would like to give a few examples from my practice of how the new
rules would have made a positive difference.
In the first case, the union petitioned on January 31, 2014, for a
small unit that included all employees within a distinct job
classification. The employer, a subcontractor of the Federal
Government, is experienced in labor-management relations and had, at
the time, six collective bargaining agreements with the international
union who filed the petition. The employer asked for an extension of
time to hold the representation hearing--``The parties are sure to
stip,'' said the representative. The day before the rescheduled
hearing, it was clear that there would be no stipulation because the
employer sought to add an additional job classification, doubling the
size of the proposed bargaining unit. The employer also informed the
region that it would not be appearing at the hearing scheduled for the
following day. The union still had to appear and provide testimony
about its labor organization status, the Board's jurisdiction over the
employer, and the propriety of the proposed unit which, under Board
law, is a presumptively appropriate unit. That was February 12. The
Decision and Direction of Election issued on March 11. It included the
mandatory 25 day waiting period to allow the parties to seek review
notwithstanding the employer's refusal to participate in the process.
The employer then delayed in agreeing to a date for the election. The
employees filed their petition on January 31. They finally had an
opportunity to vote for union representation on April 7. Sixty-seven
days passed between the filing of the petition and the election even
though the employer did not raise any issue in the pre-election
hearing.
If the rules were in place, it is questionable whether the
continuance of the hearing would have been granted. If the employer had
failed to submit the statement of position and failed to appear on the
day of the noticed hearing, the regional director could have issued a
Decision and Direction of Election without taking evidence. The
employer would have had 2 days to produce the Excelsior List. Given the
size of the unit, the union would likely have waived the right to a
full 10 days with the Excelsior List. If the rules were in place, the
election would have been held around March 10. Only 46 days would have
passed between the filing of the petition and the election. The
employees would have been able to exercise their right to vote 21 days
earlier.
As another example, in 2010 a client filed a petition for a unit of
approximately 45 automobile mechanics. Despite well-established Board
law that automobile mechanics constitute a traditional craft unit that
is presumptively appropriate, the employer insisted on a hearing where
it took the position that service writers must also be included. The
service writers would have constituted more than 20 percent of the
unit. A hearing was held 2 weeks after the petition was filed. I did an
oral closing. The employer requested and was provided with an extension
to file a post-hearing brief. In its brief, the employer abandoned its
position that the only appropriate unit needed to include the service
writers. As a result, there were only 6 positions (representing less
than 15 percent of the unit) in dispute. The regional director issued a
Decision and Direction of Election 2 weeks later. The election was
directed in the unit for which the union had originally petitioned. The
election was set for 26 days later. On the 14th day after the Decision
and Direction of Election issued, the Employer filed a Request for
Review of the Decision of the regional director.
The election was held 78 days after the petition was filed. The
employer filed objections to the election. The hearing on the
objections was set for a month later and was held over 2 non-
consecutive days. The second day was set for the employer to produce
witnesses who had not been available the first day of the hearing.
Those witnesses were not produced on the second day and the employer
disingenuously bought additional delay. The Employer filed a closing
brief a week later. One-hundred and sixty-two days after the petition
was filed, the Administrative Law Judge issued his recommended decision
overruling each of the employer's objections and directing the
challenged ballots to be counted. The number of ballots to be opened
and counted was insufficient to affect the outcome of the election. The
employer took exception to the report of the Administrative Law Judge.
The Decision from the NLRB was issued 9 months later. Four-hundred and
twenty-seven days after the petition was filed, the union was certified.
The rules, in addition to requiring the employer to commit to a
position in writing regarding the service writers, would have reduced
the time it took from the filing of the petition until the election. If
the employer had retreated from its position regarding the service
writers prior to the opening of the hearing, the remaining disputed
positions would have likely voted subject to challenge, and the
challenges would have been resolved through a post-election hearing
scheduled for 21 days after the tally of ballots. The hearing would
have been held on consecutive days--not 34 and 44 days later. The Board
would have had the discretion to deny review of the decision regarding
the challenged ballots as it was insubstantial and did not raise any
issue or general importance. Such discretion would likely have
substantially reduced the 9-month delay at the Board. Applying the
rules, the time between petition and certification would have been
reduced to around 141 days.
As is clear from these examples, the rules will unquestionably
reduce the time between the filing of a petition and an election while
providing more fairness and certainty to the process.
Employers complain that the new rules will rush elections and
deprive them of a full opportunity to give their views on unionization
to employees. The timing issue is a red herring. I have been involved
in elections under the California Agricultural Labor Relations Act
where, by statute, elections are conducted within 7 days of the filing
of the election petition.\3\ That process seems to run smoothly. The
employers, their representatives and the Agricultural Labor Relation
Board have adapted to the statutory mandate of elections within 7 days,
a provision which has been in place since the statute was enacted in
1975. Employers mount full anti-union campaigns, and the persuaders who
work in this field have tailored their message to the amount of time
provided. So too will employers adapt here--although to be clear,
nothing in the rules suggests that elections will take place anywhere
near as quickly as under California's Ag Act.
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\3\ California Labor Code 1140 et seq.
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Additionally, employers who want to mount an anti-union campaign
have plenty of opportunity to do so--their opportunity is not limited
to the period after the union's petition is filed. In virtually all the
cases where clients have filed election petitions, the employers have
been well aware of the organizing efforts prior to the filing. In many
cases, employers have already started their overt anti-union campaign.
In some cases, they have made a tactical decision, notwithstanding the
organizing campaign, to wait to see if a petition is filed. They often
wait until the last weeks before the election to mount their campaign.
Many employers have anti-union inoculation programs in place which
seek to influence employees from the date of hire and throughout
employment on a regular basis regardless of whether or not the employer
has ever been a target of union organizing. In my experience, virtually
every employer is aware of any union organizing effort and can begin
its campaign, if it chooses to engage in one, long before any petition
is ever filed or an election is set.
Finally, on the timing issue, the employer community generally
asserts that its First Amendment right would be impeded by a shorter
period between the filing of petitions and holding elections. There is
no First Amendment law that supports the idea that employers are
allowed, as a constitutional matter, the right to more extensive
campaigning. They have had the right to campaign for a union-free
workplace from the day each worker is hired and the processing of a
petition for an election doesn't change that.
Finally, for the Board's election procedures to be effective, they
must keep pace with technology and development. Several of the new
changes simply adapt the Board's rules to reflect new technology and
forms of communication. Very few businesses operate without computer
systems and email. Electronic communication has become the norm. While
the Federal courts have moved exclusively to electronic filing with
electronic signatures, the Board allows electronic filing of only
certain documents and, prior to the new rule, had not allowed for
electronic filing of petitions or showings of interest. Now that can be
done electronically. This is hardly radical.
Since the 1960s, employers have been required to provide the names
and home addresses of employees in proposed bargaining units to the
region under the Excelsior List rule. In the last decade, the list is
always typewritten and appears to have come from an electronic
recordkeeping system.
Since the 1960s, communication and technology has changed. Almost
all employers maintain computer systems for processing payroll. Under
the Fair Labor Standards Act, the pay stubs provided to employees are
required to include the employee's home address. Almost all employees
have a cell phone, email address or both. Employers keep this
information in electronic files along with home addresses. There is no
practical reason why the employer should not produce the eligibility
list in an electronic document and do so directly to the region and the
union. In the past year alone, I have seen an increasing number of
employers have provided eligibility lists by email. Modern business and
government depends on electronic delivery of information, and this
should apply to the voter eligibility list as well.\4\
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\4\ Recent Board decisions recognize the growing importance of
electronic communications. In J. Picini Flooring, 356 NLRB No. 9
(2010), the Board required intranet posting of its Order in addition to
traditional bulletin board posting. In Purple Communications, 361 NLRB
No. 126 (2014), the Board weighed the property right of the employer
against the section 7 rights of the employees and found employees could
use the employer's email system for mutual aid and protection.
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Some opponents of the Board's rules have expressed concern that
providing email addresses and phone numbers is more intrusive on
employee privacy than the current standard of producing home addresses.
This does not make sense. We choose when to read our emails, when
to respond, and, most importantly, when to delete. The same is true of
phone calls and voicemail. I would anticipate that in many cases, the
union will use less intrusive means to communicate with employees in
the bargaining unit once the Excelsior List requirement is expanded to
require employers to provide available email addresses and phone
numbers. Management has pointed to no record of abuse by unions of
voter eligibility lists.
In my experience, incomplete addresses or PO Boxes are routinely
provided, thwarting the purpose of the Excelsior list requirement. With
the fissured work place and the dispersion of workers, communication at
a single work site is less effective. For some groups of employees,
including employees who work in multiple locations throughout the year,
they use only a P.O. Box for mail. However, even if seasonal, their
employer contacts them to recall them to work using the cell phone
numbers that are already in the employer's electronic database.
Providing this information is no more intrusive than providing a home
address and works in favor of employee free choice as it provides
meaningful ways to contact employees and provide information.
In conclusion, these rules are not radically different than the
status quo. They reflect an attempt to standardize some of the best
practices and create consistency across regions. Many of the changes
attempt to align the Board procedures to procedures used by other
agencies, bring the process into the 21st century and provide clear
notice. The rules reduce unnecessary delay, simplify the procedure,
provide more notice to all parties of the process, and permit the
parties to seek Board review after the election at which time the
parties know which, if any, differences over representational issues
that may have existed prior to the election remain relevant or
determinative. This saves time and money for employers, unions and the
government, and promotes the ability of employees to exercise their
right to vote.
I would be happy to answer questions, and I hope that my experience
with the Board's procedures is helpful to this committee.
The Chairman. Thank you very much, Ms. Sencer, and thank
you for being here.
Thanks to all the witnesses.
Now we will have a round of 5-minute questions.
Ms. Milito, how many businesses does your organization
represent?
Ms. Milito. We represent 350,000.
The Chairman. Is there an average size of those businesses?
Ms. Milito. We say our average size of member business is
around 10 employees or less.
The Chairman. Around 10? There's no small business
exemption under the National Labor Relations Act, so a 10-
employee business can be organized by a union, right?
Ms. Milito. Yes, absolutely. I would point to the Board's
own statistics, too, that show the average bargaining unit size
as of 2013 was about 24 employees. I think units have gotten
smaller over the last----
The Chairman. You said you represent 350,000 small
businesses?
Ms. Milito. Three-hundred and fifty-thousand.
The Chairman. I'm just trying to imagine 350,000 small
businesses around the country, with an average size of 10
employees. The picture I get is that they're all sitting around
every day at breakfast with their labor lawyer just poised,
waiting to be able to respond to an election, when the truth is
that's probably the furthest thing from their mind, right?
Ms. Milito. They don't have an attorney. Most of the
members with whom I speak do not have an attorney. They may
have consulted somebody to draw up their articles of
incorporation, but they don't have an attorney.
The Chairman. How many small businesses of 4, 5, 6, 10, or
12 employees regularly consult their fax machine?
Ms. Milito. Very rarely, unless they're looking for a
timeshare or a business----
The Chairman. The notice of an election arrives on day 1,
and then a whole series of things begin to happen. I mean,
first you have to go find Mr. Carter, or some lawyer to advise
you. If you make a mistake--perhaps a statement to an employee
that is not strictly according to the National Labor Relations
Act rules--what happens? What's the penalty for that?
Ms. Milito. The consequences are very severe, as we've
heard from the experienced labor practitioners here. I mean,
they have to get it right. This hearing notice comes out, it's
faxed on a Friday. They don't check their fax machine until
maybe Monday.
I just want to back up there, too, and go back to the fax
machine. This is legal ramifications, to your point about the
seriousness of it. For business owners I talk with, too,
anything legal related like a complaint or a civil procedure,
they expect it to come in the mail, not through the fax.
They're just not going to be checking the fax, and then not
knowing what to do with this.
The Chairman. Mr. Carter, an employer who is about to be
organized needs counsel, right?
Mr. Carter. An employer who doesn't have counsel is in
severe jeopardy.
The Chairman. What could that cost?
Mr. Carter. Well, the cost of all that can be tens of
thousands of dollars.
The Chairman. Even for an 8-, 10-, 12-, or 14-person unit?
Mr. Carter. Absolutely. It's a matter of the hours spent by
the attorney in preparing the materials. The cost will go up,
Senator, because the amount of work that needs to be done under
these regulations, under the new regulation, exceeds the amount
of preparation that is currently anticipated.
The Chairman. Under the rule, from day one, you get a fax
copy saying you've got an election petition filed, on day 2 or
3 you've got to publicly post an election notice, and you've
got to do that correctly, right?
Mr. Carter. If you don't do it correctly and the employees
themselves decide not to vote the union in, the union can
petition for another election and put the employer through that
same expense again.
The Chairman. You've got only 1 day to get legal advice
before you post that notice or you might do it wrong. Is that
right?
Mr. Carter. Absolutely correct.
The Chairman. What's the reason for this? The median
timeframe for an election is 38 days. This reminds me of
Western movies about frontier justice and hanging judges. If
you could do it in 8 days, why not do it in 2 days, 12 hours,
or 6 hours? If the median is 38 days, and more than 95 percent
of elections occur within 56 days, then a little over a month
would seem to me to be a fair amount of time for both sides to
make their point. Under the rule, if you get to the 11th day,
the union has a right to postpone the election but the employer
doesn't. Is that correct?
Mr. Carter. It's even before that. The union can waive the
time necessary after getting the Excelsior list--the list of
employees--and that way they can make the election happen more
rapidly. What is the reason for this? The NLRB had stated that
it's because we want to cut out unnecessary delay. The U.S.
Chamber of Commerce doesn't believe that due process is
unnecessary. The Senate has confronted this issue in the past
and has concluded, as Senator Kennedy stated in 1959, 30 days
is necessary to ensure that we don't rush these people into
making this decision. It's an employee right that's at stake,
Senator.
The Chairman. Thank you.
Senator Murray.
Senator Murray. Ms. Sencer, can you respond? I'm confused
by the fax machine on Friday discussion. Can you clarify that?
Ms. Sencer. Sure. First of all, if a petition is filed on a
Friday and the union gives notice to the employer on a Friday,
as would be required under the rules now where only the region
gives notice currently, the hearing isn't scheduled for 8 days
because you wind up--it's 8 days from the time the notice is
effectively given and you don't count that day. You move over
on the weekend.
You also aren't doing it necessarily by fax anymore. Prior
to filing the petition, there's a box that the union has to
refer to, has to answer, which says whether or not notice has
been given to the employer. In almost virtually every case,
notice is given to the employer before the petition is filed
with the Board because the employees, as an act of solidarity
together, give their request for organization to the employer,
who then ignores it.
Under the new rules, in addition to fax service, email
becomes an acceptable way to serve, which is something that
employees use and employers use on a regular basis. It is
served with a Notice of Procedure which explains how to post
the notice that the Federal Government is going to require
posting with it so that you're not walking into a trap of
posting it incorrectly. Those things are taken care of by the
new documents that will explain the process to the employer, a
benefit that they do not currently have, and it makes it easier
for an employer who does not have counsel right away to be able
to respond in an appropriate manner.
Senator Murray. We've heard a lot about this rule
permitting a quicker process for elections. In fact, that's
what the title of the hearing sort of implies. Can you tell me,
in your view, is the point of this rule speed?
Ms. Sencer. No. It's to take out the parts that aren't
necessary. Right now there's a lot of gamesmanship in how this
process works. There's a lot of wrangling for position. The
employers ask for an extension for a hearing date even in a
unit of 10 people. In a unit of 10 people, the employer pretty
much knows who their supervisor is. If the unit is requesting
all 10 people in a unit of 10 people, there are not many legal
issues or any legal issues that should have to be worked out
such that it takes over a week to prepare for a hearing, or in
fact that it necessarily even requires an attorney. There are
many corporations that do these hearings without attorneys on a
regular basis.
A week delay before the hearing is set, or even having
consistency in when the hearing is set, would reduce
unnecessary delay that is currently built into the system. A
closing brief that has to be filed a week after the hearing is
held is not necessary in a unit of 10 people. The only issue
that's going to come up there, if all of your employees are
part of it, is one of them is supervisor. There are
longstanding Board rules and Board regulation as to what
defines a supervisor. A closing brief is not necessary. We get
rid of that week.
It also gets rid of the 25 days of review in-between the
time a decision of direction of election issues and the time
that the election can be held, but allows the employer, if
there is a problem or a concern about the decision of direction
of election, to seek review of that if it's still necessary
after the election is held.
Senator Murray. Well, I heard Mr. Carter say that elections
could take place in as little as 10 days, and Ms. Milito said
in as little as 14. Does the rule set a specific timeframe for
when that election should occur?
Ms. Sencer. No. There are only a couple of points that
actually have timeframes. The first is the setting of the
hearing, which is for the eighth day, unless there are
extraordinary circumstances, and then there are extensions and
discretion for those extensions. The other portion that has a
definite time period is if there are objections to an election,
they will be heard 21 days after the election is held. Other
than that, time periods are all flexible under this rule.
Senator Murray. OK. It's my understanding that the final
rule set an election hearing to begin 8 days after the hearing
notice is served. Isn't it true that a number of the Board's
regions, maybe even a majority of them, regularly schedule
hearings 7 days after the election petition is filed, and
therefore the rule just actually standardizes that existing
practice?
Ms. Sencer. I deal mainly in four regions in California.
California has four regions that cover it. In three of them,
the standard is already 7 days. In the other one, it is 10
days. This really is just conforming to the best practice
that's already out there.
Senator Murray. OK. I want to ask you one more question.
We've heard claims that providing employees' email and phone
numbers will intrude on workers' privacy. The Board accepted
tens of thousands of written comments over the course of 141
days and heard over 1,000 transcript pages of oral commentary
over 4 days of hearing. As far as you know, did any of that
voluminous commentary reveal even a single instance of misuse
of contact information contained in voter lists in the past 50
years the Board has required that such lists be provided to
unions?
Ms. Sencer. I haven't seen any commentary to show it, and
at the public hearings where I was on the panel about the new
information, there was not a single concrete example provided
of that. Currently, home addresses are provided, and unions
have every reason to keep that information confidential to
protect the workers that they're seeking to organize.
Senator Murray. Does the rule contain protections for
workers' privacy?
Ms. Sencer. Yes, because the list is limited in what it can
be used for, which it currently is not under the Excelsior
Underwear rule.
Senator Murray. Thank you very much.
The Chairman. Thank you, Senator Murray.
We'll go to Senator Isakson; after him, Senator Franken.
Statement of Senator Isakson
Senator Isakson. Thank you, Mr. Chairman.
Ms. Sencer, reading from your prepared testimony, it says,
``The request for representation is made in writing
using a provided form and must be accompanied by the
showing of interest in which the union is authorized by
at least 30 percent of the proposed unit represented by
the employees for collective bargaining.''
Is that correct?
Ms. Sencer. Yes.
Senator Isakson. To file the notice, to file the request,
the union has to have 30 percent of the number of employees
affirmatively signing a petition that they want to have this
organization take place. Is that right?
Ms. Sencer. Yes, at least, although most unions have an
internal guideline that requires them to have 65 percent before
they even file a petition. But the regulation states 30
percent.
Senator Isakson. My point on this is that's day 1 when that
filing takes place, and the hearing in 8 days is automatic?
Ms. Sencer. Yes.
Senator Isakson. Is that correct?
Ms. Sencer. Yes.
Senator Isakson. Is there any requirement of a union to
notify an employer of an intent to seek 30 percent of the
employees to get a petition to file for unionization?
Ms. Sencer. No, there isn't.
Senator Isakson. In other words, a union wanting to
organize a business can start in June 1 of a year trying to
contact employees for the purpose of getting their signatures
to go to a filing of a request. They then have 8 days before a
hearing. Is that correct?
Ms. Sencer. That is true, although if we have an average
unit of 23, we would assume that a supervisor or manager or the
owner is closely enough involved with their employees that they
are going to know. In most cases, the employees are making
public statements to their employer prior to the petition being
filed and, in fact, are making a request for voluntary
recognition, which goes unheeded, resulting in the use of the
NLRB process.
Senator Isakson. Your following sentence after the one I
just read says the following: ``This seems straightforward, but
jockeying for tactical advantage quickly begins.''
Ms. Sencer. Yes.
Senator Isakson. I take the inference there that
immediately upon the company receiving the filing and all of a
sudden they realize there's a movement afoot to organize the
company, they immediately use every tactic they can to protract
the period of time for the vote. Is that right?
Ms. Sencer. Yes.
Senator Isakson. Well, that average time is now 38 days. Is
that correct?
Ms. Sencer. Thirty-eight days for everything to go to an
election. This rule is really specifically geared to those
cases that go to hearing before they go to election. Those
cases have a much longer period of time for resolution.
Senator Isakson. OK. Ms. Milito, I should know this, and I
apologize for not knowing in advance. Is there any small
business exemption in the proposed rule?
Ms. Milito. There is not.
Senator Isakson. So somebody with 10 employees could be
affected by the rule?
Ms. Milito. Exactly, exactly.
Senator Isakson. An intent to organize a 10-employee
company could take 2 years to try and find three employees to
reach the 30 percent threshold and then have a 38-day vote in
the company once the notice is filed. Is that correct?
Ms. Milito. That's correct, yes.
Senator Isakson. The point I would make is, we established
a long time ago as a country that business needs to treat labor
right. The labor laws exist today because American business
didn't do a very good job during the Industrial Revolution of
protecting workers based on their age, their health, or the
time they worked, or anything else. During the last 100 years,
labor law has evolved to a pretty fair playing field between
labor and management to compete.
This appears to me to be analogous to the U.S. Senate
passing a resolution that says any incumbent seeking reelection
can only file 10 days before the vote. In other words, we
shorten the period of time that we have to run, we increase the
odds of us getting reelected because it takes a lot of time and
effort to get up the momentum and the money and the issues
necessary to elect a U.S. Senator. The American public would be
outraged if we tried to manipulate the rules to tilt everything
in our favor.
I would just suggest that it appears to me that this is not
a middle-down versus top-down versus middle-up proposal. This
is not trying to play favorites. This is trying to keep from
playing favorites, and 38 days is not an inordinate amount of
time for a company to have to make its case if the opposition
to the company's case is going to have an unlimited period of
time to try to reach into those employees to induce 30 percent
of them to file for the hearing.
I would just say it is tilting the playing field, and
that's the whole issue I see and the reason I appreciate your
testimony and all of you testifying today.
The Chairman. Thank you, Senator Isakson.
Senator Franken.
Statement of Senator Franken
Senator Franken. Thank you, Mr. Chairman.
There's a lot of talk about 38 days, and I think the
Chairman said that 56 days is the most for elections. Is that
what you said, Ms. Milito? You're nodding.
Ms. Milito. Yes, 95 percent of elections occur within 56
days.
Senator Franken. It's 95, so it isn't the most.
Ms. Milito. Ninety-five percent of elections occur within
56 days.
Senator Franken. OK. That's different, though. Can you give
us examples of when companies really dragged this stuff out?
Ms. Sencer. In situations where it really gets dragged out,
you're talking about an election being held about 100 days
after, and that can happen by a postponement of the hearing,
followed by a request for an extension that's granted regarding
the closing brief. We don't have any control, and nothing in
the rule designates how long a regional director will take to
issue the direction and decision of election, which is
something that is uncontrollable by either party. Then we have
25 days for review after.
In the case that an employer raises a question of review,
which is a discretionary review for the Board to take at this
point, if the Board takes that review it can either impound the
ballots or postpone the election under the current rules, and
in those situations you wind up looking at well outside of 56
days.
Even in the example that I just provided earlier, in a
situation where the employer did not show up and participate in
the process, based on how long it took for the regional
director to issue the decision, amongst other factors,
including the extension and the 25-day review period, we're
outside of that 56 days. We're at 67 days without the employer
even participating in the process.
Senator Franken. It's your feeling that these rules--when I
hear the other witnesses talk, it's like this is a radical
departure from the way the rules are now, and you seem to have
a different view.
Ms. Sencer. I do. Most cases don't go to hearing, and these
rules really affect what happens when you go to hearing. Most
cases--and by most cases, something like 91 percent have a
stipulated election agreement. When you have a stipulated
election agreement, the internal target is 42 days or less
currently. And because of that, employers work that toward the
outer edge because the cost of going to hearing is that you're
outside of 56 days. Most unions will agree to something that
results in somewhere in that 38 to 41 days because the
stipulated election agreement will be accepted by the region.
That leaves only about 9 percent of cases that are on the
outside that actually have a hearing. The ones that go to
hearing, it does extend the process by a lot of time, and this
would cut down the number of days for those cases.
Most significantly for them, it's not really the hearing
that becomes most significant. Most significant is that week
for the post-hearing brief and the 25-day review period after
the decision and direction of election issues.
Senator Franken. Thank you.
You know, I'm a member of--I've been a member of four
unions, but one of them combined after, SAG. Very helpful to me
and to the members of those unions. People who are organized
who are in unions, on average, do a lot better. They tend to
get paid more, they tend to have better benefits, health care,
those kinds of things. As we've seen, the lower and lower
percentage of people covered by unions, we've also seen--it has
coincided with this incredible inequality in income in this
country.
I think there's a correlation. What the causation is
exactly is hard to say, but I think there is some causation.
Mr. Carter, listening to the testimony today, it seems like
we're not talking about the same rules because this is so
apocalyptic coming from you guys. To me, these seem pretty
modest, especially compared to the way you describe them in
your testimony.
In your testimony you argue that the rule infringes upon
employers' free speech rights by ``virtually eliminating''
employer opportunities to communicate views against employees
forming a union. However, you also note that under the NLRA,
employers have the right to communicate with employees about
how they feel about a union and collective bargaining, which I
think is a good thing because everyone should have a right to
express their views about what collective bargaining means for
workers. In fact, employers can and many employers do
communicate with employees about their concerns about
collective bargaining even before they think the workers may
want to join a union.
I'm sorry to go over a little, but let me ask this
question. Does anything in this rule prevent employers from
communicating with employees from their first day on the job
that they, the employers, oppose efforts to form a union that
would allow workers to collectively bargain for better wages or
working conditions? Does anything in this rule prevent
employers from requiring that their workers attend one-on-one
meetings during working hours in order to persuade them to vote
against joining a union?
Mr. Carter. The candid answer, Senator, is there is no
prohibition of communicating your feelings regarding the
unions. The importance here is the context of the conversation.
Most employers in my experience, Senator, don't make a habit of
talking about unionization. They don't go to their employees
and say, ``hey, this is how I feel about unions.'' It's not a
common topic in the workplace between a supervisor and an
employee. They talk about their business. They talk about their
livelihoods and improving them.
What this regulation does--and it is radical, in my
judgment--is that in the critical period--and that's a legal
term under the National Labor Relations Board precedent--of an
organizing campaign when this is the most pressing issue on an
employee's mind, as well as an employer's, the employer has
virtually no effective opportunity to communicate its feelings
because it is consumed with its bureaucratic obligations to
prepare the form and get it ready.
In terms of gamesmanship, if you file on a Friday before a
holiday weekend a petition and it takes you 3 days to find a
lawyer, that employer is only going to have 2 days to prepare
their form.
The Chairman. We need to move on to the next Senator.
Mr. Carter. OK.
The Chairman. Thank you, Senator Franken.
Senator Franken. Thank you.
The Chairman. Senator Scott.
Statement of Senator Scott
Senator Scott. Thank you, Mr. Chairman.
I would tell you that this rule is radical, it is
ridiculous, and it is oppressive, and it applies to all
employers no matter how many employees you have. That's what I
meant. No matter how many employees you have, this rule
applies. If 95 percent of the time within 56 days we are able
to have an election or not, we're not talking about moving this
from an average of 56 days to 50. We're not talking about
moving it to 40 or 30 or 20, but to 10. If there's any sense of
an ambush as an employer trying to create jobs, help families,
this rule stands front and center to that point.
I have a short question but a long narrative, so please
bear with me, Ms. Milito, as I ask you this question. You've
highlighted it, and Mr. Carter did a pretty good job of
articulating the position at the beginning as you were going
through your opening remarks. You were talking about the actual
process that an employer goes through to try to comply with
something that he's completely unaware of, that she has no clue
of the actual process until it is hitting her in the face.
You highlighted, Ms. Milito, the profound impact that small
businesses have on our economy. There's no question the
backbone of our economy are small businesses. I am fortunate
enough to have been one of those small business owners for
about 15 years, the last 15 years before I was given this
wonderful opportunity and privilege to serve all Americans in
the U.S. Senate.
When I look at this rule and the testimony offered by many
of you here today, I am struck with a simple conclusion: The
rule drastically tilts the playing field in favor of unions and
chills both the rights of employers and employees. As a small
business owner, I never faced an attempt to unionize my
workplace. It is telling for me to imagine what this scenario
would have done had I still been in business with one of the
couple of businesses I was involved with.
I want to make sure that as I walk through the timeframe,
that this is exactly what you all are talking about. ``You
all'' means ``all y'all,'' which is plural and singular in
South Carolina.
[Laughter.]
Make sure we understand that.
The condensed timeframe between the filing of a petition
and an election to as few as 10 days, with a hearing occurring
within 8 days of the petition, would absolutely feel like an
ambush. In other words, while I'm out there trying to secure
business--I had an insurance business, a real estate business.
I flirted with a janitorial business but got out of that right
before I got started. I'm out there looking for business
opportunities, trying to hire more employees, and at the same
time I'm ambushed with this prospect of getting something
together that I'm completely unfamiliar with in 10 days. Is
that so far so good?
Ms. Milito. Very accurate.
Senator Scott. A small business owner with just a couple of
dozen employees, 24 employees, and no in-house legal counsel,
which I would imagine is completely consistent with the folks
who are members of the NFIB, I would be expected all within a
10-day window to do a couple of things.
No. 1, understand what an election petition is.
No. 2, find a labor attorney with NLRB expertise and, by
the way, one that I actually want to work with, which is--no
offense, by the way--could take a little longer than 3 to 5
days, as you talked about in the beginning. Finding one is one
thing; having one that you can actually work with and gel with,
with the most important asset you will ever have as a small
business owner, it's your business.
Most business owners go into business not to figure out tax
loopholes or how to discriminate against people. You go into
business because you have this vision of making a difference,
growing a business, being a part of the American tapestry,
talking about the American Dream. Yet you're going to do these
two things and learn what can and cannot be communicated to
your employees and figure out which employees are actually
eligible to vote.
Then you're going to submit to unions the names of eligible
employees, their addresses, email, cell numbers, work
locations, their shifts, employee classifications, and ensure
all legal arguments are raised at this point in time because if
you don't raise them now, you can't raise them later, and any
mistakes that you make, any single mistakes you make you're
going to be liable for, all in 10 days.
Am I wrong at all?
How does this lead to a fair election for the employees or
the employers when it comes to making this large of a decision
in such a small window?
Ms. Milito. It's not fair. It's not fair for either side.
It's not the way it should be or the way it was intended.
Senator Scott. Mr. Carter, any comments after that?
The Chairman. Please go ahead and answer the question. Then
we'll go on to the next Senator.
Mr. Carter. Senator, you did a wonderful job describing the
scenario, and the impact of the ambush election regulation not
only doesn't help the situation but it injures employees whom
we presume, Congress presumes benefit from hearing all sides of
the story so they can decide who is telling them the truth and
who isn't, and then they can cast their fate and exercise their
right.
Senator Scott. Thank you, sir.
Thank you all.
The Chairman. Thank you, Senator Scott.
Senator Warren.
Senator Warren. Thank you, Mr. Chairman.
Statement of Senator Warren
Congress requires the NLRB to oversee workplace elections
so that workers can vote on whether they want to be represented
by a union. According to NLRB data, more than 90 percent of the
time this works just fine. Employees and employers agree about
the process, and an election is held.
In the roughly 10 percent of the cases, I think it's
actually 9 percent of the cases where the employer has some
issue with the details of the vote, the rules on how to resolve
these concerns have turned into a mess. Over time, a hodge-
podge of different rules for resolving these disputes emerged
in each of the country's 26 NLRB regions.
Now, to fix this, the NLRB has finalized one national
regulation that draws on historic best practices and sets out
clear procedures for pre-election issues and for conducting
these elections. In other words, the NLRB is trying to make
dispute resolution more efficient and more consistent
throughout the country.
Some employers who simply oppose union votes altogether are
lobbying against the new rules.
I just want to ask, Ms. Sencer, in the roughly 10 percent
of cases where employers contest union elections, is there
anything in the new rule that would stop an employer from
having its concerns heard?
Ms. Sencer. No. The Statement of Position form allows for
each issue to be put out there. There is still a hearing
process. There is still a right to review. So everything that
needs to be resolved will still be resolved.
Senator Warren. OK. It seems like most employers, 90
percent or 91 percent, who don't contest elections, in those
cases the employers who simply want their legitimate concerns
heard if there's a dispute, they're not going to be affected in
any way by this. The 90 percent that never contest and those
who just want to make sure their concerns get heard, they're
not going to be affected by this.
For the others who are complaining so loudly, this doesn't
seem to be about fairness. It seems to be about taking
advantage of inefficiency and delay. According to a 2001 study
from the Berkeley Center for Labor Research and Education, long
delays correspond with higher rates of labor law violations.
The study points out that delay gives anti-union employers more
time to break the law by retaliating against union organizers
and intimidating workers into giving up, and evidently delay
works. Nearly a third of the time, employees who file petitions
and request an election never actually get it.
Ms. Sencer, is this finding consistent with your experience
as a lawyer who works in election cases? Have you seen a
correlation between delaying tactics and worker intimidation?
Ms. Sencer. Yes, and it's not necessarily even intentional.
This rule doesn't change anything about what people can say to
each other. Those rules are dealt with separately and go
through the case law. The longer that your line supervisors or
your lower level supervisors, who are not engaged in the
discussions with labor counsel, are going to be interacting
with employees prior to the election, the more likely they are
going to say something that runs afoul of the rules, and that's
just based on the nature of the conversations that happen on an
everyday basis.
Senator Warren. Well, thank you. You know, I'm sure that
employers who want to fight to keep their workers out of a
union prefer a broken, inefficient system that they can
manipulate to try to block workers from organizing. The NLRB
does not answer to them. Congress has directed the NLRB to make
sure that election disputes can be solved fairly between
employers and employees, and I think that's exactly what the
NLRB is doing with this rule. Thank you.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Warren.
Senator Cassidy.
Statement of Senator Cassidy
Senator Cassidy. Mr. Cohen, Senator Warren just
characterized this as a broken system, and yet you point out
that unions are winning an increasing percentage of the
elections. That seems incompatible with a broken, fixed, unfair
system. What are your thoughts?
Mr. Cohen. I think you are exactly right, Senator. The
system is not a broken system. The unions have been prevailing.
If I might add, these proposed rules will change all elections.
They are not geared to the 5 to 10 percent of the cases that go
to hearing.
Senator Cassidy. Now, can I pause you there for a second?
Mr. Cohen. Sure.
Senator Cassidy. Ms. Sencer suggests this is best
practices. She's out in California, which I will note is one of
the most anti-business States there is, with a hollowing-out
middle class. If it's best practices in California, would you,
No. 1, agree with that? Or, No. 2, if you do, then why don't
we? And if not, why not?
Mr. Cohen. I would not agree with the assertion. The
General Counsel of the NLRB runs the regional offices. There
are standards which are largely uniform. Are there individual
variations in particular cases or if somebody comes up with a
reason why they need a 3-day extension of time? But the
standards are the same. The regional directors are evaluated
based on their compliance with nationwide standards. I think
that is not the case.
If I might, two of the points that have been made in terms
of the need to help the middle class and the need to stop abuse
of employers by giving them a campaign period of time because
they will commit violations, the NLRB has specifically said
that neither of those issues have anything to do with the 733
pages of new regulations. The NLRB states that it is all about
economy and efficiency, none of the goals that have been
alluded to by numerous Senators here.
Senator Cassidy. Again and just to repeat that, the main
rationale that we've been given is not the rationale used by
NLRB to justify this.
Mr. Cohen. That's correct.
Senator Cassidy. Ms. Sencer, I keep on thinking of that
poor gal. She's got a business with 10 employees. She's not a
member. It wasn't in your written remarks, but you mentioned--
listen, everybody belongs to a trade association, or many do,
so they can call and get an attorney.
I can imagine a woman, she's got a Subway, she's got three
of them, and she's busting her rear, and she's got 15
employees, five of them are related, and those five decide that
they want to unionize. She's not a member of--she should be, of
NFIB, but she's not.
I could also imagine that the union would decide to call
the election maybe right when she had to meet with the Federal
regulator to see if she's got all of her forms right for--you
name it--the Affordable Care Act. Or maybe when she's about to
buy another business. They know she's up to her elbows in this,
and that's when they come at her.
Would that not be a wise strategy for a union if they
wished to, as Mr. Cohen says, tie them up in frenetic activity?
Ms. Sencer. Well, presuming that the union knew when she
was going to deal with her Federal regulators, and presuming
that the union knew when she was going to be purchasing another
business.
Senator Cassidy. Small business. That could happen.
Ms. Sencer. It could happen. In real terms, it's not a
question about what's most convenient for her as an owner. The
question is what is it that the majority of the employees in
that workplace are interested in----
Senator Cassidy. Knowing that the convenience of the owners
are short shrift in this answer, maybe her convenience is
important for the business to survive. Has that thought
occurred?
Ms. Sencer. In general, employees don't like to do anything
that jeopardizes their own future employment. They are aware of
that, as well.
Senator Cassidy. I know of examples of businesses that shut
down because they were organized. I can cite you examples.
There's a dairy in Baton Rouge, LA, a hulk of a building which
no longer exists because it was organized. I know that for a
fact. Your face looks quizzical. I can show you the building.
Ms. Sencer. It's not a question of the building. It's a
question of how you can so clearly draw that causation, because
most unions do not enter into a contract with an employer
that's going to result in----
Senator Cassidy. Causal. Temporal. Reported in the paper.
Again, do you agree it would be a nice strategy? If they
did actually know when she was about to open another franchise,
that this is the one we kind of want to go after because,
again, her elbows are up to that, and now she has to respond to
this? Knowing that it's not for her convenience, but still it
seems like a great strategy.
We're out of time, but I'm just saying I agree with Mr.
Scott. It seems like we have a balance, it seems like it's
tilting, and it seems like the convenience of that small
business woman should be considered if her convenience means
her ability to keep her business going.
I yield back.
The Chairman. Thank you, Senator Cassidy.
Senator Casey.
Statement of Senator Casey
Senator Casey. Mr. Chairman, thank you very much.
I want to thank our witnesses for being here.
We have some very strong disagreements, so there's no
reason to not State that.
I've heard a number of words over and over again. I've
heard the title of the hearing. I think the Chairman and I
would disagree about the first word of the title of the
hearing. You might want to read that definition later.
What I haven't heard a lot about here is voting. This Act
is supposed to lead to a process where employees vote. They
have the right to make a determination for themselves.
When this law was passed, now 80 years ago, the findings
that undergirded that statute are pretty significant to remind
ourselves. I'll just read one part.
``Experience has proved that protection by law of the
right of employees to organize and bargain collectively
safeguards commerce from injury--safeguards commerce
from injury--impairment or interruption, and promotes
the flow of commerce by removing certain recognized
sources of industrial strife and unrest.''
And it goes on from there.
It also talks about the impairment of commerce when unions
don't do the right thing.
That's what this Act is all about. When barriers are
erected in front of employees to organize or collectively
bargain, it makes it very difficult to be consistent with that
statute.
I believe that we should be doing everything we can to make
sure that employees have the right to get all the information
they need and make an informed decision.
Ms. Sencer, when I look at not just your testimony but some
of the elements of what this rule is all about, this new
policy, reducing unnecessary litigation, making the system more
efficient, making it less expensive for both sides, speeding it
up, I thought folks who supported businesses wanted to move
things along and be efficient.
I'd ask you just a couple of questions here. One is if what
you have asserted and what's been asserted here as the reasons
for promoting and implementing this new policy, that employees
will be less distracted, that the process will work better, why
do you think there's the kind of opposition to this proposal
that I would argue and I think you would argue modernizes and
streamlines the NLRB election process?
Ms. Sencer. I really think it's because people don't like
to share power, and people, owners are concerned that in the
event their employees have a true right to vote in a prompt
election where they have made their own decisions, that they
are afraid that they will have to share their power.
Senator Casey. One of the concerns I have is that there
seems to be a real hostility to modern forms of communication--
email, telephone numbers, information like that that you would
think that both sides would want to have the benefit of.
The notion here that--and it's why I have a disagreement
with the first word of the title of the hearing. I even looked
it up. The first word in this hearing is defined as ``surprise
attack by people lying in wait in a concealed position.'' I
hardly think that the possibility, the prospect of an election
in a workplace is the equivalent to someone being in a
concealed position and surprising someone by an act of violence
or something else. That's really a stretch.
I hope we can continue to debate this and have legitimate
disagreement. What I can't understand is the basic hostility to
getting more information in front of people.
In my own experience--and this is anecdotal; it's not a
study or a specific set of data. In my experience in the health
care context in Pennsylvania, in a couple of instances, not all
but in a couple of instances where folks at hospitals were
trying to organize, they would hire a law firm which was a
union buster. I'm not asserting that law firms here are, but in
that context the conclusion I reached was that that law firm
was hired simply to bust the union.
I know that's strong language. I know people don't like
that, but if we can disagree about my phrase before the word
``union'' or after the word ``union,'' then we can probably
have a legitimate disagreement about the title of the hearing.
Thanks, Mr. Chairman.
The Chairman. I want to thank the witnesses for excellent
testimony and for joining us today, and the Senators for
participating.
Senator Murray, do you have any closing remarks?
Senator Murray. I just want to thank all of our Senators
who participated, and our panelists too, for your insight into
this.
I hope at the end of the day that we all agree that when
workers want to vote to join a union, that the election process
should be fair and transparent. I know we have a disagreement
on this issue, and I'm sure we'll hear more about it, but I
hope at the end of the day that we remember our role is to make
sure that workers have a voice in that process.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Murray.
I listened carefully to Senator Casey's definition of the
first word in the title. I think it's pretty accurate. The rule
forces a union election before an employer has a chance to
figure out what's going on.
We have differences of opinion. We'll have a chance to
continue that on the floor of the Senate, when we'll ask the
Senate to disapprove the NLRB's new rule and prohibit the Board
from issuing any similar rule, which will come after the
congressional recess.
The hearing record will remain open for 10 days. Members
may submit additional information and questions for the record
within that time if they would like.
All of us thank the witnesses for their time and for coming
here today.
The committee will stand adjourned.
[Additional Material follows.]
ADDITIONAL MATERIAL
Prepared Statement of Senator Collins
Thank you, Chairman Alexander and Ranking Member Murray,
for holding this hearing on the National Labor Relations
Board's (NLRB) so-called ``ambush election'' rule. In the 112th
Congress, I was an original cosponsor of a joint resolution
that disapproved of a nearly identical rule issued by the NLRB.
On December 15, 2014, the NLRB published new regulations --
which will become effective on April 14, 2015--significantly
limiting the time for holding union representation elections.
This change would result in employees making the critical
decision about whether or not to form a union in as little as
10 days. The rule also requires employers to disclose personal
employee contact information to possible union representation,
which raises real privacy concerns.
Back in 1959, then-Senator John F. Kennedy explained that
``the 30-day waiting period [before a union election] is an
additional safeguard against rushing employees into an election
where they are unfamiliar with the issues . . . there should be
at least a 30-day interval between the request for an election
and the holding of the election'' to provide ``at least 30 days
in which both parties can present their viewpoints.'' I agree
with our former President and Senator. An expedited timeframe
would limit the opportunity of employers to express their views
and leave employees with insufficient information to make an
informed decision.
According to the fiscal year 2014 NLRB Performance and
Accountability Report, union representation elections were held
in a median of 38 days. That is already below the NLRB's stated
target to hold 95 percent of its elections within 56 days.
Therefore, this begs the question of why yet another regulation
is even necessary.
Our Nation's job creators, the engines of any lasting
economic growth, have been saying for some time that the lack
of jobs is largely due to a climate of uncertainty, most
notably the uncertainty and costs created by new Federal
regulations.
According to the National Federation of Independent
Business, the National Association of Manufacturers, and the
U.S. Chamber of Commerce, this ambush election rule will
negatively affect employers and employees, and small businesses
in particular. Small business owners often lack the resources
and legal expertise to navigate and understand complex labor
processes within such a short timeframe. In our current
economy, it is critical that we do everything possible to
advance policies that promote U.S. economic and job growth. I
fear this rule will do the opposite.
The NLRB's goal should be to ensure fair elections and a
level playing field for all. Again, Mr. Chairman, thank you for
calling this hearing.
------
Socety for Human Resource Management (SHRM),
Alexandria, VA 22374-3499,
February 10, 2015.
Hon. Lamar Alexander, Chairman,
Hon. Patty Murray, Ranking Member,
Senate Health, Education, Labor, and Pensions Committee,
428 Dirksen Senate Office Building,
Washington, DC 20510.
Dear Chairman Alexander and Ranking Member Murray: The Society for
Human Resource Management, the U.S. Chamber of Commerce, the Coalition
for a Democratic Workplace, the National Association of Manufacturers,
and the National Retail Federation thank you and the other
distinguished members of the Senate Health, Education, Labor, and
Pensions (HELP) Committee for holding today's full committee hearing on
how the National Labor Relations Board's (NLRB) recent ``ambush''
elections rule will harm both employers and employees.
As organizations representing workplaces across the country and
across industries, we believe the ``ambush'' rule violates the National
Labor Relations Act, the Administrative Procedure Act, and the Free
Speech Clause of the Constitution of the United States. We have joined
together to file a lawsuit in U.S. District Court for the District of
Columbia challenging the rule, and asking the court to vacate and set
aside the rule. We respectfully request that our attached complaint,
motion for summary judgment, and memorandum of points and authorities
in support of that motion be entered for the record.
Sincerely,
Society for Human Resource Management,
U.S. Chamber of Commerce,
Coalition for a Democratic Workplace,
National Association of Manufacturers,
National Retail Federation.
Attachment
Socety for Human Resource Management (SHRM),
Alexandria, VA 22374-3499,
February 10, 2015.
Hon. Lamar Alexander, Chairman,
U.S. Senate,
Committee on Health, Education, Labor, and Pensions,
428 Dirksen Senate Office Building,
Washington, DC. 20510.
Dear Chairman Alexander: On behalf of the Society for Human
Resource Management (SHRM) and more than 275,000 HR professionals, I am
writing to express strong support for S.J. Res 8, a joint resolution of
disapproval that would block the National Labor Relations Board's
(NLRB) representation election rule. SHRM greatly appreciates your
leadership on this important issue and commends you for convening a
hearing on ``Ambushed: How the NLRB's New Election Rule Harms Employers
& Employees.''
The representation election rule is commonly referred to as the
``ambush'' election rule because of its focus on speeding up the union
election process at the expense of employees and employers who will
have insufficient time to understand and address the relevant issues
about the impact of unionization. SHRM has long supported the
fundamental right, guaranteed by the National Labor Relations Act
(NLRA), of every employee to make an informed, private choice about
whether or not to join a union. While estimates vary, elections could
occur in as little as 11 days after the employer is notified of an
election petition. In addition, the rule severely limits an employer's
ability to challenge aspects of the process prior to the election
thereby promoting speed of elections over all other goals and
requirements of the NLRA. At issue is the opportunity for a full and
informed debate before an election is held.
SHRM is particularly concerned about the rule's mandate that
employers provide their employees' personal phone numbers and email
addresses to labor organizations. HR professionals, who are tasked with
protecting employee privacy and personal information, have expressed
grave concern throughout the rulemaking process about providing this
information to organized labor.
In addition, the boards of 96 SHRM State councils and chapters lent
their names in support of SHRM's comments. Over 4,600 individual SHRM
members submitted their own comments cautioning the NLRB about the
impact this proposal would have on fair representation elections.
Unfortunately, in issuing its final rule, the Board did not make
substantial changes based on concerns identified by SHRM and other
stakeholders.
Given SHRM's serious and pervasive concerns with this rule, the
Society was compelled to file a lawsuit challenging the NLRB ambush
election rulemaking--notable in that it is only the third time SHRM has
challenged a Federal rule in court. SHRM's lawsuit, filed in the U.S.
District Court for the District of Columbia, asks the court to deem the
rule unlawful and set it aside because it violates the NLRA and the
Administrative Procedure Act, as well as the First and Fifth Amendments
of the Constitution of the United States.
As you know, the Congressional Review Act (CRA) establishes
procedures for the Congress to disapprove of Federal agency rules by
enacting a joint resolution of disapproval. It is critically important
for Congress to quickly pass a joint resolution of disapproval under
the CRA so this damaging rule cannot take effect. There is also
precedent for Congress successfully using the CRA's procedures to
nullify Federal rules--OSHA's ergonomics rule was blocked in 2001.
Again, thank you for sponsoring this important joint resolution of
disapproval. SHRM strongly recommends its swift passage.
Sincerely,
Michael P. Aitken,
Vice President, Government Affairs.
______
Response to Questions of Senator Kirk by Charles I. Cohen
Question 1. This new rule issued by the NLRB specifically limits
the ability for employers and employees to determine the bargaining
unit in question prior to a Union election. What happens if there is a
dispute over the members of the bargaining unit and the Union wins the
election? How would an employee who cast a contended ballot be treated?
Answer 1. Assuming the Union wins the vote tally, the new rule will
limit the ability of an employer to obtain a regional director or Board
determination on contested employees prior to the Union being certified
as the bargaining representative. Specifically, under the new rule, the
regional director will only entertain and resolve post-election
disputes over voter eligibility and bargaining unit inclusion if the
number of disputed ballots is great enough to affect the election
outcome. 79 Fed. Reg. 74, 391, 74,393, 74,413 (Dec. 15, 2014). In other
words, if the number of disputed individuals is sufficiently small so
that their votes would not alter the outcome, the regional director
will decline to address their status and instead issue a certification
to the Union and require the employer to recognize and bargain
thereafter.
The Board has stated in the new rule that an employer has only two
possible post-election avenues to have unresolved voter eligibility and
bargaining unit inclusion issues addressed, including: (1) mutual
agreement with the Union as part of the first contract bargaining or
(2) a unit clarification (``UC'') petition filed after negotiations
begin, which can be resolved by a regional director, subject to
discretionary review by the Board.
Question 2. Is there precedent for this lack of clarity in the
establishment of a bargaining unit?
Answer 2. Although under existing rules it is possible for a
bargaining unit to be certified with voter eligibility and inclusion
issues left unresolved, the new rule will lead to a significant
increase in the number of bargaining units that are not clearly defined
following a union election victory. In this regard, the new rule's
expansion of uncertain bargaining units post-election is unprecedented,
as under prior procedures, the Board was required to take evidence on
voter eligibility and bargaining unit inclusion disputes before the
election, and in most cases regional directors rendered a decision on
those matters prior to an election, subject to potential Board review.
Now such disputes, in the vast majority of cases, will be wholly
deferred for evidence-taking and decisionmaking purposes, until after
the election, and resolved only if the number of disputed ballots is
sufficient to affect the election outcome.
Response to Question of Senator Kirk by Mark A. Carter
Question. Under the NLRB rule, employers are required to furnish
employee names, personal telephone numbers, personal email address, job
classification, shift times, in addition to mailing address within 2
days following direction of election. These so-called ``Excelsior
lists'' are required without significant direction on how the Union may
use the contact information following the election. What, if anything,
would prohibit a Union from selling this private contact information to
third parties?
Answer. While the final regulation of the National Labor Relations
Board \1\ would prohibit the use of Excelsior Lists for purposes other
than matters ``related'' to a representation proceeding, the NLRB has
expressly chosen not to identify any meaningful enforcement mechanism
for that direction.
---------------------------------------------------------------------------
\1\ 79 Fed. Reg. 74,308, et seq. (Dec. 15, 2014) (to be codified at
29 CFR Parts 101,102 and 103).
---------------------------------------------------------------------------
In its Order implementing the ambush election regulation \2\ the
NLRB wrote:
---------------------------------------------------------------------------
\2\ (Id.)
even when the voter information is disclosed to the non-
employer parties in a particular case, such parties will not be
able to use it for whatever purpose they desire. Rather, they
will only be allowed to use employee contact information for
limited purposes. As discussed below, the final rule provides
that ``parties shall not use the list for purposes other than
the representation proceeding, Board proceedings arising from
it, and related matters.'' Thus, employees need not fear that
their contact information once disclosed, will be shared with
or sold to entities having nothing to do with the
representation proceeding. And should such misuse of the list
occur, the Board will provide an appropriate remedy, as
---------------------------------------------------------------------------
discussed further below.
79 Fed. Reg. 74,344 (Dec. 15, 2014) (emphasis supplied)
However, employees should be concerned for a variety of reasons.
First, the ``appropriate remedy'' the NLRB references that would
punish misuse of their contact information is expressly not identified
by the NLRB. In the section of the Order implementing the final rule
dealing with ``Restriction and Remedies for Misuse of the Voter List,''
the Board recognizes that,
it goes without saying that non-employer parties would
run afoul of the restriction if, for example, they sold the
list to telemarketers, gave it to a political campaign or used
the list to harass, coerce or rob employees.
79 Fed. Reg. 74,358 (Dec. 15, 2014)
However, while strictly warning ``non-employers'' (aka Unions) that
the practice is prohibited, and repeatedly announcing its authority to
fashion an ``appropriate remedy,'' the NLRB avoids the obligation to
identify what an appropriate remedy is.
the Board has concluded that it would not be appropriate
at this time to specify a remedy, or set of remedies, that
would be appropriate in all situations.
79 Fed. Reg. 74,359 (Dec. 15, 2014)
As such, the agency has expressly identified a right and failed to
identify a corresponding remedy. Beyond that, the NLRB goes on to
identify several scenarios where it does not deem circumstances
appropriate to announce that specific remedies are available.
Union misuse of voter list after an election by selling it
to telemarketers should not warrant setting aside an election result;
\3\
---------------------------------------------------------------------------
\3\ 79 Fed. Reg. 74,359 (Dec. 15, 2014).
---------------------------------------------------------------------------
Misuse of voter list should not always warrant setting
aside an election result; \4\
---------------------------------------------------------------------------
\4\ Id. The NLRB did not conclusively rule out the potential that
misuse of the voter list could result in the setting aside of an
election but plainly indicated that a distinct--and unidentified--
remedy was more appropriate. ``At the same time, the fact that misuse
of the list could not warrant setting aside the results of an election
does not mean that the misuse should be remedied in a manner
appropriate to the circumstances;'' (Id.)
---------------------------------------------------------------------------
Misuse of voter list should not prohibit a future
organizing drive targeting the victimized employees by the perpetrating
Union; \5\
---------------------------------------------------------------------------
\5\ Id.
---------------------------------------------------------------------------
Misuse of voter list should not always result in
injunctive proceedings by the General Counsel to prohibit the
continuation of the violation of the prohibited misuse of information
by a Union;. \6\
---------------------------------------------------------------------------
\6\ Id.
---------------------------------------------------------------------------
Misuse of the voter list should not always be construed as
a violation of `` 8(b)(1)'' of the Act; and \7\
---------------------------------------------------------------------------
\7\ Id. Again, the NLRB recognized that misuse of the information
``may be a violation of Section 8(a)(1) or 8(b)(a) [sic]'' However, the
Agency also wrote the same conduct may be ``objectionable.'' In the
final analysis the NLRB offers little or no guidance as to whether the
misuse of the voter list is remediable at all.
---------------------------------------------------------------------------
Unions should not be required to establish and follow
security protocols to safeguard employees' personal information. \8\
---------------------------------------------------------------------------
\8\ Id.
Far from deterring unions desiring to, inter alia., sell employees'
personal contact information to telemarketers, among other abuses of
that sensitive information, the NLRB both declines to identify one
single remedial measure that should consistently be utilized to address
misuse, and, provides an extensive list of misuse of the employees'
information for which it would take no remedial action.\9\ The
prohibitions authored by the NLRB could easily be interpreted as
endorsements of the misuse of employees' personal information.
---------------------------------------------------------------------------
\9\ It is noteworthy that in an interpretive memorandum from the
General Counsel of the NLRB issued on April 6, 2015 (GC-Memorandum 15-
06) the chief attorney for the agency writes that ``(a) party may
decide to raise allegations of misuse by filing objections to the
election or an unfair labor practice charge.'' (Id. at p. 36) However,
as the NLRB Order opines that misuse of the voter list will not always
warrant setting aside an election result or constitute a violation of
8(b)(1) the utility of such an allegation is highly questionable, if
not absent.
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This is particularly concerning given the propensity of labor
unions to misuse employee information in the past. On March 19, 2015
the Education and The Workforce Committee of the U.S. House of
Representatives issued a press release reciting several examples of
union misuse of personal information of employees. \10\
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\10\ http://edworkforce.house.gov/news/document single/aspx?
Document ID=398591.
In 2006 Jennifer Parrish was visited by a stranger asking her
to sign a union authorization card at her home. She repeatedly
declined to sign the card at which point the stranger became
angry. To get him to leave she agreed to sign;
When a Patricia Pelletier and her co-workers decertified the
union representing them, union operatives responded by
allegedly forging her signature on numerous magazine
subscriptions and consumer product solicitations. She was
billed thousands of dollars by magazines jeopardizing her
credit rating;
When 33 AT&T union members resigned from their union and
ceased paying dues, the union posted their names and social
security numbers on a publicly accessible bulletin board
stating that the employees had resigned from the union and
ceased paying dues.
Now, the agency charged with policing the misuse of such personal
information is vastly expanding its proliferation and is identifying no
consistent remedial measures to insure the security of that
information.
In sum, while the NLRB has announced that non-employer parties to
representation proceedings--or unions--are prohibited from misuse of
this sensitive information by selling it to telemarketers, that agency
has failed to identify any consistent remedial measure to enforce that
prohibition. Moreover, the agency has identified an extensive listing
of scenarios where unions would not be held accountable as a result of
engaging in the misconduct that they assert is prohibited. The agency
has identified a right with no assured remedies.
Thank you for the opportunity to address the committee on this
important issue for workers in our Nation. I am happy to supplement
this response at your invitation.
Response to Questions of Senator Kirk by Elizabeth Milito
Question 1. The NLRB has required that Unions send the filed
petition to the employer via fax. This is not only a nearly 200-year-
old mode of communication, but also a potentially unreliable one. What
impact on election preparation will this requirement have on small
businesses? Particularly those companies founded since the invention of
more instantaneous and reliable methods of communication that may not
rely on fax machines in their normal operations.
Answer 1. Today's fast-paced work environment, which depends on the
use of computers, cell and smart phones makes fax machines increasingly
outdated and unnecessary in the business environment. Email, including
PDF transmission of documents, has become the preferred method of
communication with small business owners who contact me for
information. Moreover, fax machines can fail and since they are rarely
used, it might be days before an employee or the business owner notices
that a machine has run out of paper or that the cartridge is out of
ink. In addition, documents transmitted via fax may not be as safe and
secure as the sender and/or recipient would like. For this reason, I
find business owners prefer to have documents emailed since this form
of communication better ensures that documents are received by the
intended recipient and do not end up in the wrong hands or sitting on
the fax machine or an employee's desk unread.
Question 2. Given that the option to send both an email and a fax
as notice of the petition being filed lies with the Union, the employer
could be intentionally left in the dark if they do not have immediate
access to a fax machine. Under what scenario would the Union be likely
to send both an email and a fax, when it is neither mandated, nor in
their interests to do so?
Answer 2. Since time is of the essence in responding to a petition,
it would most certainly work to the Union's advantage to give the
employer as little amount of time as possible to respond. By sending
the petition by fax, without email transmission, the Union better
ensures that the employer will be delayed in learning about the filing
of a petition. The shift in the last 10 years toward e-commerce means
that fax machines are not routinely checked in the office and a
transmission might sit for days unnoticed whereas an email is likely to
be read much sooner.
Response by Caren P. Sencer to Questions of Senator Alexander and
Senator Kirk
senator alexander
Question 1. On Monday, February 9, 2015, NLRB Chairman Pearce
issued a statement in which he said ``it is undeniable that modernizing
and streamlining the [union election] process is far overdue.'' Given
the statistics we heard during the hearing--that the timeframes for
more than 95 percent of union elections surpass the NLRB's own goals,
and that unions are winning 64 percent of union elections--do you find
Chairman Pearce's statement accurate?
Answer 1. I believe that Chairman Pearce's statement is correct.
The percentage of elections that Unions are winning is irrelevant to
whether the procedure is working as efficiently as it could or should
be for all parties.
The internal guideline to conduct elections within 42 days was
adopted in 1997 by the General Counsel's office. The goal was set
within the confines of the existing regulations and then current
technology. It was clear that elections could be conducted in
significantly less time but 42 days was set as a goal because it was
believed to be achievable. Now, unnecessary delay and gamesmanship can
be further reduced. Thus, the statistic that 95 percent of elections
are held within the NLRB's own goal is misleading because that goal
took into consideration inefficient rules, obsolete technology, and
then permissible delay tactics.
Question 2a. In your testimony, you claim --as the NLRB did in its
final rule announcement--that the rule would expedite the union
representation process. Are you at all concerned that rushing through
elections and not addressing important issues up front may lead new,
longer delays in first contract negotiations?
Could the rule actually make the overall process longer by
increasing the number of cases that must be litigated in court? (For
example, ``refusal to bargain'' cases.)
Answer 2a. I do not believe that the final rules will result in
``rushing through elections.'' Additionally, in my experience, the
discourse prior to an election does not address the issues that are
later addressed in contract negotiations. Much employer campaigning has
to do with matters unrelated to the workplace issues that need fixing
in negotiations. Much employer discourse consists of union bashing,
promises of change and entreaties for ``one more chance'' to make
things right without a union. Completing the election process faster
will result in employers being encouraged to get down to contract
negotiations sooner where workplace issues can be discussed and
resolved. It is unlikely that a shorter period between filing a
petition and certification would have an impact on the average time
until a first contract is reached. The issues that are resolved through
the election procedure have to do with the scope of the unit to be
represented, not the ultimate bargaining positions of the parties.
Question 2b. One tenant of the Employee Free Choice Act was to have
an outside arbitrator impose all terms of a labor agreement on the
parties if they failed to reach an agreement in 90 days. Is this an
idea that you support? Please explain.
Answer 2b. Although the Employee Free Choice Act is outside the
scope of my testimony, I'm happy to respond to this question. An
arbitrator's imposition of terms of a first collective bargaining
agreement is a provision of the California Agricultural Labor Relations
Act. In that procedure, the arbitrator, who always must be an
``outsider'' to be impartial, reviews the final proposals made by both
parties and the background information which supports them, including
bargaining history, wage rates in the area, and the relative size of
the employer to others in the industry in the geographic area, and can
impose a first contract when the parties are unable to reach agreement.
Frequently, the use of a mediator or arbitrator in any contract
negotiation results in an agreement that both parties support. The
analysis is the same in negotiations for a first contract. Anything
that helps parties reach a resolution which both find acceptable should
be encouraged. The threat of an imposed contract keeps both parties on
track for good faith negotiations. I would support some form of first
contract arbitration as part of a package of labor law reform to
modernize the National Labor Relations Act. It has worked in California
under our Agricultural Labor Relations Act and there is no reason it
would not work at the Federal level.
Question 3. Under the new NLRB rule, an employee could be forced to
vote on whether to form a union without knowing which fellow employees
would be a part of the bargaining unit. As many as 20 percent of the
proposed bargaining unit may be contested--but the NLRB would still
force an election. Are you concerned about situations where an
employee's ``yes'' or ``no'' depends on which other employees would be
cast in the group? (For example, cashiers may not want to bargain with
loading dock employees because they have different priorities.)
Answer 3. First, a point of clarification: the 20 percent rule
referenced in Senator Alexander's question was taken out prior to the
final rule. However, the final rule does provide discretion for the
regional director to allow some percentage, that she finds reasonable
in the given specific case, to vote by a challenge ballot procedure.
While employees have some choice in designing their unit, that
choice has always been limited by the National Labor Relations Act
which requires the unit to share a community of interest. That long
standing rule has served to create bargaining units in various
industries that make sense for employees, employer and unions.
I am not aware of any situation in which a group of employees have
said, ``I don't want to be in the unit if that other group of employees
is too'' and the union has not petitioned for them separately to ensure
that their interests are kept separate. In addition, in larger groups
that include multiple classifications when it comes to having their
interests heard, each has an opportunity to be heard at the bargaining
table and have their views represented.
Question 4. In your testimony, you State that there is ``no record
of abuse by unions of voter eligibility lists,'' but are there examples
of unions misusing employees' personal information in other contexts?
(For example, as retaliation for rescinding union membership or for
filing decertification petitions.)
Should employees have the ability to ``opt-out'' of having their
contact information sent to union organizers' Please explain.
Answer 4. I have no direct or indirect knowledge regarding any
cases of unions misusing employee's personal information in any
context. I have never heard of it happening. The union is a voluntary
organization. If employees, either at a specific employer or other
employers in the industry or the area, knew that the union was misusing
confidential or private information, the union would be punished in the
market place by people refusing to affiliate with it. The union has no
incentive to misuse employee information as it results in harm to its
credibility with the very people it is looking to serve. In my
experience unions keep information about members and others strictly
confidential for these reasons.
There should not be any process to opt-out of having contact
information sent. The goal of the Excelsior rule is to provide each
individual employee an opportunity to receive all available information
so they may make an informed choice. One of the original goals of that
rule was to make the election process work better so that both sides
would have a list of eligible voters to assure that only eligible
voters would cast votes. Without that list, it was difficult to achieve
that goal since neither party nor the NLRB knew who was eligible.
Having all employees on the Excelsior list streamlines the process for
all parties as each knows who is designated to vote.
In addition, in the event there was an opt-out process, unless that
process was completely overseen by the National Labor Relations Board,
thus adding work for its already stretched staff and further delaying
the election procedure, the employer would know which employees opted-
out. The employer would have the opportunity to coerce employees to
opt-out, and could use the choice of employees to opt-out as a way to
survey the bargaining unit. This polling regarding employee's union
sympathies would violate Federal law.
As was stated at the hearing, the National Labor Relations Act does
not exempt small employers based on the number of employees, as most
labor and employment statutes do.
Question 5a. Should the NLRA be brought into line with other labor
and employment statutes in this way?
Answer 5a. It is unclear what other labor and employment statutes
are referred to in the question. Title VII of the Civil Rights Act of
1964 and the Americans with Disabilities Act apply to employers of 15
employees or more. The FLSA applies regardless of the number of
employees if the commerce threshold is met ($500,000 in sales per year)
or the employer is engaged in interstate commerce. In some States, like
California, the thresholds are even lower with either no exemption
based on the size of the employer for general employment law and five
employees for anti-discrimination laws.
Although unions sometimes petition for units smaller than 5 or 15,
these employees are generally part of a larger organization. For
example, there may be eight mechanics at a garage where a fleet of
school buses is housed. Although the unit of mechanics is small, the
employer may have over 50 employees. This is not a small employer and
would be subject to all labor and employment laws. All employees are
entitled to the protection of the NLRA as long as they are in a
bargaining unit larger than one and certain jurisdictional standards
are met. In this way, the NLRB's refusal to take jurisdiction over any
petition seeking only one employee or over an employer with low annual
revenue is a de facto exemption for small employers. The right to
engage in collective action should not be limited because of the size
of the employer that you work for.
Question 5b. Do you agree that the burdens of this rule will fall
most heavily on small employers that are unfamiliar with labor law?
Answer 5b. In my experience, unions are not organizing small
employers. The continual repetition of the impact of this rule on small
employers is just a red herring. If an employer is small, the burdens
are small. For example, producing an Excelsior list, providing the
names of contact information of members in the sought for bargaining
unit, is an easy task if there are only eight individuals in the
bargaining unit and is, in fact, a more difficult task when you have a
larger employer with a larger unit of employees involved. While it is
true that larger employers are more likely to have in-house resources
or counsel on retainer or individuals inside their organization that
are likely to be addressing these types of issues, it is not a
significant burden for an employer with eight employees to pull from
its electronic system or to simply type out the contact information of
those eight individuals.
senator kirk
Question. Under the NLRB rule, employers are required to furnish
employee names, personal telephone numbers, personal email address, job
classification, shift times, in addition to mailing address within 2
days following direction of election. These so-called ``Excelsior
lists'' are required without significant direction on how the Union may
use the contact information following the election. What, if anything,
would prohibit a Union from selling this private contactformation third
parties?
Answer. This question is similar to question 4 from Senator
Alexander and results in the same response. Any union that sold its
private information to a third party would wind up unable to organize
any future workers and would likely feel push back from its current and
existing membership. There is no incentive for a union to do this. Even
in the event that a union is not successful in organizing a group of
employees, they would have no incentive to sell the information because
it would ruin their ability to organize these employees at any other
point in time. And you can be sure that if a union did sell contact
information, management would make an issue out of it in future
campaigns. The requirement to produce an eligibility list has existed
for decades and I have represented hundreds of unions that have
received such a list. None of those unions have misused the list in any
way. It just has never happened.
[Whereupon, at 10:48 a.m., the hearing was adjourned.]
[all]