[Senate Hearing 117-197]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 117-197

                         THE RIGHT TO ORGANIZE:
                      EMPOWERING AMERICAN WORKERS
                       IN A 21ST CENTURY ECONOMY

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

                                HEARING

                                 OF THE

                    COMMITTEE ON HEALTH, EDUCATION,
                          LABOR, AND PENSIONS

                          UNITED STATES SENATE

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             FIRST SESSION

                                   ON

 EXAMINING AMERICAN WORKERS IN A 21ST CENTURY ECONOMY, FOCUSING ON THE 
 RIGHT TO ORGANIZE, AFTER RECEIVING TESTIMONY FROM MARK GASTON PEARCE, 
 GEORGETOWN LAW CENTER WORKERS' RIGHTS INSTITUTE, AND HEIDI SHIERHOLZ, 
   ECONOMIC POLICY INSTITUTE, BOTH OF SILVER SPRING, MARYLAND; JYOTI 
  SAROLIA, ELLIS HOSPITALITY, TEMECULA, CALIFORNIA, ON BEHALF OF THE 
INTERNATIONAL FRANCHISE ASSOCIATION; AND GRACIE HELDMAN, PANDORA, OHIO.

                               __________

                             JULY 22, 2021
                               __________

 Printed for the use of the Committee on Health, Education, Labor, and 
                                Pensions
                                
                                
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                               __________

                    U.S. GOVERNMENT PUBLISHING OFFICE
                    
46-777 PDF                 WASHINGTON : 2023           
        
        
        
          COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS

                    PATTY MURRAY, Washington, Chair
BERNIE SANDERS (I), Vermont          RICHARD BURR, North Carolina, 
ROBERT P. CASEY, JR., Pennsylvania       Ranking Member
TAMMY BALDWIN, Wisconsin             RAND PAUL, M.D., Kentucky
CHRISTOPHER S. MURPHY, Connecticut   SUSAN M. COLLINS, Maine
TIM KAINE, Virginia                  BILL CASSIDY, M.D., Louisiana
MAGGIE HASSAN, New Hampshire         LISA MURKOWSKI, Alaska
TINA SMITH, Minnesota                MIKE BRAUN, Indiana
JACKY ROSEN, Nevada                  ROGER MARSHALL, M.D., Kansas
BEN RAY LUJAN, New Mexico            TIM SCOTT, South Carolina
JOHN HICKENLOOPER, Colorado          MITT ROMNEY, Utah
                                     TOMMY TUBERVILLE, Alabama
                                     JERRY MORAN, Kansas

                     Evan T. Schatz, Staff Director
               David P. Cleary, Republican Staff Director
                  John Righter, Deputy Staff Director
                            C O N T E N T S

                              ----------                              

                               STATEMENTS

                        THURSDAY, JULY 22, 2021

                                                                   Page

                           Committee Members

Murray, Hon. Patty, Chair, Committee on Health, Education, Labor, 
  and Pensions, Opening statement................................     1
Braun, Hon. Mike, a U.S. Senator from the State of Indiana, 
  Opening statement..............................................     3

                               Witnesses

Pearce, Gaston, Mark, Executive Director of the Workers Rights 
  Institute, Georgetown University Law Center, Silver Spring, MD.     7
    Prepared statement...........................................     8
Shierholz, Heidi, Ph.D., Senior Economist and Director of Policy, 
  Economic Policy Institute, Silver Spring, MD...................    17
    Prepared statement...........................................    18
Heldman, Gracie, worker, Pandora, OH.............................    23
    Prepared statement...........................................    25
Sarolia, Jyoti, Principal and Managing Partner, Ellis 
  Hospitality, Temecula, CA......................................    27
    Prepared statement...........................................    29

                          ADDITIONAL MATERIAL

Statements, articles, publications, letters, etc.

Tuberville, Hon. Tommy:
    Entrepreneur Magazine Series On Negative Impacts of PRO Act..    62
    State Policy Network Pro Act Letter..........................    63
    National Association of Wholesaler-Distributors Letter.......    66
Braun, Hon. Mike:
    Coalition For A Democratic Workforce.........................    68
    APP-Based Work Alliance......................................    73
    National Association of Manufacturers........................    75
    National Ready Mixed Concrete Association, National Stone, 
      Sand & Gravel Association, Portland Cement Association.....    75
    Pro Act Joint Trades Letter..................................    77

                         QUESTIONS AND ANSWERS

Response by Heidi, Shierholz to questions of:
    Senator Lujan................................................    68
    Senator Casey................................................    68
Response by Gracie, Heldman to questions of:
    Senator Lujan................................................    69
Response by Mark, Pearce to questions of:
    Senator Lujan................................................    69
    Senator Burr.................................................    71
    Senator Tim Scott............................................    72
Response by Jyoti, Sarolia to questions of:
    Senator Tim Scott............................................    72

 
                         THE RIGHT TO ORGANIZE:
                     EMPOWERING AMERICAN WORKERS
                      IN A 21ST CENTURY ECONOMY

                              ----------                              


                        Thursday, July 22, 2021

                                       U.S. Senate,
       Committee on Health, Education, Labor, and Pensions,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10 a.m., in room 
430, Dirksen Senate Office Building, Hon. Patty Murray, Chair 
of the Committee, presiding.
    Present: Senators Murray [presiding], Casey, Baldwin, 
Kaine, Hassan, Smith, Rosen, Lujan, Hickenlooper, Cassidy, 
Murkowski, Braun, Marshall, Tuberville, and Moran.

                  OPENING STATEMENT OF SENATOR MURRAY

    The Chair. Good morning. The Senate Health, Education, 
Labor, and Pensions Committee will please come to order. Today 
we are holding a hearing on empowering workers and the right to 
organize and collectively bargain. Ranking Member Burr is not 
here at this time. Senator Braun will be taking his place. 
Welcome to our Committee this morning. We will each have an 
opening statement and then we will introduce the witnesses. 
After the witnesses give their testimony, Senators will each 
have 5 minutes for a round of questions.
    While we were unable again to have this hearing fully open 
to the public or media for in-person attendance, live video, as 
always, is available on our Committee website at 
help.senate.gov. If anyone is in need of accommodations, 
including closed captioning, please reach out to the Committee 
or the Office of Congressional Accessibility Services.
    Today's hearing is long overdue. We have been through 4 
years of attacks on workers' rights from the previous 
Administration. It has now been 12 years since the minimum wage 
was raised and it has been over 70 years since the National 
Labor Relations Act, the cornerstone of our Nation's labor 
laws, was significantly updated. 70 years ago there was no 
Internet. Approximately one-third of women participated in the 
labor force.
    Racial segregation was allowed under the law, and the 
average retirement age and average life expectancy were both 
around 68 years. While our ways of working and our workforce 
may have changed, the need for workers to be able to join 
together and have a voice in their wages and working conditions 
without fear remains as important as ever. Our labor laws are 
overdue for an update, and the COVID-19 pandemic has only made 
this need more clear and more urgent. This crisis has changed a 
lot over the last year and a half, but it has also shown us how 
much it needs to be changed. This past year, we witnessed the 
most unequal economic crisis in modern history unfold as women, 
workers of color, workers with disabilities, and workers with 
low incomes disproportionately lost jobs, wages, and more.
    We witnessed how important it is workers have paid family 
sick and medical leave, a livable wage, and quality, affordable 
childcare and health coverage. We witnessed growing inequality 
as millions of people lost jobs last year, and while the top 1 
percent gained about $10 trillion in wealth. An increasing 
wealth inequality wasn't a pandemic-only phenomenon. It has 
been happening for decades. And all of this gave us an 
important reminder of the difference unions and the right to 
organize and collectively bargain make in countering this kind 
of extreme inequality.
    Here is what unions mean. Unions mean higher wages. In 
2020, non-union workers were paid about $0.84 per $1.00 
compared to union workers. Unions mean better benefits. For 
example, union workers are more likely to have paid sick days. 
And while only around two-thirds of nonunion workers can get a 
retirement plan, health care plan, and prescription drug 
coverage through their employer, over 9 in 10 union workers had 
these benefits, and union workers were almost twice as likely 
to have the option of an employer sponsored dental plan. Unions 
also means safer workplaces. Unions work hard to educate 
members about their rights to a safe workplace, and as a 
result, unionized workplaces are much more likely to be held 
accountable for health and safety violations.
    Perhaps one of the most important aspects of union 
representation is knowing you have other workers in your corner 
to help make sure you are treated with respect and dignity in 
the workplace, knowing you have got backup to make sure you 
will not only be paid fairly, but treated fairly. In short, 
unions mean workers who are the ones truly making our economy 
run have better wages and benefits that help them support their 
families and live their lives. That is why I am proud 
Washington State has the fifth highest rate of union membership 
in the Nation. But unfortunately for workers across the 
country, barriers to workers seeking to form or join a union 
have been mounting in recent years.
    We have seen employers try and at times succeed at 
misclassifying workers to deny them their rights, preventing 
workers from organizing and collectively bargaining through 
complicated contracts and subcontracts, and undermining union 
elections in too many ways to count. Meanwhile, efforts at the 
National Labor Relations Board to educate workers about their 
rights and enforce worker protections have dwindled, 
particularly as Republicans have worked to skew the Board 
against workers in recent years.
    I am really hopeful that the new NLRB nominees that have 
come before our Committee recently will help start to fix this 
because the results of this campaign against workers' rights 
have been deeply damaging, especially in light of this 
pandemic. Right now, only one in eight essential workers is 
represented under a collective bargaining agreement, and some 
of the highest risk industries during this pandemic, health 
care, food, agriculture, have the lowest unionization rates.
    Stronger organizing and collective bargaining rights could 
have helped change the trajectory of this pandemic and saved 
lives by making sure that workplace safety was a priority, more 
workers had paid sick days, and more workers had the wages and 
benefits that they needed to stay economically secure, like 
quality, affordable health care and a reliable retirement plan. 
In short, the pandemic made it clear than ever, we have got to 
make it easier for workers to exercise their right, their right 
to collectively bargain, and for unions to fight for the people 
they represent. Doing so will help us build our economy back 
stronger in a way that works for families and communities, not 
just those at the top. And it will help us build back fairer.
    As data show, union memberships reflects the racial, 
ethnic, gender, and age diversity of America's workforce. 
Almost half of workers represented by a union are women, and 
nearly 4 in 10 union members are workers of color. When it 
comes to addressing racial inequities, data show Black union 
workers earn on average 16 percent more than their nonunionized 
counterparts. When it comes to the gender pay gap, women who 
are not represented by a union are paid $0.78 on the dollar 
compared to men. But women who are represented by unions are 
paid $0.94 on the dollar.
    When it comes to creating more inclusive workplaces for 
people with disabilities, union covered workers in general are 
more likely than nonunion employees to request accommodations 
regardless of disability status. So as we work to rebuild our 
economy in the aftermath of this pandemic, our work has to 
include steps to finally update our labor laws in order to 
protect and empower workers. Because we know our economy is 
stronger when working families are stronger, and our working 
families are stronger when unions are stronger.
    That is why I introduced the Pro Act earlier this year, and 
I am pushing it hard to get across the finish line. But we 
can't stop there. We need to raise the minimum wage, provide a 
comprehensive paid leave program, and more. It is also why I 
supported the unionization vote of Amazon workers in Alabama, 
and I support the continued fight for unionization of Amazon 
workers in Washington State and workers across our Country. And 
it is why we are having this hearing today.
    I look forward to hearing from our witnesses today, thank 
you all for being here, about how we finally bring the NLRA 
into the 21st century, and how we can ensure every worker is 
able to form a union--form or join a union so they can bargain 
for better wages and benefits and safer workplaces in which 
they are treated with respect. With that, I will turn it over 
to Senator Braun for his statement.

                   OPENING STATEMENT OF SENATOR BRAUN

    Senator Braun. Thank you, Madam Chair. When I was asked to 
fill in for a Ranking Member Burr, it is an honor to do it. 
Anyone in the U.S. Senate, I think I am most recently off the 
pavement of actually living through these issues we are going 
to talk about here today. I come from Main Street. I chose not 
to go to Wall Street to move back to my hometown. My wife did 
the same thing and has had a small business in our downtown for 
43 years this September. When I ask her what she pays in terms 
of wages to her own employees, and they are like family, they 
have been there for a long time, way above what the average 
wage rate would be across most states, even in a low cost of 
living State like Indiana. And my discussion is going to center 
around one premise.
    I had a company that had 15 employees for 17 years. I know 
every aspect about what it takes to be successful in an 
enterprise, and it starts with treating your employees like 
family. And if you are going to grow into an enterprise like 
what I just left two and a half years ago, it is because you 
have done all those things. And if you do it right, you don't 
need a union. And I am for unions because you need them in 
places where you are up against a monolith of big business. But 
the premise today is going to be that whatever we do for 
workers' rights, which I believe in 100 percent, to be able to 
have them organize and express those, don't kill the golden 
goose that has made jobs for union workers possible is a small 
business.
    Remember, every company in this country, from General 
Motors to Amazon started probably with an employee or two and 
did it in a hardscrabble way like I did for 17 years, where my 
paycheck was generally lower, way under what it would have been 
for running a business or an enterprise simply because of the 
fact that you deal with the economics at hand. And when you 
think about what it takes to get an enterprise large enough to 
have a union there representing employees, it is a perilous 
pathway. Most don't make it. And you need to measure, if we 
want the Pro Act to be considered, is it going to take out what 
allows unions to form in the first place or what allows a 
little business to become a big one.
    My contention is, and from what I am hearing across the 
country in terms of small businesses, they think that this puts 
them in peril. And if you don't have small businesses that are 
healthy, you are not going to have big businesses and you are 
not going to have employment bases that are large enough to 
need unions in the first place. So I am worried that this is a 
one-size fits all like many things we do here in DC, and that 
for the reasons I am going to mention here now, it is going to 
be detrimental to small businesses.
    Small businesses, most of them, don't get a return on 
investment. They live out of that business for their wage, for 
their livelihood. And if anything we do here, if it puts that 
in peril, it is a misguided effort from the top down and my 
opinion is not needed. Ms. Sarolia, who has an enterprise in 
California, a place that largely roles like the Federal 
Government in thinking you can do things from the top down--it 
is why many businesses are leaving the state. It is why many of 
us who consider doing business there do it with a second 
thought. We got there 10 years ago in my little business that 
now has become a big business and that where we pay the highest 
starting wage in my hometown, in the lowest unemployment 
county, you don't feel welcomed in places like that tell you 
how you need to operate your business and many times do it in a 
way that is going to chase you away from the very thing you are 
wanting to promote.
    I said earlier I support the freedom to unionize. I think 
there is a place for it. You got big business. I have been one 
of the most outspoken here as a Senator that is a different 
type of entity than a Main Street enterprise. You may need to 
use dynamics differently to deal with them. But I want to list 
a few of the things we got. We have got 27 right to work 
states. And this pretty well says that it is going to get rid 
of that if it can. To me, you are taking--you are getting rid 
of the choice of whether you want to join a union or not. 
Unions, which I think should have the freedom to organize, got 
to make their case though. You are going to end up in a place 
like Illinois where there is not a right to work law. Think 
about this, their union membership has only gone up 1 percent 
since we put in right to work laws across the country. Union 
membership in Indiana has gone up 24 percent in a right to work 
state.
    Violating the rights of workers across America to prop up 
an outdated system that benefits Washington elites is not the 
answer. A union power grab--I am not going to say that. I think 
that is kind of a hot phrase. I try to avoid them here. But if 
we are trying to grow anything for the sake of growing it, 
there is not merits to the case. It is misguided. The Pro Act 
will force employers to provide unions with work shift 
information and employees' personal contact information during 
organizing elections. Independent contractors such as gig 
workers will be made employees under the Pro Act, limiting 
these workers' ability to pick jobs and schedules that work for 
them and their families.
    The Pro Act will put the burden of proof on employers to 
prove that they didn't interfere in a union election rather 
than the party claiming that they did. The Pro Act will change 
the very definition of an employer by codifying the 2015 
standard expanding joint employer status. This means that many 
small businesses would be considered joint employers. 
Litigation against franchise businesses nearly doubled due to 
this in 2015, and that is another issue to contend with. Many 
of the reasons folks don't go into a place like California is 
because the trial lawyers in many cases run the administrative 
dynamic there, chasing businesses away, losing jobs.
    For all of these reasons and many more, it is no surprise 
that American organizations across the country are strongly 
opposed to the Pro Act. Right here, a folder of over 280 
organizations that represent small business have written 
accordingly. I ask unanimous consent to submit the eight 
letters here representing more than 280 groups opposing the Pro 
Act.
    The Chair. Without objection.

    [The information referred to can be found on page 68]

    Senator Braun. Though, Government was much of the problem 
for small businesses last year, I acknowledge that without it, 
with what we--without what we did here through the PPP--in the 
moment of crisis, there is a need for it. That doesn't mean you 
take what we did, and you broaden in a way that has already 
made a small business one of the most difficult things to grow 
into a large one. And if the Pro Act does anything to make it 
harder to start and grow a small business, everything that you 
are trying to do through the Pro Act becomes immaterial, and it 
is actually working against what you are really concerned with.
    The Chair. Thank you. We will now introduce today's 
witnesses. Our first witness has decades of experience in labor 
law protecting workers' rights. Mark Pearce is a former Board 
member and Chairman of the National Labor Relations Board. He 
was first appointed to the NLRB by President Barack Obama in 
2010, served two terms on the Board concluding in August 2018. 
He is now a Visiting Professor and the Executive Director of 
the Workers' Rights Institute at Georgetown University Law 
Center.
    Before that, he was a Senior Scholar and Lecturer at 
Cornell University's School of Industrial Labor Relations. Mr. 
Pearce, thank you for joining us. I look forward to your 
testimony. Next, I will introduce Dr. Heidi Schierholz, an 
economist with deep understanding of how workers' rights 
strengthen our economy as a whole. Dr. Schierholz is the Senior 
Economist and Director of Policy at the Economic Policy 
Institute, a nonprofit think tank focused on the needs of 
workers. She served as Chief Economist for the Department of 
Labor under President Obama, where she helped develop and 
execute initiatives to boost workers' rights, wages and 
benefits, protected workers' savings, and increased workplace 
safety.
    Dr. Schierholz, we are pleased to have you with us today 
and look forward to hearing from you shortly. Our next witness 
is someone who knows firsthand some of the barriers workers are 
up against when they fight to exercise their rights. Gracie 
Heldman joins us from Pandora, Ohio. She works for the 
Heartside Food Solutions. It is an industrial bakery with over 
1,000 employees, which provides goods for familiar names like 
Nabisco, General Mills, and Kellogg.
    Mrs. Heldman has worked at the bakery for over 33 years in 
the packing department, and she has spent 20 of those years so 
far fighting to form a union. Mrs. Heldman, thank you so much 
for joining us. I look forward to hearing from you about your 
experience. And now I will turn it over to Senator Braun to 
introduce our final witness, Jyoti Sarolia.
    Senator Braun. Thank you, Madam Chair. Jyoti Sarolia is a 
principal in Ellis Hospitality, which is now a third generation 
hotel company based in California. Their portfolio currently 
has seven hotel properties throughout California, a definition 
of a small business that has made it to the next level. The 
company was built and named to honor New York City's Ellis 
Island, where her family members had entered during the early 
years to pursue the American dream. Ms. Sarolia has grown up in 
the hospitality industry and even lived in a hotel owned by her 
extended family until the age of eleven.
    She started learning about hotel operations, everything 
from housekeeping to the front desk. She has served as an 
Asian-American Hotel Owners Association Ambassador to the South 
Pacific region since 2015 and has been part of a franchise 
organization there since 2017. Since 2009, she has been 
involved in the Choice Hotels Owners Council.
    She lives in Temecula, California, I will say that is close 
enough, and attended San Francisco State University. True 
example, someone that moves to this country, a country based 
upon immigrants and entrepreneurs. And look forward to hearing 
your thoughts on the Pro Act today.
    The Chair. Thank you. Ms. Sarolia, thank you for joining us 
today to share your experience. With that, we will hear our 
witness testimony.
    Mr. Pearce, we will begin with you.

  STATEMENT OF MARK GASTON PEARCE, EXECUTIVE DIRECTOR OF THE 
 WORKERS' RIGHTS INSTITUTE, GEORGETOWN UNIVERSITY LAW CENTER, 
                       SILVER SPRING, MD

    Mr. Pearce. Chair Murray, Senator Braun, and Members of the 
Committee, and my fellow panel of witnesses, thank you for the 
opportunity to testify today on the right to organize on 
empowering U.S. workers in the 21st century. As the 
introduction indicates, I was a Former Chairman of the National 
Labor Relations Board, and I have had close to 23 years of 
service with that agency and more time practicing before that 
agency while in private practice.
    Congress passed the National Labor Relations Act, also 
known as the Wagner Act, in 1935, out of recognition for 
workers' rights, fundamental rights. Despite its flaws, the 
NLRA was the first law to provide these protections. Among its 
fundamental purpose was to encourage collective bargaining, 
protect workers' rights to organize, and provide workplace 
democracy, so as to preserve worker integrity and balance and 
the relationship between labor and management. In that respect, 
the NLRA has lost its way. Because of lack of reform and years 
of manipulative interpretation, the Act has increasingly become 
ineffective in the 21st century. Workers are being classified 
outside of the Act's protection.
    Concerted activity for mutual aid or protection is being 
restricted and reinterpreted. And through the reversal of 
decades of precedent, union access to employees and members has 
been all but extinguished. Policy isolation at the NLRB has 
created a confusing atmosphere where workers and businesses 
remain uncertain about their rights and obligations. Rules 
relating to conduct of union elections are subject to radical 
change with the change of administrations. Meanwhile, even when 
a union succeeds in becoming a bargaining representative, 
employers' unfair labor practices that aim to undermine 
employees' chosen bargaining representative can have a 
corrosive effect that linger for years.
    Studies have shown that within 1 year after an election, 
less than 50 percent of newly organized units have obtained 
their first collective bargaining agreement. There are also 
procedural obstacles that are in the way of worker rights. 
Workers are subjected to--are expected to know their rights, 
yet employers cannot be mandated to post notices advising 
employees of these rights because this agency is a reactive not 
a proactive agency.
    Workers file charges with the NLRB and often are left to 
wait for a significant period of time. By that--by the time, 
justice is reached, or a board order is enforced, years have 
gone by. By then, workers have lost homes, lost the respect of 
their family, and most of all, they have lost faith in a system 
that was designed to help them. The accent, inadequate remedies 
for unlawful conduct not only failed to deter or fully remedy 
violations, but in fact incentivize unlawful practices. The 
National Labor Relations Act provides only limited remedies to 
violations, the ancillary limits, remedies to a cease and 
desist order or a notice posting. And where somebody is 
terminated, they get back pay and reinstatement, yet other 
worker protection agencies provide for compensation, such as 
punitive damages and compensatory damages.
    Title VII provides that--and the FLRA provides that. Unfair 
labor practices against undocumented workers go unreported 
entirely. The Supreme Court held that undocumented workers are 
employees within the scope of Section 2-3 of the Act. We can 
celebrate that. But they also in Hoffman Plastics, state that 
undocumented workers can't receive the remedy. They can't get 
the back pay that they lost, and in fact, they will lose their 
position. They are not entitled to be reinstated. And in all 
likelihood, if they used the process of the Act, they will get 
deported. I will wrap up by saying this, because, of course, I 
have plenty more to say.
    Workers continue to need the protection of the labor laws. 
The pandemic underscored that need. Workers' rights and 
protections are meaningless if the laws are not responsive to 
workers and business models of the 21st century. This statute 
had its 86th birthday on July 5th. Let's celebrate by blowing 
out the candles, cutting the cake, and retooling this needed 
vital piece of legislation for modern times.
    Thank you very much for giving me the opportunity to 
testify before this Committee today. I look forward to your 
questions.

    [The prepared statement of Mr. Pearce follows:]
                prepared statement of mark gaston pearce
    Thank you for this opportunity to testify before you today 
regarding ``The Right to Organize: Empowering American Workers in a 
21st Century Economy.'' This is a special privilege for me because I 
have spent half of my forty-year career working with the National Labor 
Relations Board (NLRB or ``the Board''), first as a lawyer, then 
ultimately as Board Member and Chairman. The NLRB is the agency charged 
with enforcing the foremost labor law in the country, the National 
Labor Relations Act (NLRA or ``the Act''). The NLRB has, however, been 
hampered in effectively enforcing the NLRA because of the inadequacy of 
its remedies.

    My first legal position after law school was the NLRB's Buffalo, 
New York Regional Office. For the better part of 15 years I conducted 
representation elections for workers as an NLRB agent. I was a Hearing 
Officer who heard evidence and made determinations about objectionable 
conduct affecting an election, and, as a Field Attorney and District 
Trial Specialist, I investigated and prosecuted violations of the NLRA. 
I was privileged to represent workers and unions at two private law 
firms in Buffalo. One of the firms, co-founded by me, was counsel to 
numerous local unions and several national unions in a variety of 
industries. In April 2010 I was honored to be appointed by then-
President Barack Obama to the NLRB as Board Member, and later 
designated Chairman. I served in these positions for over 8 years. As I 
will fully discuss in my testimony, my experience has made me certain 
that our current system is not working and that all workers need 
greater rights to organize and have a voice in wages and working 
conditions.
  The NLRA has as Among its Fundamental Purposes the Encouragement of 
   Collective Bargaining and the Protection of the Worker's Right to 
                                Organize
    Congress passed the NLRA, also known as the Wagner Act, in 1935 out 
of recognition that workers' rights were fundamental rights. Despite 
its many flaws, the NLRA was the first law to provide these protections 
even if not for all workers.

    Section 1 of the NLRA declares that it shall be the policy of the 
United States to encourage ``the practice and procedure of collective 
bargaining'' and to protect ``the exercise by workers of full freedom 
of association, self-organization, and designation of representatives 
of their own choosing, for the purpose of negotiating the terms and 
conditions of their employment or other mutual aid or protection.'' \1\
---------------------------------------------------------------------------
    \1\  29 U.S.C. Sec.  151.

    The NLRA was Established in 1935 to Achieve Workplace Democracy
    Historic employer practices of union-busting and refusals to 
bargain collectively agitated workers, leading to strikes and increased 
industrial unrest and burdening commerce in the process. The drafters 
of the Wagner Act believed that improved industrial democracy, achieved 
by codifying the rights to bargain collectively and organize for mutual 
aid or protection, would ``eliminate the causes of certain substantial 
obstructions to the free flow of commerce.'' \2\
---------------------------------------------------------------------------
    \2\  29 U.S.C. Sec.  151.

    By encouraging accessible democratic processes in the workplace, 
the Wagner Act gave employees the power to influence the terms and 
conditions of their employment and addressed the inherent inequity in 
bargaining power between a sophisticated employer and an employee 
acting alone. The drafters intended for more democracy in the workplace 
to lead to less wage depression and increased wage-earner purchasing 
power, thereby eliminating (or at least softening) the underlying 
economic conditions that drove workers to strike and to violence in the 
pre-Wagner era. \3\
---------------------------------------------------------------------------
    \3\  29 U.S.C. Sec.  151. See also Kenneth G. Dau-Schmidt, et al., 
Labor Law in the Contemporary Workforce 40, 47 (3rd ed. 2019).

    The non-economic impact of industrial democracy mattered, too; the 
creation of private law through worker-led collective bargaining showed 
good faith government support of a central tenant of the labor 
movement--dignity at work. \4\ Industrial democracy is the means 
through which industrial peace may be achieved. Correspondingly, cases 
from different eras demonstrated that courts were using various 
manifestations of industrial democracy to improve the experiences of 
employees. The Supreme Court when it upheld the establishment of the 
NLRA in NLRB v. Jones and Laughlin Steel Corp., \5\ drew heavily from 
the Commerce Clause to uphold the constitutionality of the NLRA while 
also acknowledging the plight of workers and Congress' intent to use 
industrial democracy to protect employees. The Court stated:
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    \4\  Dau-Schmidt, et al., at 48.
    \5\  NLRB v. Laughlin Steel Corp., 301 U.S. 1 (1937).

        `` . . . the statute goes no further than to safeguard the 
        right of employees to self-organization and to select 
        representatives of their own choosing for collective bargaining 
        or other mutual protection without restraint or coercion by 
        their employer. That is a fundamental right.'' \6\
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    \6\  Id. at 33.

    The Court's protection of collective bargaining was a key signal 
that it endorsed industrial workplace democracy as a means of workers, 
who in this case, were being discriminated against by an employer that 
disapproved of union association. \7\ Decades later, the Supreme Court 
would recognize that under the NLRA, even employees with no union and 
no spokespersons still had voice through the exercise of the right to 
walk out of their workplace rather than be subjected to the bitterly 
cold conditions of an unheated Baltimore factory in 1962. \8\ Still 
later, in 1984 the Court recognized an individual's worker's right to 
complain and assert the authority of the negotiated collective 
bargaining agreement, the law of the workplace, \9\ as justification 
for a refusal to drive an unsafe truck. See, NLRB v. City Disposal 
Systems, Inc. \10\ Through collective-bargaining, workers had a voice 
and formed into unions. These unions built the middle class and in so 
doing raised standards for all workers.
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    \7\  Id. at 22.
    \8\  NLRB v. Washington Aluminum, 370 U.S. 9, 17 (1962).
    \9\  www.jwj.org/collective-bargaining-101.
    \10\  465 U.S. 822 (1984).
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 The NLRA has not Been Meaningfully Amended Since 1947 and is in Dire 
                             Need of Reform
    Core provisions of the NLRA have been eroded by overly narrow NLRB 
and court interpretations which frustrate the congressional intent 
behind the creation of the NLRA. The right to engage in protected 
concerted activity has withered away over decades of judicial attack 
and the policies of labor hostile NLRB majorities. From 1980 until its 
recent 2018 temporary spike, \11\ the worker's statutory right to 
strike over working conditions and for mutual aid and protection has 
been curtailed almost to the point of ineffectiveness by policies that 
allow employers to permanently replace economic strikers without a 
showing of exigency. Recent interpretations of the NLRA law by NLRB 
majority of the previous administration has resulted in a findings that 
has substantially narrowed the rights of workers to engage in protected 
concerted activity. In the 2019 case, Alstate Maintenance, \12\ an NLRB 
comprised of a majority of Trump appointees held that employer lawfully 
terminated a sky cap who engaged in a group work stoppage in protest of 
an employer's failure to address the airport tipping practice of a team 
of athletes. The Trump NLRB found that the activity was not protected 
concerted activity, but rather conduct stemming from unprotected 
``gripes.''
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    \11\  https://www.marketwatch.com/story/strikes-are-up-but-union-
membership-is-down-and-that-could-be-a-good-sign-for-the-economy-2020-
02-13.
    \12\  Alstate Maintenance 367 NLRB No. 68 (2019).

    In addition, there needs to be a statutory definition of ``joint 
employer'' and ``employee.'' All too often the public is without 
consistent guidance as it is presented with oscillating policy on these 
subjects, depending on what administration is in the White House. 
Without clear statutory language, workers will continue to suffer from 
the see-sawing of labor law.
    The Trump NLRB turned to rulemaking as a substitute for 
adjudication in its effort to modify the Obama Board's joint-employer 
standard in Browning-Ferris Industries. \13\ While Browning-Ferris was 
pending before the U.S. Court of Appeals for the District of Columbia 
Circuit, the Board attempted to reverse the case through adjudication 
in Hy-Brand Industrial Contractors, Ltd. \14\ That effort was derailed 
following a determination that participating Member William Emanuel had 
a conflict of interest. \15\ As a result, Browning-Ferris was 
reinstated as the prevailing statement on the joint-employer standard. 
Undeterred, in September 2018, the NLRB issued a notice of proposed 
rulemaking (NPRM) that recommended codifying the approach taken in Hy-
Brand. In December 2018, while the NLRB was reviewing public comments 
on its proposed rule, the D.C. Circuit substantially enforced the 
Browning-Ferris approach and emphasized that the common law ``permits 
consideration of those forms of indirect control that play a relevant 
part in determining the essential terms and conditions of employment.'' 
\16\
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    \13\  362 NLRB 1599 (2015).
    \14\  365 NLRB No. 156 (Dec. 14, 2017).
    \15\  See https://www.nlrb.gov/news-outreach/news-story/board-
vacates-hy-brand-decision.
    \16\  Browning-Ferris Industries of California, Inc. v. NLRB, 911 
F.3d 1195 (D.C. Cir. 2018).

    The final rule, which the Board issued in February 2020, \17\ 
failed to resolve key questions about how to determine if two entities 
are joint employers, revealing the limitations of rulemaking as a means 
of defining standards rooted in the common law. Browning Ferris is 
still in litigation, as the Republican majority has refused to apply 
its remedy to the parties. \18\
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    \17\  See https://www.govinfo.gov/content/pkg/FR-2020-02-26/pdf/
2020-03373.pdf.
    \18\  369 NLRB No. 139 (July 2020): The Board found that 
retroactively applying any clarified version of the new joint-employer 
would be ``manifestly unjust.'' The Board elaborated that Browning-
Ferris changed old, reasonably clear law in a way that substantially 
affected reasonable expectations under the Act. So, the Board concludes 
that the new standard should not have been applied to Browning-Ferris. 
The old standard was applied, and it does not seem that the new 
standard was clarified in any meaningful way. 370 NLRB No. 86 (Feb. 
2021): The Board denied the Charging Party's Motion for Reconsideration 
of the above decision since there was not (a) any material error or (b) 
extraordinary circumstances warranting reconsideration. May 2021: Court 
Petitioner filed to have the order reviewed.

    The Trump Board continued its trend of using rulemaking as a way to 
entrench its position on contentious policy questions in its NPRM on 
students' status as employees under the Act. Under the proposed rule, 
students who perform services at a private college or university 
related to their studies will be held to be primarily students with a 
primarily educational, not economic, relationship with their 
university, and therefore not ``employees'' within the meaning of 
Section 2(3). \19\ This rule was intended to overrule the Board's 
decision in Trustees of Columbia University, \20\ and reinstate the 
rule of Brown University \21\ on a more permanent basis. The Trump 
Board, without the direction of the Supreme Court or an analogous 
doctrinal argument about the need for statutory consistency, sought to 
usurp the role of Congress and use rulemaking to modify the statutory 
scheme of the NLRA by excluding students from employee status. Similar 
to the tack in the joint employer rule, the goal of this proposed rule 
was clearly to change a standard that the Board was unable to achieve 
through adjudication. After the change of administrations, the Board on 
March 9, 2021, abandoned this rulemaking effort. \22\
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    \19\  29 U.S.C. 152(3).
    \20\  364 NLRB No. 90 (2016).
    \21\  342 NLRB 483 (2004).
    \22\  Federal Register: Jurisdiction-Nonemployee Status of 
University and College Students Working in Connection With Their 
Studies.

    However, the Trump NLRB's overly narrow interpretation of the term 
``employee'' generally as decided in SuperShuttle, \23\ continues to 
wrongfully deprive workers of their rights by allowing employers to 
more easily misclassify them as independent contractors, who are 
excluded from the NLRA's protections.
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    \23\  367 NLRB No. 75 (2019).

    Other decisions during the Trump NLRB amounted to an all-out 
assault on access to the workers. As articulated in a 2020 presentation 
before the American Bar Association, \24\ the Trump Board majority, in 
a tack designed to undercut the rights of workers--organized or not yet 
organized--to communicate with union staff and with the public, 
launched a breathtaking attack on access rights under Section 7, even 
as it has initiated the rulemaking process in regard to access 
questions. \25\ In each of the cases, the majority has overturned clear 
precedent decided as recently as 10 years and as established as forty. 
The majority justified its decisions in these cases by refusing to 
address the union animus on which the ALJ premised their decision 
(Kroger), \26\ misrepresenting the undisputed facts of the case (UPMC), 
\27\ or ignoring clear, on-point authority from the D.C. Circuit (Tobin 
Center). \28\ Moreover, these decisions represent a departure from the 
tradition of giving notice to the public when it is considering 
reversing significant precedents, as it does in each of these cases. 
The end results of stripping workers of Section 7 access rights seem to 
justify that majority's means.
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    \24\ 24 Get Off My Lawn! The Changing Nature of Employer's Property 
Rights Under Tobin Center, UPMC Presbyterian Shadyside, and Kroger 
Limited Partnership A union perspective, by Pamela Chandran; ABA 
Committee on Development of the Law Under the National Labor Relations 
Act 2020 Midwinter Meeting San Juan, Puerto Rico March 1-4, 2020.
    \25\  The Board announced its intention to address access in its 
rulemaking priorities in May 2019. National Labor Relations Board, 
Semiannual regulatory agenda, 84 Fed. Reg. 29776 (June 24, 2019). The 
Notice of Proposed Rulemaking, however, has not been released.
    \26\  Kroger Limited Partnership and UFCW Local 400, 368 NLRB No. 
64 (2019).
    \27\  UPMC Presbyterian Shadyside (UPMC), 368 NLRB No. 2 (2019).
    \28\  Bexar County Performing Arts Center Foundation d/b/a Tobin 
Center for the Performing Arts (Tobin Center), 368 NLRB No. 46, slip 
op. at 24 (2019).

    With an agency designed to be reactive rather than proactive, many 
workers simply don't know their rights. Efforts by the NLRB to require 
that an employer post a notice of employee rights in the same way other 
labor laws require was struck down by the courts because the statute 
would have to be amended for such a mandate to take effect. Regional 
offices of the NLRB are often placed in facilities where immigrate and 
other low wage workers cannot access because they either require 
identification to enter, are invisible to the public due to lack of 
signage \29\ or because of the closure of resident offices, are too 
distant from the worker's locale. In addition, longstanding budgetary 
freezes and the NLRB's mismanagement under the Trump Administration 
have left the Board's Regional Offices understaffed and under resourced 
for their critical mission.
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    \29\  Even the national headquarters of the NLRB was required to be 
relocated to a privately owned building in Washington, DC where 
external agency signage is prohibited.

    Moreover, as has been recently demonstrated by the actions of the 
prior General Counsel, Peter Robb, the NLRB is susceptible to 
diminished effectiveness by a labor hostile administrator. A new report 
\30\ by the nonpartisan US Government Accountability Office (GAO) found 
that Robb was dismantling the agency from the inside. He reduced staff 
size, destroyed employee morale, and failed to spend the money 
appropriated by Congress. This all occurred while Robb was pursuing 
what many in labor described as an anti-worker, pro-corporate agenda. 
\31\ The NLRB's staffing fell 26 percent between fiscal year 2010 and 
fiscal year 2019, from 1,733 to 1,281. The personnel losses were 
disproportionately in the NLRB's field offices, where unfair labor 
practice charges are investigated, and union representation elections 
are held. The staffing problem was greatly exacerbated during Robb's 
time in office. For the 8 years preceding Robb, the agency filled 95 
percent of vacancies in the headquarters and 73 percent in the field 
offices. But under Robb, staffing in the field dropped by 144 people, 
and only 13 people--a mere 9 percent--were hired to fill these 
vacancies.
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    \30\  GAO-21-242, NATIONAL LABOR RELATIONS BOARD: Meaningful 
Performance Measures Could Help Improve Case Quality, Organizational 
Excellence, and Resource Management.
    \31\  Unprecedented: The Trump NLRB's attack on workers' rights. 
Economic Policy Institute (epi.org).
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    There is a Need for Stable and Consistent Union Election Reform
    In 2014, the Obama-era Board significantly revised the existing 
representation-case procedures to ``remove unnecessary barriers to the 
fair and expeditious resolution of representation questions . . . 
streamline Board procedures, increase transparency and uniformity 
across regions, eliminate or reduce unnecessary litigation, 
duplication, and delay, and update the Board's rules on documents and 
communications in light of modern communications technology.''
    Opponents of the rule contended that the Board's primary objective 
was to speed up the union election process and delay employer 
challenges. Although business groups raised facial challenges to the 
rule in two court proceedings, the rule was upheld by both the U.S. 
Court of Appeals for the Fifth Circuit and the U.S. District Court for 
the District of Columbia Circuit. \32\
---------------------------------------------------------------------------
    \32\  Associated Builders & Contractors of Texas, Inc. v. NLRB, 826 
F.3d 215 (5th Cir. 2016); Chamber of Commerce of the United States v. 
NLRB, 118 F. Supp. 3d 171 (D.D.C. 2015).

    Despite these favorable court decisions, a newly configured Trump 
Board issued a request for information (RFI) seeking public input on 
how the 2017 rule was operating as one of its first orders of business. 
The RFI prompted thousands of statements from unions and employers 
alike, including praise from NLRB Regional Directors experienced in its 
implementation and operation. \33\ Nevertheless, in 2019, the 
Republican-majority Board, while explicitly disclaiming any reliance on 
the RFI or the information the Board gathered during that extensive 
process, rolled back substantial portions of the 2014 rule without 
notice and comment or empirical data to support its modifications. \34\ 
The final rule was found, in pertinent part, to have violated the 
Administrative Procedure Act and made ``radical changes'' to the 
election procedures without opportunity for notice and comment. 
Substantial portions of the rule were struck by Judge Ketanji Brown 
Jackson in litigation before the U.S. District Court for the District 
of Columbia. \35\ It is noteworthy that the several 2019 modifications 
to the 2014 rule deemed procedurali by the court were retained and will 
be subject to change at any time by any succeeding Board without notice 
and comment. This does little to provide the public with policy 
stability.
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    \33\  See Representation-Case Procedures, 82 Fed. Reg. 58783 (Dec. 
14, 2017).
    \34\  Representation-Case Procedures, 84 Fed. Reg. 69524, 69558 
(Dec. 18, 2019) (Member McFerran, dissenting).
    \35\  See AFL-CIO v. NLRB, Civ. No. 20-cv-0675 (KBJ), 2020 WL 
3041384 (D.D.C. June 7, 2020).

    The Need to Strengthen Protections During the Bargaining Process
    Employer unfair labor practices that aim to undermine employees' 
chosen bargaining representative can have corrosive effects in the 
workplace that linger for years. As Kate Bronfenbrenner's research has 
shown, within 1 year after an election, only 48 percent of newly 
organized units have obtained first collective bargaining agreements. 
By 2 years, that number rises to 63 percent, and by 3 years to 70 
percent. Even after 3 years, only 75 percent of units have reached a 
first contract. \36\ During my time at the NLRB, I frequently 
encountered stories that demonstrated an urgent need for better 
protection for workers during their first-contract negotiations. One 
representative example is a case called Somerset Valley Rehab Center 
and Nursing home \37\--the employer would not bargain and deprived 
employees of a collective bargaining agreement for 7 years after the 
union was certified as the representative of the employees. It took 
many legal proceedings and enforcement by the Third Circuit.
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    \36\  See Kate Bronfenbrenner, No Holds Barred: The Intensification 
of Employer Opposition to Organizing, Economic Policy Institute 
Briefing Paper #235 (May 20, 2009), available at https://www.epi.org/
files/page/-/pdf/bp235.pdf.
    \37\  1621 Route 22 West Operating Co., LLC d/b/a Somerset Valley 
Rehabilitation and Nursing Center v. NLRB, 3d Cir. No. 12-1031, March 
14, 2018.

    I welcome the PRO Act's proposal to strengthen protections for 
employees when they are in the vulnerable position of negotiating a 
first contract.
                     Procedural Obstacles to Relief
    During my tenure with the NLRB's regional office as well has my 
period of private practice, I spent a significant amount of my time 
advising the public and clients who had been subjected to unfair labor 
practices. I would advise workers of their rights under the NLRA and 
the consequences of their employers' conduct. In every instance, I 
encouraged workers to rely on the Act's protections despite employer 
intimidation, misrepresentation, and abuse. All too often, because of a 
protracted process and virtually toothless respondent sanctions for 
unfair labor practices, victimized workers seeking and awaiting justice 
would pay the heavy price of retaliation and job loss. Workers might be 
blackballed and forced to go through extended periods without income. 
They would lose the support of their friends. Their families would 
suffer and become dysfunctional. Ultimately, these victimized workers 
lose hope.

    After I became a Board Member, I observed how cases would be tied 
up for years on appeal, how vacancies on the Board would cause case 
processes to grind to a halt, and how efforts to provide the public 
with relief during periods of loss of quorum and political gridlock 
were curtailed and often reversed as a result of judicial intervention.

    As I expressed previously, when workers file charges with the NLRB, 
they are often left to wait for a significant period of time. Proving 
that an employer has unlawfully terminated an employee or otherwise 
significantly interfered with that employee's rights under the NLRA can 
be a very lengthy process. Ordinarily, such charges must be 
investigated by an NLRB regional office, after which there is a hearing 
before an administrative law judge. After the administrative law judge 
renders a decision, employers typically file appeals and await 
decisions by the NLRB, after which they often refuse to comply with the 
Board's orders and appeal those orders to the Federal Courts of 
Appeals. By the time the Board's order is enforced, several years may 
have elapsed, and a fired worker has frequently found a new job. For 
this reason, although 1,270 employees were offered reinstatement in 
fiscal year 2018, only 434 accepted such offers. \38\
---------------------------------------------------------------------------
    \38\ See https://www.nlrb.gov/news-outreach/graphs-data/remedies/
reinstatement-offers (last accessed 4/30/19).

    Even though Section 10(j) of the NLRA permits the Board to seek an 
injunction in Federal district court when an employer fires workers for 
organizing a union or engaging in protected concerted activity, the 
Board only uses this authority sparingly. \39\ In fiscal year 2018, the 
Board only authorized 22 injunctions, despite employers' frequent 
interference with employees' right to organize unions. \40\ By 
contrast, during my years as Chairman, the Board authorized an average 
of 43 injunctions per year. In addition, the NLRA requires the Board to 
seek an injunction whenever a union engages in unlawful picketing or 
strike activity. \41\
---------------------------------------------------------------------------
    \39\  29 U.S.C. Sec.  160(j).
    \40\  See https://www.nlrb.gov/sites/default/files/attachments/
basic-page/node1674/nlrbpar2018508.pdf (last accessed 4/30/19).
    \41\  See 29 U.S.C. Sec.  160(l).

    Sadly, what I have just described often represents the best-case 
scenario for a worker who must go through the full process of 
litigating an unfair labor practice charge. In recent years, procedural 
infirmities at the NLRB itself have all too frequently compromised its 
ability to act, further prolonging the delay workers must endure before 
finally enjoying the remedies they are due. Political gridlock has 
often prevented the NLRB from operating with the full five-member 
---------------------------------------------------------------------------
complement contemplated by the statute.

    I commend the PRO Act for attempting to create greater parity and 
predictability by making injunctive relief in the event of employer 
unfair labor practices mandatory in a greater number of cases.

    Similarly, I am encouraged by the PRO Act's provisions to address 
the Supreme Court's decision in Epic Systems Corp. v. Lewis. \42\ 
During my time as Chairman, the NLRB issued D. R. Horton, Inc. \43\ and 
Murphy Oil USA, Inc. \44\ In these cases, the Board found that an 
employer violates Section 8(a)(1) when it requires employees, as a 
condition of employment, to waive their rights to pursue class or 
collective actions involving employment claims. \45\
---------------------------------------------------------------------------
    \42\  138 S. Ct. 1612, 584 U.S.--(2018).
    \43\  357 NLRB 2277 (2012).
    \44\  361 NLRB 774 (2014).
    \45\ 45 29 U.S.C. Sec.  158(a)(1).
---------------------------------------------------------------------------
    The many cases involving mandatory arbitration agreements that 
followed in the wake of D. R. Horton and Murphy Oil stood as a 
testament to the prevalence of employers' efforts to preemptively 
stifle concerted activity. And though the Seventh and Ninth Circuit 
Courts of Appeals agreed with the NLRB's view that arbitration 
agreements that require employees to forego their Section 7 rights are 
invalid under the Federal Arbitration Act's saving clause, \46\ the 
Supreme Court read the Federal Arbitration Act differently. As 
dissenting Justice Ruth Bader Ginsburg recognized, the ``inevitable 
result of [the majority's] decision will be the underenforcement of 
Federal and state statutes designed to advance the well-being of 
vulnerable workers.'' By restoring employees' rights to pursue their 
employment claims on a class or collective basis, the PRO Act would 
empower workers to join together to protect themselves and each other 
and to seek vindication when they have been wronged at work.
---------------------------------------------------------------------------
    \46\  See Ernst & Young LLP v. Morris, 834 F.3d 975 (9th Cir. 
2016); Lewis v. Epic Systems Corp., 823 F.3d 1147 (7th Cir. 2016).
---------------------------------------------------------------------------
                   Inadequate Remedies for Violations
    As was stated in the testimony of Devki K. Virk before the House of 
Representatives Committee on Education and Labor, Subcommittee on 
Health, Employment, Labor and Pensions, \47\ the Act's inadequate 
remedies for unlawful conduct not only fail to deter or fully remedy 
violations, but in fact incentivize unlawful practices. The NLRA 
provides only limited remedies for violations. Section 10(c) of the 
NLRA limits the remedies to a cease-and desist order and, in the event 
of an unlawful firing, reinstatement with back pay, along with a 
required notice posting. By comparison, victims of race-or sex-based 
discrimination are eligible for compensatory and, in some cases, 
punitive damages under Title VII of the Civil Rights Act. Claimants 
owed unpaid wages or overtime can recover liquidated damages in 
addition to their lost wages under the Fair Labor Standards Act.
---------------------------------------------------------------------------
    \47\  Devki K. Virk, Bredhoff & Kaiser, P.L.L.C., Testimony before 
the Committee on Education and Labor, Subcommittee on Health, 
Employment, Labor and Pensions, U.S. House Of Representatives, March 
26, 2019.

    Consistent with Devki Virk's observations, I have found that the 
lack of effective remedies under the NLRA is of obvious importance for 
individual workers who are fired for organizing a union or engaging in 
other protected activity under Section 7 of the NLRA. Because employers 
often calculate that noncompliance is less costly, the Board's limited 
remedies stand in the way of its ability to fulfill its statutory 
mission to ``encourage the practice and procedure of collective 
bargaining'' and ``protect the exercise by workers of full freedom of 
association, self-organization, and designation of representatives of 
their own choosing.'' \48\
---------------------------------------------------------------------------
    \48\  29 U.S.C. Sec.  151.

    I recall a particular example of a respondent's flagrant pattern of 
flouting the NLRA in light of the NLRB's inadequate remedies was the 
2014 case Pacific Beach Hotel. \49\ In that case, the Respondents had 
engaged in egregious unfair labor practices over the span of 10 years. 
The Board found that the Respondents had violated multiple provisions 
of the Act and engaged in objectionable conduct that interfered with 
elections on two occasions. In addition, the Respondents were subject 
to two Section 10(j) injunctions and had been found to be in contempt 
of court for violating a Federal district court's injunction. 
Nevertheless, in 2014 the Board in faced Respondents which still had 
not complied with the remedial obligations imposed on them after the 
Board's prior decisions.
---------------------------------------------------------------------------
    \49\  HTH Corp., Pacific Beach Corp., and KOA Mgmt., LLC, a single 
employer, d/b/a Pacific Beach Hotel, 361 NLRB 709 (2014).

    Rather, the Respondents continued to engage in unlawful activity, 
some of which repeatedly targeted the same employees for their 
protected activity and detrimentally affected collective bargaining. 
For example, after the Board held that the Respondents unlawfully 
imposed unilateral increases to housekeepers' workloads in 2007, the 
Respondents briefly restored the lower workloads only to unilaterally 
raise them again. Similarly, the Respondents unlawfully disciplined, 
suspended, and then discharged an employee a second time for his 
protected activity, after he was reinstated pursuant to a Federal 
district court order of interim injunctive relief. Respondents 
continued making unilateral changes to work rules, taking adverse 
actions against employees for supporting the Union, placing employees 
under surveillance, undermining the Union, threatening, and 
intimidating Union agents, and in many other manners interfering with 
employee rights under the Act--all contrary to the Board's prior 
---------------------------------------------------------------------------
orders.

    Faced with a flagrant violator of the Act of such magnitude, the 
Board, cognizant of its inability to impose punitive remedies, tried to 
do its best with the authority it had. Among other remedies specific to 
these violations, the Board ordered the Respondents to cease and desist 
from engaging in the recidivist behavior described previously and 
ordered reinstatement with back pay to the affected employees. It also 
ordered a 3-year notice-posting period and required mailing of the 
notice, the Decision and Order, and an additional Explanation of Rights 
to current and former employees and supervisors, as well as provision 
of the material to new employees and supervisors for a period of 3 
years. These notices had to also be published in local media of general 
circulation. Because its past orders were not self-enforcing and 
required the General Counsel and the Charging Party to incur additional 
litigation costs by seeking Federal court enforcement, the Board 
majority also ordered that the multiple years of litigation costs be 
awarded to the General Counsel and Union, as well as certain other 
costs incurred by the Union as a direct result of the Respondents' 
unfair labor practices. It should be noted that the remedy of 
litigation costs was, however, struck down by the Court of Appeals for 
the District of Columbia Circuit because the Board lacked the statutory 
authority to impose such sanctions. \50\ Given the Act's significant 
remedial limitations, employers are commonly willing to flout the law 
by intimidating, coercing, and firing workers because they engage in 
protected concerted activity or attempt to organize a union. As the 
Board's experience in Pacific Beach Hotel shows, when employers 
discover that the cost of noncompliance is so low, they sometimes 
violate the law frequently over the course of many years.
---------------------------------------------------------------------------
    \50\  HTH Corp. v. NLRB, 823 F.3d 668, 678-81 (D.C. Cir. 2016).

    It isn't difficult to understand why. Without a credible deterrent, 
employers weighing the consequences of violating the law face a choice 
that all but incentivizes such serious interferences with employees' 
rights. As Devki Virk explained, one-third of employers fire workers 
during organizing campaigns, \51\ and 15 to 20 percent of union 
organizers or activists may be fired as a result of their activities in 
union campaigns. And although the NLRB obtained 1,270 reinstatement 
orders for workers who were illegal fired for exercising their rights 
in fiscal year 2018 and collected $54 million in back pay for workers, 
\52\ even when the Board is able to timely intervene and order 
reinstatement and backpay, it is not always enough to prevent employer 
lawbreaking.
---------------------------------------------------------------------------
    \51\  Josh Bivens et al., ``How today's unions help working 
people.''
    \52\  National Labor Relations Board, NLRB Performance Reports-
Monetary Remedies/Reinstatement Offers, accessed February 2019.

    During my time as Chairman, the NLRB modified its approach to 
calculating backpay in an effort to better fulfill the agency's dual 
remedial mandate to ensure that discriminatees are actually made whole 
and to deter future unlawful conduct. In King Soopers, Inc., \53\ the 
Board modified its standard make-whole remedy to require respondents to 
fully compensate discriminatees for their search-for-work expenses and 
expenses they incurred because they were victims of unlawful conduct. 
Previously, the Board had treated search-for-work and interim 
employment expenses as an offset that would reduce the amount of 
interim earnings deducted from gross backpay, an approach which I and 
the other members who joined the majority in King Soopers argued 
unfairly prevented discriminatees from being made whole and amounted to 
a subsidy of employers' violations of the law.
---------------------------------------------------------------------------
    \53\  364 NLRB No. 93 (2016), enf'd in relevant part, 859 F.3d 23 
(D.C. Cir. 2017).

    While King Soopers marked a significant improvement that has helped 
the Board come closer to making employees who suffer unlawful 
termination whole, even the prospect of paying a full back pay award is 
often not a sufficient deterrent for employers. The PRO Act comes even 
closer to accomplishing a full make-whole remedy by providing that 
backpay is not to be reduced by interim earnings. And by including 
provisions for front pay, consequential damages, and liquidated 
damages, the PRO Act would help the Board more effectively deter 
violations by making compliance with the law a more rational decision 
---------------------------------------------------------------------------
for employers.

    I see a particular need for the enhanced remedies the PRO Act would 
provide when employers violate Section 8(a)(4) of the Act, which makes 
it an unfair labor practice to discharge or discriminate against 
employees because they have ``filed charges or given testimony'' in a 
Board proceeding. \54\
---------------------------------------------------------------------------
    \54\  29 U.S.C. Sec.  158(a)(4).

    Without the assurance that they will be fully protected when they 
file charges and participate in Board hearings, employees will continue 
to be fearful about coming forward to tell their stories or testify on 
behalf of their unions or fellow employees. Unchecked retaliation 
against employees seeking enforcement of the NLRA, threatens the 
viability of the whole remedial scheme the Act contemplates.
          Unfair Labor Practices Against Undocumented Workers
    In Sure-Tan, Inc. v. NLRB, \55\ the Supreme Court held that 
undocumented workers are ``employees'' within the scope of Section 2(3) 
of the Act. \56\
---------------------------------------------------------------------------
    \55\  467 U.S. 883, 892 (1984).
    \56\  29 U.S.C. Sec.  152(3).

    However, the Supreme Court in Hoffman Plastic Compounds, Inc. v. 
NLRB, \57\ also made it clear that Board lacked ``remedial discretion'' 
to award backpay to an undocumented worker who, in contravention of the 
Immigration Reform and Control Act (IRCA), had presented invalid work-
authorization documents to obtain employment. While a respondent may be 
found liable for such unlawful conduct, victimized undocumented 
employees are prohibited from receiving the make whole remedies of back 
pay and/or reinstatement, which are commonly ordered as a remedy for 
such violations of the law. Consequently, because of the limitations in 
the statute, violators are merely obliged to post a notice committing 
to cease and desist from such conduct. This is tantamount to a slap on 
the wrist of flagrant violators of the law. I joined former NLRB 
Chairman Wilma Liebman in articulating the inadequacy of this remedy in 
Mezonos Maven Bakery, Inc., \58\ a post-Hoffman Plastics Board 
decision. Among the concerns former Chairman Liebman and I expressed 
are the following:
---------------------------------------------------------------------------
    \57\  535 U.S. 137 (2002).
    \58\  357 NLRB No. 47 (2011).

        1. Precluding backpay undermines enforcement of the Act. 
        Although the primary purpose of a backpay award is to make 
        employee victims of unfair labor practice whole, the backpay 
        remedy also serves a deterrent function by discouraging 
---------------------------------------------------------------------------
        employers from violating the Act.

        2. Precluding backpay chills the exercise of Section 7 rights. 
        Provided it is severe enough, one labor law violation can be 
        all it takes. The coercive message--that if you assert your 
        rights, you will be discharged (and, perhaps, detained, and 
        deported)--will have been sent, and it will not be forgotten.

        3. Precluding backpay fragments the workforce and upsets the 
        balance of power between employers and employees. Protecting 
        collective action is the bedrock policy on which the Act rests, 
        as was recognized by the Supreme Court when it upheld the Act's 
        constitutionality. \59\
---------------------------------------------------------------------------
    \59\  See NLRB v. Jones & Laughlin Steel Corp., 301 U.S. 1, 33 
(1937) (``Long ago we stated the reason for labor organizations. We 
said that they were organized out of the necessities of the situation; 
that a single employee was helpless in dealing with an employer; that 
he was dependent ordinarily on his daily wage for the maintenance of 
himself and family; that if the employer refused to pay him the wages 
that he thought fair, he was nevertheless unable to leave the employ 
and resist arbitrary and unfair treatment; that union was essential to 
give laborers opportunity to deal on an equality with their 
employer.'') (citing American Steel Foundries v. Tri-City Central 
Trades Council, 257 U.S. 184, 209 (1921)).

        4. Precluding backpay removes a vital check on workplace 
        abuses. The very employers most likely to be emboldened by a 
        backpay-free prospect to retaliate against undocumented workers 
        for concertedly protesting their terms and conditions of 
        employment are the ones most likely to impose the worst terms 
---------------------------------------------------------------------------
        and conditions.

    Both former Chairman Liebman and I recognized that an award of 
backpay to undocumented workers is beyond the scope of the Board's 
authority under the Court's decision in Hoffman. We nevertheless 
remained convinced that an order relieving the employer of economic 
responsibility for its unlawful conduct can serve only to frustrate the 
policies of both the Act and our Nation's immigration laws. Although 
untested, we suggested in Mezonos that a remedy requiring payment by 
the employer of backpay equivalent to what it would have owed to an 
undocumented worker would not only be consistent with Hoffman but would 
advance Federal labor and immigration policy objectives. Such backpay 
could be paid, for example, into a fund to make whole victimized 
workers whose backpay the Board had been unable to collect. The novelty 
of such a remedy would likely cause it to be tied up in court 
challenges, thereby delaying justice for an untold period. However, the 
PRO Act would bring forth a clear and expedient resolution to the 
consequential inequities presented by the current state of the law.

    Thank you very much for giving me the opportunity to testify before 
the Committee today. I applaud you for thinking carefully about how 
best to ensure that working people in this country can enjoy full 
freedom of association.
                                 ______
                                 
    The Chair. Thank you, Mr. Pearce.
    Dr Shierholz.

   STATEMENT OF HEIDI SHIERHOLZ, PH.D., SENIOR ECONOMIST AND 
 DIRECTOR OF POLICY, ECONOMIC POLICY INSTITUTE, SILVER SPRING, 
                               MD

    Ms. Shierholz. Chair Murray, Senator Braun, and other 
Members of the Committee, thank you for the opportunity to 
testify today on this urgent matter and I am really going to 
dig in on the economics of this. And I will start by saying 
that the share of workers covered by a collective bargaining 
agreement declined from 27 percent to 12.1 percent between 1979 
and 2020. This decline was not because your workers don't want 
to be in unions.
    In the four decades from the late 1970's to the late 
2010's, the share of nonunion workers who said they would vote 
to unionize if they were given the opportunity rose from one-
third to nearly one-half. The fact that workers want to be in 
unions is no surprise when workers are able to form a union and 
collectively bargain their wages, benefits, and working 
conditions all get better. So on average, a worker covered by a 
union contract earns 10.2 percent more than a similar worker 
who is not in a union.
    Union workers are more likely to have employer provided 
health insurance, employer sponsored retirement plans, paid 
vacation and sick leave, more predictable schedules, and safer 
workplaces. Further, the right to a union is directly relevant 
to our urgent national conversation around racial equity. Black 
workers are more likely than white workers to be in unions, and 
Black workers who are in unions get a bigger boost from being 
in the union than white workers do. Those two facts together 
mean that unions help narrow the Black, White wage gap. And 
research shows that this phenomenon is not new. By 1950, Black 
workers were more likely to be in unions and had a larger union 
premium than white workers.
    This means that the net effect of the mid-20th century 
spread of unionization was that the institution of collective 
bargaining was one of the most important institutions in our 
Country for advancing racial, economic, economic justice. And 
conversely, the decline of unionization has played a 
significant role in the expansion of the Black, white wage gap 
over the last four decades. I also want to highlight the fact 
that nonunion workers benefit from the presence of unions when 
union density is high. Unions essentially set standards that 
nonunion workers must meet in order to attract and retain the 
workers that they need.
    This combination of the direct effect of unions on union 
members and the spillover effect to nonunion workers means that 
unions are crucial for decent wage growth for working people. 
Research shows that unionization accounts for a third of the 
growth in inequality between typical workers and workers at the 
high end of the wage distribution in recent decades. The 
pandemic also taught us crucial lessons about the importance of 
unions. While the number of workers represented by a union 
declined in 2020, as the economy shed millions of jobs, the 
unionization rate rose because union workers saw less job loss 
than nonunion workers.
    This was due in large part to the fact that unionized 
workers had a voice in how their employers navigated the 
pandemic. They used this voice for things like negotiating 
terms of furloughs or work sharing arrangements to save jobs. 
The importance of unions has been especially clear for 
frontline workers during the crisis. Unionized workers who 
provide essential services were able to do things like secure 
enhanced safety measures, additional premium pay, paid sick 
time. But like non-essential workers, most essential workers 
are not unionized.
    During the pandemic, many nonunionized, essential workers 
were forced to work without personal protective equipment or 
access to paid sick leave or premium pay. The decline of 
unionization in recent decades has not been, as some would like 
us to believe, the natural result of a modern economy. It has 
been the result of fierce corporate opposition that has 
suppressed workers' freedom to organize. Aggressive anti-union 
campaigns were once confined to the most anti-union employers, 
but now they are the norm.
    As a National Labor Relations Act makes--and though the 
National Labor Relations Act makes it illegal for employers to 
intimidate, coerce, or fire workers in retaliation for 
organizing, the penalties are so weak that they don't provide 
an actual economic disincentive for illegal union busting. And 
as a result, it is rampant. Employers are charged with illegal 
conduct in over 40 percent of union elections.
    Despite these relentless attacks on unions and collective 
bargaining, an update to labor law to rebalance the system has 
not happened. The huge gap between the share of unions--the 
share of workers who want a union and the share of workers who 
are in a union makes it clear that our system of labor law is 
not working. Policy changes like the Protecting the Right to 
Organize Act are crucial for rebuilding an economy that 
guarantees all workers the right to come together and have a 
voice in their workplace. Thank you and I look forward to 
questions.

    [The prepared statement of Ms. Shierholz follows:]
                 prepared statement of heidi shierholz
    Chair Murray, Ranking Member Burr, and Members of the Committee, 
thank you for the opportunity to testify today on the right to organize 
and on empowering U.S. workers in a 21st century economy. My name is 
Heidi Shierholz and I am a senior economist and the director of policy 
at the Economic Policy Institute (EPI) in Washington, DC. EPI is a 
nonprofit, nonpartisan think tank created in 1986 to include the needs 
of low-and middle-wage workers in economic policy discussions. EPI 
conducts research and analysis on the economic status of working 
America, proposes public policies that protect and improve the economic 
conditions of low-and middle-wage workers, and assesses policies with 
respect to how well they further those goals. I previously served as 
Chief Economist at the U.S. Department of Labor during the Obama 
administration.

    Today I will discuss the importance of unions to working people, to 
racial equity, and to reducing economic inequality. I will also discuss 
how the decline in unionization in recent decades is the direct result 
of relentless attacks on unions. Finally, I will discuss the economic 
impacts of the coronavirus pandemic, how unions played a vital role in 
protecting workers during the pandemic, and why promoting unionization 
and the right to collectively bargain through labor law reform is 
essential for an equitable recovery.
                The Benefits of Unions to Union Workers
    The share of workers covered by a collective bargaining agreement 
dropped from 27.0 percent to 12.1 percent between 1979 and 2020, 
meaning the union coverage rate is now less than half where it was four 
decades ago. \1\ Importantly, this decline was not because workers are 
now less interested in being in a union. In the four decades between 
the late 1970's and the late 2010's, the share of non-union workers who 
said they would vote to unionize if given the opportunity rose from 
one-third to nearly one-half. \2\
---------------------------------------------------------------------------
    \1\  Economic Policy Institute, ``Union Coverage,'' The State of 
Working America Data, last updated February 2021.
    \2\  Thomas A. Kochan et al., ``Worker Voice in America: Is There a 
Gap Between What Workers Expect and What They Experience?'' ILR Review 
72, no. 1 (January 2019): Figure 3, https://doi.org/10.1177/
0019793918806250.

    It's no surprise workers want unions. When workers are able to come 
together, form a union, and collectively bargain, their wages, 
benefits, and working conditions improve. \3\ On average, a worker 
covered by a union contract earns 10.2 percent more in wages than a 
peer with similar education, occupation, and experience in a 
nonunionized workplace in the same sector. \4\ Unions also provide 
workers with better benefits. For example, unions workers are far more 
likely to be covered by employer-provided health insurance: More than 
nine in 10 workers covered by a union contract (95 percent) have access 
to employer-sponsored health benefits, compared with just 68 percent of 
nonunion workers. Further, union employers contribute more to their 
employee's health care benefits. \5\ Union workers also have greater 
access to paid sick days: More than nine in 10 workers--93 percent--
covered by a union contract have access to paid sick days, compared 
with 75 percent of nonunion workers. \6\ Union workers are also more 
likely to have paid vacation and holidays, more input into the number 
of hours they work, and more predictable schedules. Further, union 
employers are more likely to offer retirement plans and to contribute 
more toward those plans than comparable nonunion employers. \7\
---------------------------------------------------------------------------
    \3\  Bivens et al., How Today's Unions Help Working People: Giving 
Workers the Power to Improve Their Jobs and Unrig the Economy, Economic 
Policy Institute, August 2017.
    \4\  Economic Policy Institute, Unions Help Reduce Disparities and 
Strengthen Our Democracy (fact sheet), April 23, 2021.
    \5\  Economic Policy Institute, Unions Help Reduce Disparities and 
Strengthen Our Democracy (fact sheet), April 23, 2021.
    \6\  Economic Policy Institute, Unions Help Reduce Disparities and 
Strengthen Our Democracy (fact sheet), April 23, 2021.
    \7\  Economic Policy Institute, Unions Help Reduce Disparities and 
Strengthen Our Democracy (fact sheet), April 23, 2021.

    Unions also improve the health and safety practices of workplaces 
through their collective bargaining agreements by providing health 
insurance and requiring safety equipment. \8\ Further, unions empower 
and allow workers to freely report unsafe working conditions without 
retaliation, which can lead to a reduction in work hazards. \9\ 
Research has found that so-called ``right-to-work'' legislation, which 
weaken unions, has been associated with a roughly 14 percent increase 
in the rate of occupational fatalities. \10\
---------------------------------------------------------------------------
    \8\  Michael Zoorob, ``Does `Right to Work' Imperil the Right to 
Health? The Effect of Labour Unions on Workplace Fatalities,'' 
Occupational and Environmental Medicine, 75, (June 2018): 736-738, 
https://dx.doi.org/10.1136/oemed-2017-104747.
    \9\  Benjamin C. Amick et al., ``Protecting Construction Worker 
Health and Safety in Ontario, Canada: Identifying a Union Safety 
Effect,'' Journal of Occupational and Environmental Medicine, 57, no. 
12 (December 2015): 1337-1342, https://doi.org/10.1097/
JOM.0000000000000562.
    \10\  Michael Zoorob, ``Does `Right to Work' Imperil the Right to 
Health? The Effect of Labour Unions on Workplace Fatalities,'' 
Occupational and Environmental Medicine, 75, (June 2018): 736-738, 
https://dx.doi.org/10.1136/oemed-2017-104747.
---------------------------------------------------------------------------
               The Importance of Unions to Racial Equity
    The right to a union and collective bargaining is also directly 
relevant to our urgent national conversation around racial inequality 
in its various forms, including economic disparities by race. Unions 
and collective bargaining help shrink the Black--white wage gap, due to 
the fact that Black workers are more likely than white workers to be 
represented by a union and that Black workers who are in unions get a 
larger boost to wages from being in a union than white workers do (i.e. 
the ``union wage premium'' is larger for Black workers than for white 
workers). Further, research shows that this phenomenon isn't new. 
Starting in the mid-1940's, Black workers began to be more likely to be 
in unions and to have a larger union premium than white workers. \11\ 
While significant segments of organized labor--like nearly all 
institutions in U.S. society--exhibited racial bias well past the mid-
1940's, the net effect of the mid-20th century spread of unionization 
made the institution of collective bargaining one of the most important 
institutions in the country for advancing racial economic justice. 
Consequently, one of the most devastating casualties of the erosion of 
collective bargaining in recent decades has been the weakening of this 
force for racial equity. The decline of unionization has played a 
significant role in the expansion of the Black--white wage gap over the 
last four decades. An increase in unionization could help halt and 
reverse those trends. \12\
---------------------------------------------------------------------------
    \11\  Henry S. Farber, ``Unions and Inequality over the Twentieth 
Century: New Evidence from Survey Data,'' Quarterly Journal of 
Economics, 136, no. 3 (August 2021): 1325-1385, https://doi.org/
10.1093/qje/qjab012.
    \12\  Valerie Wilson and William M. Rodgers III, Black-White Wage 
Gaps Expand with Rising Wage Inequality, Economic Policy Institute, 
September 20, 2016.
---------------------------------------------------------------------------
                     Unions and Economic Inequality
    While union workers receive higher wages than nonunion workers, 
nonunion workers also benefit from the presence of unions. When union 
density is high, nonunion workers benefit, because unions effectively 
set broader standards--including higher wages--that nonunion employers 
must meet in order to attract and retain the workers they need (and to 
avoid facing a union organizing drive themselves). The combination of 
the direct effect of unions on union members and this ``spillover'' 
effect to nonunion workers means unions are crucial in raising wages 
for working people and reducing income inequality. \13\
---------------------------------------------------------------------------
    \13\  Jake Rosenfeld, Patrick Denice, and Jennifer Laird, Union 
Decline Lowers Wages of Nonunion Workers, Economic Policy Institute, 
August 2016.

    Unsurprisingly, then, after decades of decline in the share of 
workers represented by a union, the U.S. economy in 2019 had the 
highest inequality ever in U.S. history, according to Census Bureau 
data. \14\ Chief executive officer (CEO) compensation grew 1,167 
percent between 1978 and 2019, while typical worker compensation had 
risen only 13.7 percent during that time. \15\ From 1979 to 2019, the 
wages of the top 1 percent grew nearly 160.3 percent, whereas the wages 
of the bottom 90 percent combined grew just 26.0 percent, less than 
one-sixth as fast. \16\
---------------------------------------------------------------------------
    \14\  United States Census Bureau, ``American Community Survey 
Provides New State and Local Income, Poverty and Health Insurance 
Statistics'' (press release), September 26, 2019.
    \15\  Lawrence Mishel and Jori Kandra, CEO Compensation Surged 14 
percent in 2019 to $21.3 Million, Economic Policy Institute, August 
2020.
    \16\  Lawrence Mishel and Jori Kandra, ``Wages for the Top 1 
percent Skyrocketed 160 percent since 1979 while the Share of Wages for 
the Bottom 90 percent Shrunk,'' Working Economics (Economic Policy 
Institute blog), December 2020.

    Recent research examining the direct effect on wages of union 
workers and the spillover effect on wages of nonunion workers has 
demonstrated that the median worker's wages would have been higher, and 
inequality between middle-and high-wage workers much lower, had there 
not been an erosion of collective bargaining. For instance, the 
``typical'' or median worker economy-wide would have earned $1.56 more 
per hour in 2017 had unionization not declined since 1979. This 
translates to an equivalent gain of $3,250 for a full-time, full-year 
worker. \17\ Figure A provides an instructive raw comparison, showing 
that as union membership has eroded, the share of total income in the 
economy that gets funneled to the rich has risen accordingly. More 
rigorous research shows that de-unionization accounts for one-third of 
the growth in inequality between typical workers and workers at the 
high end of the wage distribution in recent decades. \18\
---------------------------------------------------------------------------
    \17\  Lawrence Mishel, The Enormous Impact of Eroded Collective 
Bargaining on Wages, Economic Policy Institute, April 2021.
    \18\  Lawrence Mishel, The Enormous Impact of Eroded Collective 
Bargaining on Wages, Economic Policy Institute, April 2021.
---------------------------------------------------------------------------
    FIGURE A

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    

                      .epsUnions and the Pandemic
    The U.S. entered the COVID-19 pandemic with an economy 
characterized by extreme economic and racial inequality, historically 
low rates of union density, and weak worker protections, but low 
unemployment. In February 2020, the unemployment rate was at a 50-year 
low of 3.5 percent. In March and April 2020, the labor market shed an 
unprecedented 22 million jobs, losses the likes of which we hadn't 
experienced in modern history. Low-wage workers experienced vastly 
greater job loss due to the fact that low-wage jobs are concentrated in 
sectors that got hit particularly hard because they involve more social 
contact (such as restaurants and bars, hotels, personal services, 
events, and brick-and-mortar retail). Further, due to differences in 
labor market outcomes caused by occupational segregation, 
discrimination, and other disparities rooted in systemic racism and 
sexism, people of color--and particularly women of color--experienced 
much greater job loss. While white non-Hispanic workers saw a peak 
unemployment rate of 12.8 percent, Black non-Hispanic workers saw a 
peak unemployment rate of 16.7 percent, Latino workers saw an 
unemployment rate of 18.5 percent, and AAPI workers saw an unemployment 
rate of 15.0 percent. \19\, \20\
---------------------------------------------------------------------------
    \19\  Celine McNicholas et al., Why Unions Are Good for Workers--
Especially in a Crisis Like COVID-19: 12 Policies That Would Boost 
Worker Rights, Safety, and Wages, Economic Policy Institute, August 
2020.
    \20\  While jobs are now returning rapidly--on average, the labor 
market added more than 600,000 jobs in each of the last 5 months--an 
enormous gap in the labor market remains. We still have 6.8 million 
fewer jobs than we did before the COVID-19 recession began. And 
furthermore, that 6.8 million is not the total gap in the labor market. 
Before the recession, we were adding about 200,000 jobs per month. At 
that pace, we would have added 3.2 million jobs since the recession 
began, which means the total gap in the labor market right now is as 
many as 10 million jobs (6.8 + 3.2 = 10 million jobs). Further, the 
recovery remains highly inequitable. The June jobs report shows the 
overall unemployment rate is 5.9 percent. However, while the 
unemployment rate is 5.2 percent for white workers, the Black 
unemployment rate is 9.2 percent and the Hispanic and Asian 
unemployment rates are 7.4 percent and 5.8 percent, respectively.

    The Bureau of Labor Statistics' most recent data on unionization 
shows that while the number of workers represented by a union declined 
in 2020, the unionization rate rose because union workers saw less job 
loss that nonunion workers. This increase in the unionization rate was 
due in part to the fact that unionized workers have had a voice in how 
their employers have navigated the pandemic, and have used this voice 
for such things as negotiating for terms of furloughs or work-share 
arrangements to save jobs. \21\ This engagement likely played a role in 
limiting overall job loss among unionized workers. \22\
---------------------------------------------------------------------------
    \21\  Celine McNicholas et al., Why Unions Are Good for Workers--
Especially in a Crisis Like COVID-19: 12 Policies That Would Boost 
Worker Rights, Safety, and Wages, Economic Policy Institute, August 
2020.
    \22\  Celine McNicholas, Heidi Shierholz, and Margaret Poydock, 
Union Workers Had More Job Security during the Pandemic, but 
Unionization Remains Historically Low, Economic Policy Institute, 
January 2021. Another reason unionization rates increased in 2020 was a 
``pandemic composition effect.'' In particular, industries with lower 
unionization rates, like leisure and hospitality, have tended to 
experience the most job loss during the pandemic, while sectors with 
higher unionization rates, like the public sector, have tended to see 
less job loss. A simple decomposition of the increase in the overall 
unionization rate in 2020 shows that roughly half (46.5 percent) of the 
increase was the result of a pandemic composition effect, while roughly 
half (53.5 percent) was due to union workers seeing less job loss than 
nonunion workers in the same industry.

    The importance of unions in giving workers a collective voice in 
the workplace has been especially salient for frontline workers 
throughout the pandemic. During the crisis, unionized workers who 
provide essential services have been able to secure enhanced safety 
measures, additional premium pay, and paid sick time. \23\ But most 
essential workers, like nonessential workers, are not unionized. For 
example, just 10 percent of essential workers in health care are 
unionized and just 8 percent of essential workers in food and 
agriculture are unionized. \24\
---------------------------------------------------------------------------
    \23\  Celine McNicholas et al., Why Unions Are Good for Workers--
Especially in a Crisis Like COVID-19: 12 Policies That Would Boost 
Worker Rights, Safety, and Wages, Economic Policy Institute, August 
2020.
    \24\  Celine McNicholas and Margaret Poydock, ``Who Are Essential 
Workers: A Comprehensive Look at Their Wages, Demographics, and 
Unionization Rates'' Working Economics (Economic Policy Institute 
blog), May 29, 2020.

    During the pandemic, many nonunionized essential workers were 
forced to work without personal protective equipment or access to paid 
leave or premium pay. Further, when nonunion workers have advocated for 
health and safety protections or wage increases, they were often 
retaliated against or even fired. The lack of these basic protections 
led to thousands of essential workers becoming infected with the 
coronavirus. \25\
---------------------------------------------------------------------------
    \25\  Celine McNicholas et al., Why Unions Are Good for Workers--
Especially in a Crisis Like COVID-19: 12 Policies That Would Boost 
Worker Rights, Safety, and Wages, Economic Policy Institute, August 
2020.
---------------------------------------------------------------------------
The Decline in Unionization is the Direct Result of Relentless Attacks 
                               on Unions
    As mentioned above, the decline in collective bargaining in recent 
decades has not happened because workers don't want unions--a far 
higher share of nonunionized workers report wanting to be in a union 
today than did four decades ago. The decline in unionization has been 
the result of fierce corporate opposition that has suppressed workers' 
freedom to form unions and bargain collectively. Intense and aggressive 
anti-union campaigns--once confined to the most anti-union employers--
have become widespread; it is now typical, when workers seek to 
organize, for their employers to hire union avoidance consultants to 
orchestrate fierce anti-union campaigns.

    Though the National Labor Relations Act (NLRA) makes it illegal for 
employers to intimidate, coerce, or fire workers in retaliation for 
participating in union-organizing campaigns, the penalties are 
insufficient to provide a serious economic disincentive for such 
behavior (there are no punitive damages or criminal charges under the 
NLRA; penalties may consist of being required to post a notice or 
reinstate illegally fired workers). \26\ This means that employers can 
engage in illegal tactics with almost no financial concern; for 
example, employers often threaten to close the worksite, cut union 
activists' hours or pay, or report workers to immigration enforcement 
authorities if employees unionize. One out of five union election 
campaigns involves a charge that a workers was illegally fired for 
union activity. \27\
---------------------------------------------------------------------------
    \26\  Celine McNicholas et al., ``Civil Monetary Penalties for 
Labor Violations Are Woefully Insufficient to Protect Workers,'' 
Working Economics (Economic Policy Institute blog), July 15, 2021.
    \27\  Celine McNicholas et al., Unlawful: U.S. Employers Are 
Charged with Violating Federal Law in 41.5 percent of All Union 
Election Campaigns, Economic Policy Institute, December 2019.

    In the face of these attacks on collective bargaining, policymakers 
have egregiously failed to update labor laws to rebalance the system. 
In fact, in many cases policy is moving backward; 27 states have passed 
so-called right-to-work laws, \28\ which are intended to undermine 
union finances by making it illegal for unions to require nonunion 
members of a collective bargaining unit (who don't pay union dues) to 
pay ``fair share fees''--fees that cover only the basic costs of 
representing employees in the workplace. And the Supreme Court decision 
in Janus v. AFSCME--a case financed by a small group of foundations 
with ties to the largest and most powerful corporate lobbies--made 
``right-to-work'' the law of the land for all public-sector unions. 
\29\
---------------------------------------------------------------------------
    \28\  National Conference for State Legislatures, Right-To-Work 
Resources (fact sheet).
    \29\  Celine McNicholas, Zane Mokhiber, and Marni von Wilpert, 
Janus and Fair Share Fees: The Organizations Financing the Attack on 
Unions' Ability to Represent Workers, Economic Policy Institute, 
February 2018.
---------------------------------------------------------------------------
                 Conclusion: The U.S. Needs the PRO Act
    In the expansion following the Great Recession, the unemployment 
rate ultimately got down to 3.5 percent. However, given the tight labor 
market, wage growth for working people was surprisingly slow and 
uneven, racial wage gaps worsened, and the highest earners continued to 
see more than their fair share of economic gains. The years after the 
Great Recession marked a completely different story from the experience 
following the Great Depression, and there is no mystery to that 
phenomenon--Federal labor law policy following the Great Depression 
enabled workers to organize unions, while Federal lawmakers failed to 
pass labor law reform following the Great Recession. We can't make that 
same mistake now.

    This is a critical moment and the policy decisions made will have 
longstanding impacts on our economy. We know that unions are essential 
to a fair and equal economy. It is crucial that policymakers prioritize 
labor law reforms that restore workers' rights to organize and bargain 
collectively. The Protecting the Right to Organize (PRO) Act addresses 
many of the major shortcomings with our current law. Passing the PRO 
Act would help restore workers' ability to organize with their co-
workers and negotiate for better pay, benefits, and fairness on the 
job, and it would reduce racial disparities and help halt and reverse 
skyrocketing inequality. \30\
---------------------------------------------------------------------------
    \30\  The decline of unionization over the last four decades has 
played a significant role in the expansion of the Black--white wage 
gap. See Valerie Wilson and William M, Rodgers III, Black-White Wage 
Gaps Expand with Rising Wage Inequality, Economic Policy Institute, 
September 2016.

    The large gap between the share of workers who want a union and the 
share of workers who are in a union underscores that our system of 
labor laws is not working. Fundamental reform is required to rebuild an 
economy that guarantees all workers the right to come together and have 
a voice in their workplace and no longer leaves most workers behind. 
Meaningful policy changes like the PRO Act are crucial for restoring a 
---------------------------------------------------------------------------
fair balance of power between workers and employers.

    Thank you and I look forward to your questions.
                                 ______
                                 
    The Chair. Thank you very much.
    Mrs. Heldman. Can you turn on your mic?

        STATEMENT OF GRACIE HELDMAN, WORKER, PANDORA, OH

    Ms. Heldman. Thank you, Madam Chair. My name is Gracie 
Heldman and I live in Pandora, Ohio. I would like to thank the 
Committee for inviting me here today to tell my story. This is 
a story about a company that has broken the law for 20 years to 
stop its workforce from joining a union.
    I am a long time employee of Heartside Solutions in McComb, 
Ohio. The company has huge bakeries all across the country. 
They make cookies, crackers, bars, and other baked goods for 
companies like Kellogg, Nabisco, and General Mills. There are 
over 1,000 of us in the McComb plant that runs 24 hours, 7 days 
a week. I have been working at Heartside for over 33 years, and 
I can tell you working in a huge industrial bakery is hard 
work. The hours are long, and the pain can be really bad, 
especially in your wrist, shoulders, back.
    The company does not take health and safety seriously, so 
it is not really surprising the McComb bakery has been cited by 
OSHA many times and this is one of the worst offenders in Ohio. 
It was one of the main reasons so many of us have been wanting 
to join the bakers' union since the late 90's. We have been 
overworked. We have been injured on the job, disrespected by 
supervisors, and forced to work in bad conditions. We wanted a 
union to protect us while we were at work, to give us a say 
about the conditions we had to work under, and to help us get 
respect from our bosses. In the early 2000's, there was a lot 
of support for the union.
    Most of us were fed up with the way we were being treated. 
In 2002, over 65 percent of us signed BCTGM union cards so that 
we could have an election to vote on the union. That seems 
simple enough. But instead of having the election soon after we 
filed a petition, the company was able to stall and delay the 
election for over 2 months. This gave the company plenty of 
time to run an anti-union campaign and scare the workers, which 
is what they did. First off, the company hired union busters 
that walked the floor of the bakery, spied on us, held 
mandatory anti-union meetings. They told us the plant would 
close, that we would lose our wages and benefits, and that we 
would be forced to go on strike.
    If we didn't go to these meetings, we would be fired. Then 
the company actually fired seven people that supported the 
union. They really scared people. Many of these people, they 
wanted to join the union, had signed union cards, were too 
scared to support it. When we finally had a union election 
after the company's months of delays, many of these unions for 
us voted no and we lost the election. They were scared and felt 
the law did not protect them. The law was just not on our side. 
If the Pro Act had been in place, we would have had the 
election earlier, the company would not have been able to hire 
union busters and lie about the union, and the company would 
have suffered major penalties for firing union supporters.
    We would have won the first election almost 20 years ago. 
After the election of 2002, the union filed charges with the 
NLRB. Seems to me this was an open and shut case, but the case 
took more than 8 years to be decided. The Federal Court of 
Appeals finally found the company guilty, but only brought back 
two of the workers. For firing workers, breaking Federal labor 
law and dragging the NLRB case through the courts. For 8 years, 
the company only received a slap on the wrist, and we still 
didn't have the protection of a union. The Federal Court of 
Appeals did order a rerun election.
    Once again, the company stalled and delayed the day of the 
election. The company ran a very vicious campaign. Hispanic 
workers like me were targeted. Many were told they would be 
deported if they supported the union. We finally had a rerun 
election in 2010, but the company had scared the workers so bad 
they voted against the union. Again, the union filed charges 
against the company, but it didn't make any difference. This 
was a really tough time for many of us that had been supporting 
for so long the union. I had coworkers that I was close to, 
they committed suicide.
    Many others got severely depressed. From a personal 
standpoint, things went from bad to worse. A couple of years 
ago, a coworker found bedbugs in some of the cases and of 
course, they blamed us workers for this. The supervisor made a 
whole line of women march into their first aid room where we 
were told to strip so a nurse could examine us for bedbugs. If 
we refused, we would be punished, sent home without pay, and 
possibly fired. So we stayed in line and stripped so we could 
be searched. It was humiliating. The next day, rumors swirled 
about women and their granny pants going around the plant. It 
could only have come from supervisors. This was such a 
degrading experience that I will never forget.
    Last year, we had our third attempt in 20 years to join 
that union. We had more than 60 percent of 1,200 workers sign 
union cards, just like the previous election. The company hired 
union busters, spent 3 months trying to put fear into the 
workforce. This time, they really focused on the Hispanic or 
Hispanic workers again. Many were threatened with deportation 
if they supported the union and voted yes. Even at the height 
of the pandemic, the company forced us to attend mandatory 
meetings. They set up a big tent outside the plant to make it 
look like we would be safe. They squeezed more than 150 of us 
inside a tent, sitting side by side, less than two feet apart, 
even though people were scared.
    I really thought we had a shot to win this election. We got 
closer than ever before in this election, but it was not enough 
to overcome the company's vicious anti-union campaign. For over 
20 years, we have fought to join the BCTGM. For over 20 years, 
I have seen the law look the other way. Nothing protected our 
rights to join a union. And the worst part of it all is the 
company knew that. They knew they could do whatever they wanted 
and at worst they would get a slap on the wrist.
    I am just one worker who wants to join a union, but there 
are millions out there in America. They would love to join a 
union so they can have dignity, justice, and respect, and not 
have their rights stolen.

    [The prepared statement of Ms. Heldman follows:]
                  prepared statement of gracie heldman
    Thank you, Madam Chair. My name is Gracie Heldman and I live in 
Pandora, Ohio.

    I would like to thank the Committee for inviting me here today to 
tell my story. This is a story about a company that has broken the law 
for 20 years to stop its workforce from joining a union.

    I am a long-time employee at Hearthside Food Solutions in McComb, 
Ohio. The company has huge bakeries all across the country that make 
cookies, crackers, bars and other baked goods for companies like 
Kellogg, Nabisco and General Mills.

    There are over one-thousand of us in the McComb plant that runs 24 
hours, 7 days a week.

    I have been working at Hearthside for over 33 years, and I can tell 
you working in a huge industrial bakery is hard work. The hours are 
long and the pain can be really bad, especially in your wrists, 
shoulders and back.

    The Company doesn't take health & safety seriously so it's not 
really surprising the McComb bakery has been cited by OSHA many times 
and is one of the worst offenders in Ohio.

    That was one of the main reasons so many of us have wanted to join 
the Bakery Workers Union since the late 90's. We have been overworked, 
we've been injured on the job, disrespected by supervisors, and forced 
to work in bad conditions. We wanted a union to help protect us while 
we were at work, to give us a say about the conditions we have to work 
under, and to help us get just a little bit of respect from our bosses.

    In the early 2000's there was a lot of support for the union. Most 
of us were completely fed up by the way we were being treated. In 2002, 
over 65 percent of us signed BCTGM union cards so that we could have an 
election to vote on the union.

    That seems simple enough but instead of having the election soon 
after we filed the petition, the company was able to stall and delay 
the date of the election for over 2 months. This gave the company 
plenty of time to run an anti-union campaign and scare the workers. 
Which is what they did.

    First off, the company hired union busters that walked the floor of 
the bakery, spied on us, and held mandatory anti-union meetings. They 
told us the plant could close, that we'd lose our wages and benefits, 
and that we'd be forced to go on strike.

    If we didn't go to these meetings we'd be fired.

    Then the company actually fired seven people that supported the 
union. That really scared people. Many of those people that wanted to 
join the union, and had signed union cards, were now too scared to 
support it.

    When we finally had the union election, after the company's months 
of delays, many of these union supporters voted NO and we lost the 
election. They were scared and felt unprotected by the law.

    The law was just not on our side.

    If the Pro Act had been in place, we would have had the election 
earlier. The company would not have been able to hire union busters and 
lie about the union. And the company would have suffered a major 
penalty for firing union supporters.

    We would have won that first election almost 20 years ago!

    After that election in 2002, the Union filed charges with the NLRB. 
It seemed to me this was an open and shut case. But the case took more 
than 8 years to be decided.

    The Federal Court of Appeals finally found the company guilty, but 
only brought back two of the seven workers!

    For firing workers, breaking Federal labor law, and dragging the 
NLRB case through the courts for 8 years, the Company only received a 
slap on the wrist. And we still didn't have the protection of a union.

    The Federal Court of Appeals did order a re-run election.

    Once again, the company stalled and delayed the date of the 
election. Then the company ran a vicious anti-union campaign. Just like 
the first campaign, we were forced to attend mandatory meetings where 
we heard the lies all over again.

    Hispanic workers like me were targeted. Many were told they'd be 
deported if they supported the union.

    We finally had a re-run election in 2010, but the company had 
scared the workers so bad they voted against the union. Again, the 
Union filed charges against the company but it didn't make any 
difference.

    This was a really tough time for many of us that had been 
supporting the union for so long.

    I had co-workers that I was close with who committed suicide.

    Many others got severely depressed.

    But leaving wasn't really an option for a lot of folks. We needed 
to work to put food on the table and there's not a lot of jobs in and 
around McComb.

    From a personal standpoint, things went from bad to worse.

    A couple of years ago the company found bed bugs in some of the 
flour and other products. Of course, they blamed us workers for this.

    The supervisors made a whole line of women march into their offices 
where we were told to strip so a nurse could examine us for bed bugs.

    If we refused, we would be punished, sent home without pay and 
possibly fired. So, we stayed in line and were strip searched. It was 
humiliating.

    The next day rumors about women in their ``granny panties'' were 
going around the plant. It could only have come from the supervisors. 
This was such a degrading experience that I will never forget.

    Last year we had our third attempt in 20 years to join the BCTGM. 
We had more than 60 percent of 1,200 workers sign union cards. 
Conditions at the plant kept getting worse. And everyone's stress 
levels were high because of the threat of Covid-19. More than thirty 
workers contracted the corona virus during the spring and summer of 
2020, so we were all worried.

    Just like the previous elections, the company hired union busters 
who spent 3 months trying to put fear into the workforce.

    This time, they really focused on my Hispanic co-workers. Again, 
many were threatened with deportation if the union was voted in.

    Even at the height of the pandemic the company forced us to attend 
mandatory meetings. They set up a big tent outside the plant to make it 
look like we would be safe. Then they squeezed more than 150 of us 
inside the tent seating us side by side less than 2 feet apart.

    Once again, they threatened loss of wages and benefits if we voted 
for the union.

    Even though people were scared I really thought we had a shot to 
win this election. But the company had scared the workers so bad that 
we were never really given a fair chance to make a decision about 
joining the BCTGM.

    We got closer than ever before in this election but it was not 
enough against the company's actions.

    For over 20 years we have fought to join the BCTGM. For over 20 
years I have seen the law look the other way. Nothing protected our 
right to join a union. And the worst part of it all, is that the 
company knew that. They knew they could do whatever they wanted and at 
worst, they'd get a slap on the wrist.

    I'm just one worker who wants to join a union. But there are 
millions more like me. We just want a fair chance.

    Thank you.
                                 ______
                                 
    The Chair. Thank you. Thank you, Mrs. Heldman, I appreciate 
that.
    Ms. Sarolia.

  STATEMENT OF JYOTI SAROLIA, PRINCIPAL AND MANAGING PARTNER, 
                ELLIS HOSPITALITY, TEMECULA, CA

    Ms. Sarolia. Good morning, Chair Murray, Senator Braun 
sitting in for Ranking Member Burr and distinguished Members of 
the Committee. What an honor and privilege it is here to sit 
here with you, and I thank you in advance for your time and 
your ability to listen to my story today. My name is Jyoti 
Sarolia. I am from Temecula, California, and I am the principal 
at Ellis' Hospitality that owned and operate seven hotels. 
Thank you very much for the invitation to appear before this 
Committee today. I am honored to share my story of small 
business ownership and discuss the views of local business 
owners everywhere as it relates to empowering American workers.
    I will focus my comments on Protecting the Right to 
Organize Act or Pro Act. This is an issue of great importance 
to the 730,000 franchise business owners like me who employ 
nearly 8 million workers in a range of industries, and I appear 
before you today on their behalf as well. With both respect and 
candor, let me say this, the Pro Act is the most anti-small 
business bill in the history of Congress. With the stroke of a 
pen upon enactment, the Pro Act's joint employer and 
independent contractor provisions alone would steal the 
American dream of business ownership from countless 
entrepreneurs.
    But indirectly I am also here to testify on behalf of all 
the bakers, physical therapists, realtors, freelancers, truck 
drivers, doctors, caterers, drivers, insurance agents, 
salespeople, commercial fishermen, stylists and many more who 
contribute so much to the economy and whose livelihood the Pro 
Act could upend. And not because of unionization, but because 
the Pro Act could practically demote any of these professionals 
from entrepreneur to employee. They don't want that, and I 
don't want that.
    As a franchise business owner, I have worked so hard to 
provide for my employees. My passion is making a difference in 
our team members' lives and growing more team members in the 
future so they can become upwardly mobile so that someday they 
can own their own hotel or franchise business if they want. And 
because, with due respect to great businesses like Starbucks 
and Chipotle, no matter how hard an employee works, you can't 
own a Starbucks and you can't own a Chipotle. But in 
franchising, you can own your own business. It doesn't matter 
if you are a man or a woman, what color is your skin, who you 
love, or where you came from.
    That is why it is a business strategy that every Member of 
the Senate should support. But instead, the Pro Act seeks to 
streamroll businesses run by women entrepreneurs, entrepreneurs 
of color, and others that operate and grow using the franchise 
method. And instead, the Pro Act seeks, through its joint 
employer and independent contractor provisions to transform 
franchise systems from a network of small businesses into one 
big business. Why would 47 Senators seek to consolidate so much 
corporate power at the expense of small businesses and owners 
like me? Put simply, this legislation could end the franchise 
business model, the business format that has perhaps provided 
the most accessible path to business ownership for 
entrepreneurs of all backgrounds. Why should 47 Senators seek 
to enhance organized labor's political power at the expense of 
women entrepreneurs and entrepreneurs of color like me?
    From the franchising perspective, these issues are bigger 
than the Pro Act today. The more important issue is that the 
incredible value of franchising needs to be more fully 
appreciated. My testimony today includes details on forthcoming 
Oxford Economics research that reveals three takeaways. First, 
franchises are locally owned and keep their resources in local 
community, unlike a business run by a faraway headquarters. 
Second, franchising offers a path to entrepreneurship to people 
of diverse backgrounds who would not otherwise own a business. 
Big corporations don't offer entrepreneurship.
    Last, franchise jobs are good jobs that offer comparable 
pay and benefits to other Main Street business jobs. Madam 
Chair, the pandemic has drawn a historic curveball at the 
hospitality industry. There was no playbook for how hoteliers 
or other franchise owners were supposed to navigate the world. 
But due to hard work, support from our franchise brands, and 
even some SBA assistance, we are still here today serving our 
employees, customers, and communities. Small businesses are 
just starting to recover, and now we are facing the Pro Act. 
Women and immigrants and people of color have faced enough 
barriers to business ownership over the years, haven't they?
    The Pro Act raises these barriers for people like me again. 
If you want to help build wealth for communities of color, if 
you want to support women entrepreneurs, if you want to give 
immigrants a shot at the American dream, and if you want to 
support people like me, then let's table the Pro Act and let's 
build better policies that will both promote workers' future 
and protect the local franchise business owners in your state.
    Thank you for the opportunity, and again your time, and 
what an honor and privilege it is to share our story.

    [The prepared statement of Ms. Sarolia follows:]
                  prepared statement of jyoti sarolia
    Good morning Chair Murray, Senator Braun, and distinguished Members 
of the Committee. My name is Jyoti Sarolia, and I am a Principal at 
Ellis Hospitality that owns and operates seven hotel properties in 
California. Our small business is named after New York City's Ellis 
Island, through which my family members entered America to pursue a 
better life. Thank you very much for the invitation to appear before 
this Committee to share my story of small business ownership and 
discuss the views of local business owners everywhere as it relates to 
empowering American workers in today's hearing. I will focus my 
comments on the Protecting the Right to Organize Act, or ``PRO Act.'' 
This is an issue of great importance to franchise business owners like 
me, and it is important that small business perspectives are heard by 
our Nation's leaders.

    I appear before you on behalf of the International Franchise 
Association. IFA is the world's oldest and largest organization 
representing franchising worldwide. Celebrating over 50 years of 
excellence, education and advocacy, IFA works through its government 
relations and public policy, media relations and educational programs 
to protect, enhance and promote franchising. IFA members include 
franchise companies in over 300 different business format categories, 
individual franchisees, and companies that support the industry in 
marketing, law and business development.

    With both respect and candor, let me say this: the PRO Act is the 
most anti-small business bill in the history of Congress. With the 
stroke of a pen upon enactment, the PRO Act's joint employer and 
independent contractor provisions alone would steal the American Dream 
of business ownership from countless entrepreneurs.

    There is a false notion that only businesses that have 
representation cases before the National Labor Relations Board are 
concerned about the PRO Act. This couldn't be further from the truth. 
Put simply, businesses do not react in a vacuum. If the PRO Act becomes 
law, franchise brands will react by offering fewer franchises, and as a 
result, people like me will be collateral damage. Senators, you cannot 
let this happen. Upending an entire business model and taking away 
business opportunities to people like me, just to increase union power, 
is unacceptable. There simply must be a better way to achieve the goals 
of the legislation.

    In my testimony, I will describe my small business story, share how 
my business serves its employees and local communities, reveal how 
hotels and other small businesses are recovering from the COVID-19 
pandemic, and show why the PRO Act needlessly threatens every small 
business during the economic recovery.
                        My Small Business Story
    My granduncles came to this country to achieve the American Dream. 
My grandfather, who was the eldest of the siblings, was not as educated 
as his brothers and decided to continue farming and stay behind. His 
two brothers, Dhayabhai and Santibhai, whom I call grandparents, along 
with four other friends in the area, decided to come to America. They 
had someone from their hometown who was already running a hotel in San 
Francisco to host them when they arrived.

    One can only imagine what life was like for my family, as they took 
3 months to finally dock at Ellis Island. They were detained as their 
health checks cleared and continued their journey via train to get to 
San Francisco. They then met their host and saw the life they could 
live while operating a hotel. From 1952 to 1957, both of my 
grandparents worked various jobs until they were able to save enough 
money to lease their first hotel, the Alder. Shortly after, their wives 
immigrated to help with the business. This hotel still remains in my 
extended family. Our hotel sign has also been displayed at the 
Smithsonian for almost two years.

    My parents then immigrated to the U.S. in 1967. In order for the 
family to grow their business, they called upon other family members to 
also join them in the business so they too could live their American 
Dream. My parents got to work right away, cleaning rooms and doing 
light maintenance.

    Having lived in the Alder Hotel owned by my extended family in 
downtown San Francisco until the age of 11, I learned first-hand many 
of the responsibilities that were involved in running and operating a 
successful hotel. I grew up learning the importance of hard work, 
gaining skills in carpet laying and fixing household appliances, like 
water heaters and toilets. I also later handled front-desk management, 
housekeeping, and so many other responsibilities. My father took on the 
responsibility of the more labor-intensive jobs, including home 
renovating, painting, and supply management. Together, we all pitched 
in to keep the business alive and our customers happy.

    Today, hospitality still runs in my blood. I bought my first hotel 
in 1996, and we now have seven properties and I oversee all aspects of 
operations. My focus is to work with my leadership and provide 
continued excellent service to our visitors and customers. Our mission 
begins with our employees, ensuring they are our priority so we can 
provide excellent service and care for our guests. This employee-first 
mentality has proven to be the key to our success through the years, 
and it remains my focus even now. Our mantra is, ``How can we better 
serve you?'' This is the conversation that permeates our service 
environment.

    Community service is also a major priority of mine. Active 
engagement with our local communities and business partners is 
essential to advancing our journey together. With this in mind, I've 
served on multiple boards, such as the Asian American Culture Society 
of San Diego and the Choice Hotels Owners Council (CHOC). I also 
proudly served as the first female Chair of the Franchise Advisory 
Council in 2018.

    As a franchise business owner, I have worked so hard to provide for 
my family, employees, customers and stakeholders in my community. But 
along the way, franchising has afforded me every opportunity to 
succeed, no matter where I came from, my background, my gender, color 
of my skin, or any other personal characteristic. It is a business 
format every policymaker should support.
              Background on the Franchise Business Format
    Franchising is perhaps the most important business growth strategy 
in American history. Today, there are more than 740,000 franchise 
establishments, which support nearly 7.6 million jobs and $674.3 
billion of economic output for the U.S. economy. \1\ ``Franchising is a 
method of marketing goods and services'' that depends upon the 
existence of the franchisor's control over a trademark, other 
intellectual property or some other commercially desirable interest 
sufficient to induce franchisees to participate in the franchisor's 
system by distributing goods or services under the franchisor's name. 
\2\
---------------------------------------------------------------------------
    \1\  Franchiseeconomy.com (2021).
    \2\  Joseph H. King, Jr., Limiting the Vicarious Liability of 
Franchisors for the Torts of Their Franchisees, 62 Wash. & Lee L. Rev. 
417, 420-21 (2005).

    Franchising democratizes business ownership for people of all 
backgrounds. There is a higher minority ownership rate among franchised 
businesses than in nonfranchised businesses: 30.8 percent of franchises 
were owned by minorities, compared to 18.8 percent of nonfranchised 
businesses. Asians, Blacks, Hispanics, and ``other'' minorities had a 
higher rate of ownership of franchises than nonfranchised businesses in 
2012, while American Indians and Pacific Islanders had roughly the same 
ownership rates among franchised and nonfranchised businesses. Asians 
owned 11.8 percent of all franchises, compared to 6.3 percent of 
nonfranchised businesses. Hispanics owned 10.4 percent of all 
franchised businesses, compared to 7.2 percent of nonfranchised 
businesses. Blacks owned 8.0 percent of all franchised businesses 
compared to 4.7 percent of nonfranchised businesses. \3\
---------------------------------------------------------------------------
    \3\  Franchised Business Ownership by Minority and Gender Groups. 
IFA Foundation (2018).

    Despite how it is often characterized, franchising is not an 
industry. Franchising is a business growth model used within nearly 
every industry. More than 230 different sectors that are represented in 
franchising, and franchise brand companies offer a huge range of 
services from lodging to fitness, home services to health care, 
plumbing, pest control, security, and lawn care.
    Furthermore, notwithstanding any popular misapprehensions, 
franchising consists of far more than merely the ``fast food'' 
industry. As you can see in the graphic below, there are far more local 
(50 percent of all franchised brands) and regional brands (34 percent 
of all franchised brands) whose names you might not recognize than the 
fast food giants that garner the most attention. In fact, 63 percent of 
companies that franchise are not in the food services at all, and 83 
percent are not in fast food. \4\
---------------------------------------------------------------------------
    \4\  FRANdata research. (2021).

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    .epsThere are two principal explanations given for the popularity 
of franchising as a method of distribution. One is that it ``was 
developed in response to the massive amounts of capital required to 
establish and operate a national or international network of uniform 
product or service vendors, as demanded by an increasingly mobile 
consuming public.'' \5\ The other is that ``franchising is usually 
undertaken in situations where the franchisee is physically removed 
from the franchisor, and thus where monitoring of the performance and 
behavior of the franchisee would be difficult.'' \6\ These two 
motivations are consistent with a business model in which the licensing 
and protection of the trademark rests with the franchisor and the 
capital investment and direct management of day-to-day operations of 
the retail outlets are the responsibility of the franchisee, which 
owns, and receives the net profits from, its individually owned 
franchise unit.
---------------------------------------------------------------------------
    \5\  Kevin M. Shelley & Susan H. Morton, ``Control'' in Franchising 
and the Common Law, 19 Fran. L. J. 119, 121 (1999-2000)
    \6\  Paul H. Rubin, The Theory of the Firm and the Structure of the 
Franchise Contract, 21 J. Law & Econ. 223, 226 (1978).

    It is typical in franchising that a franchisor will license, among 
other things, the use of its name, its products or services, and its 
reputation to its franchisees. Consequently, it is commonplace for a 
franchisor to impose standards on its franchisees, necessary under the 
Federal Lanham (Trademark) Act to protect the consumer. Such standards 
are essential for a franchisor that seeks to ensure socially desirable 
and economically beneficial oversight of operations throughout its 
network. These standards allow franchisors to maintain the uniformity 
and quality of product and service offerings and, in doing so, to 
protect their trade names, trademarks and service marks (collectively 
the ``Marks''), the goodwill associated with those Marks, and most 
importantly, the protection of the consumer. Because the essence of 
franchising is the collective use by franchisees and franchisors of 
Marks that represent the source and quality of their goods and services 
to the consuming public, action taken to control the uniformity and 
quality of product and service offerings under those Marks is not 
merely an essential element of franchising, it is an explicit 
requirement of Federal trademark law, which is discussed further in the 
section below titled ``Franchising already `heavily regulated.'''
           The State of the Small Business Economic Recovery
    The COVID-19 pandemic battered small businesses in historic ways. 
By August 2020, within the first 6 months of the COVID-19 outbreak, an 
estimated 32,700 franchised businesses had closed; 21,834 businesses 
were temporarily closed, while 10,875 businesses were permanently 
closed.

    While the pandemic affected nearly all small businesses, the SBA 
noted industry and demographic differences in the impact of the 
pandemic on business owners. Among demographic categories, there were 
larger declines for Asian and Black business owners. The total number 
of people who were self-employed and working declined by 20.2 percent 
between April 2019 and April 2020. The Hispanic group experienced a 
higher decline, at 26.0 percent. The highest declines were experienced 
by the Asian and Black groups, with a decline of 37.1 percent for the 
Asian group and 37.6 percent for the Black group. Meanwhile, leisure 
and hospitality had the largest decrease in employment, at 48 percent, 
and had the third largest small business share, at 61 percent. \7\
---------------------------------------------------------------------------
    \7\  Daniel Wilmoth, The Effects of the COVID-19 Pandemic on Small 
Businesses. U.S. Small Business Administration (2021).

    Franchise business owners have been grateful to policymakers for 
the Federal response. Congress provided $525 billion in emergency funds 
extended through the Paycheck Protection Program and $194 billion 
through the Economic Injury Disaster Loan program to help businesses in 
---------------------------------------------------------------------------
need.

    By the end of this year, franchising will have recovered to nearly 
2019 levels in most metrics, including business growth and gross 
domestic production. In 2021, 26,000 new franchise businesses will open 
and 800,000 new jobs will be added by new franchise businesses. 8.3 
million people will be employed by new franchise businesses by the end 
of this year. \8\
---------------------------------------------------------------------------
    \8\  Franchiseeconomy.com (2021).

    The hotel industry has been uniquely negatively affected by COVID-
19. According to the American Hotel and Lodging Association's July 2021 
analysis, the pandemic erased 10 years of hotel job growth. \9\ The 
pandemic also devastated the hospitality industry workforce. For every 
10 people directly employed on a hotel property, hotels support an 
additional 26 jobs in the community, according to a study by Oxford 
Economics. With hotels expected to end 2021 down nearly 500,000 jobs, 
based on the pre-pandemic ratio, an additional 1.3 million hotel-
supported jobs are in jeopardy this year without additional support 
from Congress. \10\
---------------------------------------------------------------------------
    \9\  Economic Impact of the US Hotel Industry. Oxford Economics 
(2021).
    \10\  Ibid.

    Leisure travel is starting to return, but the hotel industry's road 
to recovery is long and uneven, with urban markets disproportionately 
impacted. Projections have improved since January with the uptick in 
leisure travel, but the industry remains well below pre-pandemic 
levels. As of May of this year, twenty-one of the top 25 U.S. hotel 
markets remaining in a depression or recession. Urban hotels were still 
in a ``depression'' cycle while the overall U.S. hotel industry 
remained in a ``recession.'' Urban markets, which rely heavily on 
business from events and group meetings, continue to face a severe 
financial crisis as they have been disproportionately impacted by the 
pandemic. Urban hotels were down 52 percent in room revenue in May 2021 
compared to May 2019. \11\
---------------------------------------------------------------------------
    \11\  Ibid.

    Despite all of these economic headwinds, and if Congress does no 
harm, franchise businesses in all sectors will surely accelerate the 
post-COVID economic recovery. While the number of unemployed 
individuals peaked at nearly 30 million workers early in the pandemic, 
such workforce dislocation forced many individuals to try 
entrepreneurial ventures, including starting new franchise businesses, 
which will likely result in the economic growth cited above. This 
outsized growth should be expected because franchising has helped fuel 
recovery following past economic downturns. After the financial crisis 
from 2009-2012, employment in the franchise sector grew 7.4 percent, 
versus 1.8 percent growth in total U.S. employment. \12\
---------------------------------------------------------------------------
    \12\  FRANdata research (2021).
---------------------------------------------------------------------------
    Now the biggest questions facing franchise small businesses like 
mine during the economic recovery are legislative and regulatory risk. 
There is no more significant and avoidable threat to small business job 
creators than the PRO Act.
                         The Extremist PRO Act
    The PRO Act is perhaps the most anti-small business bill ever 
introduced in Congress. There must be a better way to advance worker 
rights in an evenhanded way. Instead, on the backend of a global 
pandemic that had a disproportionately negative impact on Main Street 
businesses, business owners are facing this bill. It is incredibly 
disheartening to small business owners that this legislation has 
already passed the U.S. House of Representatives and is cosponsored by 
47 U.S. senators.

    The PRO Act puts the very existence of franchise businesses in 
jeopardy. The PRO Act cobbles together more than 50 imbalanced 
amendments to the National Labor Relations Act which are designed to 
tip the scales against small businesses. Two provisions are 
exponentially worse than the rest for franchising--an industry that 
empowers new entrepreneurs to operate under a national brand, letting 
small businesses and national companies grow faster and contribute more 
to local communities and the wider economy. The enormous risk 
associated with the PRO Act will serve only to corporatize the 
franchise model, encouraging brands to grow through franchisor-owned 
outlets, while shying away from offering ownership opportunities to new 
entrepreneurs.

    First, the bill would enshrine in Federal law a boundless ``joint 
employer'' standard, making franchise brands responsible for actions 
taken by small businesses at the unit level. This puts franchisors at 
risk of being sued for things they never did and had no power to stop.

    Faced with the PRO Act's new liability regime, franchise companies 
are much less likely to partner with local entrepreneurs, which means 
small business ownership opportunities will dry up on Main Street. The 
joint employer standard created by the National Labor Relations Board 
in 2015 led to a nearly doubling of litigation against franchise 
businesses, cost franchising $33 billion per year, and preventing the 
creation of 376,000 new jobs in the four ensuing years. While the NLRB 
eventually restored the traditional, clear joint employer standard in 
2019, the PRO Act would reverse course, make that harmful standard 
permanent, and result in lower job creation and small-business 
formation.

    The bill's second provision directly impacting franchising is 
perhaps worse. It would institute a three-part, so-called ``ABC test'' 
to determine when individuals can be classified as independent 
contractors. The purpose is to classify more workers as direct 
employees, thereby making them easier to unionize. The PRO Act's ABC 
test language is so broad that it would likely define franchisees as 
employees of their brand, instead of the independent small business 
owners that they really are. This would eliminate the distinction at 
the heart of franchising--and the opportunities and incentives within 
the business model.

    As one consequence, these changes would mean hiring numerous 
attorneys at the franchisor level to oversee employment issues and 
claims over which the franchisor has no control. Ultimately, the 
additional costs to the franchisor would translate into additional cost 
to independent owners like me, that would make the franchise business 
model untenable. These changes would take away the equity and 
independence of franchise small business owners and would put their 
success and livelihoods, including mine, in jeopardy.

    Ironically, these changes would encourage concentration of business 
into one big corporation at the franchisor level. As franchise 
contracts come up for renewal, franchise brands will be encouraged to 
convert locations into corporate locations. Rather than assume the 
risk, they will grow using a corporate model instead.

    Without a doubt, these seismic shifts in employment policy would 
hurt small businesses and provide fewer opportunities, particularly for 
women and People of Color. Growing a business through the corporate 
model does not provide ownership or wealth building opportunities. We 
need policy and regulatory changes that will drive wealth creation and 
new ownership opportunities for the most underserved communities, not 
hinder it.

    Due in large part to its treatment of franchise small businesses, 
the PRO Act puts the national economic recovery at risk. As written, 
the PRO Act would harm current franchise owners through a potential 
massive expropriation of equity. It would harm potential franchise 
owners through a limiting of economic opportunities available to them. 
It would harm franchise employees through a sudden change of their 
places of work away from their communities and into a large 
corporation. Finally, it would harm franchise brands by upending the 
business model that they use to grow and expand in communities across 
the U.S.

                         California Experience
    In my home state of California, small business owners are 
constantly facing new public policy threats to how we operate.

    One of the most invasive laws passed in California has been 
Assembly Bill 5, or A.B. 5, which became effective in January 2020. The 
law established California's ``ABC test'' for independent contractor 
status. The upshot of A.B. 5 is that it classified nearly all wage-
earning workers as employees, and severely affected thousands of 
independent contractors that operated in the state.

    IFA and several other parties are challenging in court the 
California ABC test's application to franchisors and franchisees. IFA 
is arguing the test is preempted by the FTC Franchise Rule and the 
Lanham Act, imposes excessive burdens in violation of the Commerce 
Clause of the U.S. Constitution, and violates the Fifth and Fourteenth 
Amendments.

    Relevant to the PRO Act, the IFA lawsuit argues that California's 
ABC test is irreconcilable with the Federal laws that regulate 
franchising. Under Prong A of the A.B. 5 test, a person may not be 
classified as an independent contractor unless that person is ``free 
from the control and direction of the hiring entity in connection with 
the performance of the work, both under the contract for the 
performance of the work and in fact.'' Moreover, under Prong B, a 
person may not be classified as an independent contractor unless that 
person ``performs work that is outside the usual course of the hiring 
entity's business.'' \13\ In the context of a franchise relationship, 
under California law, the operation of a franchisee's business must be 
``under a marketing plan or system prescribed in substantial part by 
the franchisor,'' and ``substantially associated with the franchisor's 
trademark.'' Without meeting these requirement of the California 
Franchise Investment Law, a franchise brand's registration with the 
state would be rejected, but by meeting them, they run the very real 
risk of running afoul of the rigid ABC test under A.B. 5. This 
dissonance between the ABC test and the franchise business model was 
emphasized by the United States District Court for the District of 
Massachusetts in the case of Patel v. 7-Eleven, Inc.
---------------------------------------------------------------------------
    \13\  California Labor Code 2775(b)(1)(B).

    A.B. 5 itself recognized that it created an unworkable framework 
for workers in many industries, as the law as amended currently 
includes over 100 exemptions for categories of workers. These include 
licensed insurance agents, certain licensed health care professionals, 
registered securities broker-dealers or investment advisers, direct 
sales salespersons, real estate licensees, commercial fishermen, 
workers providing licensed barber or cosmetology services, and others 
performing work under a contract for professional services, with 
another business entity, or pursuant to a subcontract in the 
construction industry. \14\
---------------------------------------------------------------------------
    \14\  Text of California Assembly Bill 5 (2019).

    Since A.B. 5 became law, several other industry groups have fought 
for exemptions to the law. App-based transportation and delivery 
companies prevailed in A ballot initiative called Proposition 22 in 
November 2020 passed with 59 percent of the vote and restored app-based 
transportation and delivery companies as independent contractors under 
California labor law. Numerous lawsuits challenging A.B. 5, in sectors 
ranging from journalism to trucking, have been filed in state and 
---------------------------------------------------------------------------
Federal courts, and these legal challenges continue today.

    As poorly drafted as California's ABC test was, the PRO Act's ABC 
test is far more expansive. There are no worker exemptions in the PRO 
Act's independent contractor provision. Simply put, as harmful as A.B. 
5 is, it at least recognizes that the ABC test is inappropriate for 
determining independent contractor status in numerous industries and 
business sectors. The PRO Act in no way recognizes this fact, and 
instead imports a highly flawed standard across the board, applicable 
to all workers in all industries.
               Franchising Already ``Heavily Regulated''
    Senators should keep in mind that multiple Federal statutes 
currently provide the rules of doing business by the franchising 
method. Indeed, franchising is already a ``heavily regulated'' method 
of doing business, \15\ as it is fundamentally governed by the Lanham 
Act, the FTC Franchise Rule and multiple joint employment tests.
---------------------------------------------------------------------------
    \15\  Cislaw v. Southland Corp., 4 Cal. App. 4th 1284, 1288 (1992).

    As mentioned earlier, the Lanham Act is the Federal law regulating 
trademarks, service marks, and unfair completion, and it mandates that 
owners of trademarks must ``maintain sufficient control of the 
licensee's use of the mark to assure the nature and quality of goods or 
services that the licensee distributes under the mark.'' \16\ Moreover, 
because the Lanham Act provides that a trademark can be deemed 
``abandoned'' when ``any course of conduct of the owner . . . causes 
the mark . . . to lose its significance,'' \17\ franchisors have a 
strong incentive to control the nature and quality of the good or 
services sold by their franchisees. As a result, franchisors are 
compelled to establish and monitor brand standards and provide global 
oversight of their franchisees. Likewise, it is imperative that 
franchisees protect their franchisors' brands, and the trademark value 
of those brands. A franchisee, functioning as an independent operator 
under a Brand License, is trusted and relied upon (by the franchisor) 
to protect the trademark value in implementing brand standards, and to 
exercise day-to-day management over the operation, since the franchisor 
is not present at every individual franchise location. Because 
franchising requires the collective use by franchisees and franchisors 
of Marks, all stakeholders affiliated with a brand collectively share 
risks and rewards. For example, if a franchisee fails to take adequate 
steps to protect the brand or otherwise engages in an action that 
injures the brand's reputation, the damage inflicted on the brand 
impacts all of the brand's stakeholders, including all other 
franchisees and the consuming public. With that being the case, it is 
essential to franchising that all the stakeholders understand the 
expectations for brand protection standards and take all necessary 
action to ensure that those standards are met. Furthermore, these 
rights and obligations are enunciated in well-drafted franchise 
agreements and reviewed in advance under a prescribed set of mandated 
disclosures.
---------------------------------------------------------------------------
    \16\  15 U.S.C. Sec.  1064(5)(A).
    \17\ 17 15 U.S.C. Sec.  1127.

    The Federal Trade Commission (FTC) authorizes and regulates the 
sale of franchises in the U.S., and defines a ``franchise'' in part as 
``any continuing commercial relationship or arrangement'' whereby the 
franchisor promises that the franchisee ``will obtain the right to 
operate a business that is identified or associated with the 
franchisor's trademark. . . .'' \18\ In 1978, the FTC published the 
Franchise Rule, which provides prospective purchasers of franchises 
information they may use to weigh the risks and benefits of a franchise 
investment, and requires franchisors to provide potential franchisees 
with specific items of information about the offered franchise, its 
officers, and other franchisees. Importantly, the Franchise Rule 
mandates that a franchisor ``exert a significant degree of control over 
the franchisee's method of operation.'' \19\ However, many state 
independent contractor laws require businesses to classify workers as 
employees unless they are ``free from control'' and direction while 
performing their work. Taken in a literal sense, this requirement would 
ignore the realities of the franchise model, and so the conflicting 
``control'' requirements of the FTC's Franchise Rule and the Lanham Act 
must be viewed as preemptive. Below is a discussion of a recent 
Massachusetts decision in which a Federal judge ruled in favor of a 
franchisor based on the Franchise Rule's requirements, finding that the 
Rule preempted the conflicting state independent contractor standard.
---------------------------------------------------------------------------
    \18\  16 C.F.R. Sec. 436.1(h)(1) (the ``Franchise Rule'').
    \19\  Ibid.

    Franchising is also subject to joint employment tests under 
multiple Federal laws. Under the Fair Labor Standards Act, courts 
around the country have issued divergent rulings on the joint employer 
issue, most of which purport to apply the Department's previous, 
outdated joint employer regulation. The number of different standards 
and factors employed in each test by various courts has bewildered and 
frustrated employers seeking to operate franchise businesses 
efficiently and profitably, without inadvertently creating joint 
employment. By way of examples only, the Second Circuit has applied a 
six-factor test in Zheng v. Liberty Apparel Co., while the Third 
Circuit applied four different factors in Enterprise Rent-A-Car Wage & 
Hour Employment Practices Litigation, the Fourth Circuit utilized a 
different six-factor test in Salinas v. Commercial Interiors, Inc., 
while various cases in the Seventh Circuit have applied ``economic 
realities'' tests (that are indeterminate in nature), and the Eleventh 
Circuit applied an eight-factor test in Freeman v. Key Largo Volunteer 
Fire and Rescue Dept., Inc. Adding to this complication, under Federal 
civil rights laws, courts have applied (again, not always uniformly or 
---------------------------------------------------------------------------
consistently), a multi-factor ``common law'' test.

    Most relevant to the PRO Act, prior to the promulgation of joint 
employer regulations by the NLRB in 2020, courts and the Board 
interpreted ``joint employer'' status under the NLRA inconsistently, 
most notably adopting a standard in 2015's Browning-Ferris case that 
would find an employer to be the joint employer of another company's 
employees, where an employer exercised only indirect, limited, or 
routine control of an unrelated firm's employees, or perhaps only 
reserved that right to control.

    As discussed above, the PRO Act would create a severe conflict in 
Federal law. Long-standing Federal trademark law requires a franchisor 
to exert certain brand controls over its franchisees, to protect the 
franchisor, all franchisees, and most important, the consuming public, 
which can know with certainty that it will have the same quality of 
experience or purchase across a franchisor's numerous franchises around 
the country or around the world. The PRO Act, on the other hand, would 
use those legally required obligations to create liability for 
franchisors for acts over which they had no control, simply because 
they were fulfilling their obligations under the Lanham Act and FTC 
Franchise Rule. Put most simply, the PRO Act ultimately tells franchise 
brands, ``heads I win, tails you lose.''
                      Alternatives to the PRO Act
    There are so many better ways to promote both worker AND small 
business interests than the extremist PRO Act.

    The franchise business community stands ready to collaborate with 
senators to find policies that will better support workers and 
employers. We support efforts that encourage brands to share 
information and best practices with franchise owners on COVID-19 safety 
measures and employee education. Thus, rather than considering the 
extremist PRO Act, which would dramatically change liability rules 
during a small business economic recovery, the Senate should be 
proactively finding ways to encourage businesses to engage in important 
corporate social responsibility activities and develop apprenticeship 
training programs by providing a safe harbor for these practices from 
additional liability.
                 Myths and Realities About Franchising
    Through no fault of ours, franchise business owners have faced an 
increasing number of public policy threats to our mode of operation. 
One critic, Brandeis professor Dr. David Weil, whom the Committee is 
currently considering to return as Wage and Hour Administrator, claimed 
in his 2014 book, The Fissured Workplace: Why Work Became So Bad for So 
Many and What Can Be Done to Improve It, that businesses (namely, 
franchise brands) have increasingly shed their role as direct employers 
of the people responsible for their products, in favor of outsourcing 
work to small companies (franchise owners). While Dr. Weil may have his 
own ideological motivations for promulgating his assumptions, he claims 
that the result of the franchise business model has been declining 
wages, eroding benefits, inadequate health and safety conditions, and 
ever-widening income inequality for workers. These claims are simply 
not borne out by the facts.

    To test Weil's hypotheses, earlier this year the IFA asked Oxford 
Economics to examine the value of the franchising model along a range 
of dimensions. There were three goals for this research:

        (1) Analyze pay, benefits, and training at franchised firms and 
        compare these attributes with similar non-franchise employers 
        where possible;

        (2) Assess franchising as a path to entrepreneurship and 
        uncover areas where the business model provides vital support 
        to prospective business owners; and

        (3) Understand how franchisees are embedded in their local 
        communities by examining their supply chains and charitable 
        giving.

    While the full report will be released in Fall 2021, the primary 
findings of a survey of more than 3,500 franchisees is summarized 
below:

        (1) FRANCHISES OFFER PAY, BENEFITS, AND TRAINING ON PAR WITH 
        COMPARABLE NON-FRANCHISE SMALL BUSINESSES. To determine how 
        wages at franchise firms stack up, the report will explore wage 
        data from a sample of 3,700 franchise and 137,000 non-franchise 
        small businesses, drawn from a payroll data base. An 
        econometric analysis of workers' wages controlling for a 
        variety of factors finds that workers at franchise firms earn 
        slightly more than workers at non-franchise firms, although the 
        difference is statistically insignificant. This is consistent 
        with existing academic research, including Cappelli and Hamori 
        (2008) and Kruger (1991). Franchise firms in our dataset are 
        somewhat larger on average (13.6 versus 9.6 distinct workers 
        per month), in line with results from the 2016 Annual Survey of 
        Entrepreneurs. An analysis of newly hired workers also finds 
        that starting wages, wage growth, and worker turnover are 
        extremely close between franchises and non-franchises, while 
        franchise workers were somewhat more likely to be promoted to 
        manager (14 percent of remaining workers after 19 months vs. 11 
        percent at non-franchises).

        (2) FRANCHISING OFFERS A PATH TO ENTREPRENEURSHIP TO ALL 
        AMERICANS, BUT ESPECIALLY TO NEW ENTREPRENEURS AND WOMEN. The 
        2016 Annual Survey of Entrepreneurs (ASE) suggests that 
        franchise businesses tend to be larger than non-franchise 
        businesses. The report suggests that, on average, franchises 
        report sales 1.8 times as large as non-franchise businesses and 
        provide 2.3 times as many jobs as non-franchise businesses. 
        Sales and jobs in franchised businesses exceed non-franchised 
        businesses across all demographic cuts, including gender and 
        race. For example, Black-owned franchise firms earn 2.2 times 
        as much in sales compared to Black-owned non-franchise 
        businesses, on average.

        (3) FRANCHISES ARE LOCALLY OWNED AND THIS KEEPS RESOURCES IN 
        THE LOCAL COMMUNITY. Unlike the multi-unit company-owned 
        business model, franchises allow franchisees to buy and own the 
        units they operate. By doing so, franchisees essentially become 
        small business owners, who live and work in their communities. 
        The brands they represent do not ship workers in from other 
        parts of the country, but rather franchisees recruit and train 
        local residents. The franchise model therefore encourages local 
        employment and wealth-sharing with local communities. \20\
---------------------------------------------------------------------------
    \20\  Oxford Economics (2021).

    While some use Dr. Weil's core hypotheses as justification for the 
PRO Act, we can now see that many of Weil's core assumptions about 
franchising are incorrect. This forthcoming Oxford Economics report 
will show that franchises offer wages, benefits, and training on par 
with similar non-franchise small companies. The study will also show 
that franchising offers a path to entrepreneurship to all Americans, 
but particularly to first-time owners and women. Last, the report will 
highlight how franchisees are embedded in their local communities 
---------------------------------------------------------------------------
through their local supply chains and charitable giving.

    In sum, all of the economic opportunity and contribution made by 
businesses operating under the franchise model is on the line as the 
Senate considers the PRO Act. It's not too late for lawmakers to 
realize the unintended consequences of the PRO Act, to avert course, 
and to protect small businesses at a time when many Main Street owners 
are simply trying to pay their bills with uncertain income during the 
global pandemic. Millions of workers and companies, and not just 
franchises, will be harmed if the PRO Act ever becomes law.
                               Conclusion
    Franchise small businesses are poised to lead our country's 
economic recovery and are particularly well-suited to ensuring that 
hard-hit minority communities have access to the opportunity and equity 
they need to build back better. Unfortunately, the extremist PRO Act 
jeopardizes that.

    Put simply, this legislation could end the franchise business 
model, the business format that has perhaps provided the most 
accessible path to business ownership for entrepreneurs of all 
backgrounds. It makes little sense to promote organized labor's 
political power at the expense of women entrepreneurs, veteran 
entrepreneurs, LGBTQ+ entrepreneurs and entrepreneurs of Color.

    Thank you Madam Chair, for holding this hearing and for the 
invitation to speak on behalf of small business owners everywhere. 
While I am honored to participate today, it is important to recognize 
and respond to the legislative overreach represented by the PRO Act. I 
urge all members of this Committee to support locally owned businesses 
in your states by stopping this legislation. I look forward to 
answering any questions you may have.
                                 ______
                                 
    The Chair. Thank you again to all of our witnesses this 
morning. We will now begin a round of 5 minute questions of our 
witnesses, and I ask our colleagues again to please keep track 
of your clock. Stay within those 5 minutes. Mr. Pearce, the 
National Labor Relations Act has not been significantly updated 
since 1947.
    This failure to update the law has led to significant 
problems for workers trying to exercise their rights. And Dr. 
Schierholz, you have led research into the impacts of union 
membership for workers and the impact of declining union 
membership on working families for our economy. So let me ask 
both of you, what would be the impact of updating labor laws to 
enable more workers to have a voice in their workplace? Mr. 
Pearce, I will start with you.
    Mr. Pearce. Thank you for the question, Chair Murray. The 
National Labor Relations Act was created for the purpose of 
providing employees with the opportunity to have workplace 
democracy. Workplace democracy provides an opportunity for 
employees to negotiate a collective bargaining agreement. A 
collective bargaining agreement is essentially private law of 
the plant where--which is mutually negotiated and gives workers 
a voice. The impact of that would be to provide more 
protections to employees, more opportunities for employees to 
negotiate circumstances like the pandemic, to provide an 
ability for both the employer and the employees themselves to 
have equal voice at the table to overcome issues as they come 
up, whether they be catastrophic issues or economic issues, and 
wages and hours and safety issues.
    The Chair. Okay, thank you.
    Dr. Schierholz.
    Ms. Shierholz. What we know is over the last four decades, 
inequality has risen dramatically. Wages have really stagnated 
for working people for most of that period. And a big chunk of 
those trends is due to declining unionization. So the Pro Act, 
which would boost unionization, make it so workers who want to 
join a union, are able to do so. It would reduce inequality. It 
would put thousands of dollars per year in the pockets of 
working people. It would raise their benefits. It would raise 
their--improve their working conditions. It really would push 
us toward an economy that works for all that doesn't just work 
for a thin slice of people on the winning end of rising 
inequality.
    The Chair. Thank you. Mrs. Heldman, thank you for your 
courage today in telling your story. No one should be denied 
the ability to join together with other workers in the 
workplace to advocate for improved wages and working 
conditions. Tell us what it would mean for you to have a 
greater say in your workplace.
    Ms. Heldman. Well, it would mean----
    The Chair. Do you want to turn on your microphone?
    Thank you.
    Ms. Heldman. Thank you. It would mean to have a say on 
safety and issues on the workplace. And the Pro Act would give 
you the right, because without the Pro Act, you don't have 
that, you don't have the rights. With the Pro Act you would 
have your dignity, your justice, and respect, and you are going 
to be told by--when you are being stole your rights and 
everything, you can be told by policemen when you want to 
report this injustice, that you need a union that the law can't 
protect you.
    The Chair. Thank you. Dr. Shierholz, you have dedicated 
your career to studying the economics of work, including union 
memberships' effect on wages and job quality for workers of 
color and women. Why does union membership have such a positive 
impact on workers who make low wages or workers of color, 
women, and other groups that face barriers in the workplace?
    Ms. Shierholz. Yes, it is a good question. I can talk--I 
will talk first about the impact on women. We know that the 
unionization rate for men and women right now is about the 
same. Like it is no longer the case that workers--that women--
that men disproportionately are in unions. And one of the 
reasons for that is that unions really do help women more 
because they raise their wages, raise their benefits, raise--
improve their working conditions. We know one of the things 
that is still true in our society today is that women shoulder 
disproportionate responsibility for care work. One of the 
things unions do is make sure workers have greater paid sick 
leave, they are more likely to have vacation pay, holiday pay, 
more likely to have more input into their schedules, more 
advance notice of their schedules.
    Those are the kinds of things that make it possible for 
many women who have care responsibilities to work, or at least 
to work without enormous chaos added to their lives. And I will 
stop there because I have taken a bunch of time. But the 
benefits of unionization to workers, to the lowest wage workers 
are absolutely enormous.
    The Chair. Thank you very much.
    Senator Braun.
    Senator Braun. Thank you, Madam Chair. I think today the 
conversation gets framed very well by the testimony from Mrs. 
Heldman and Ms. Sarolia. As someone who has owned the business 
and treated my employees like family, that is a tragic story. 
That is the reason you need unions out there. But you can't 
necessarily generalize upon it. And like anything that is done, 
you do not want to throw a wet blanket on the point I made 
earlier, that if you are making it more difficult for small 
businesses to become large, you are defeating the purpose of 
even what you are trying to attempt here in the Pro Act.
    I think if we have a second round of questions I will have 
questions for the entire panel. I am going to start with Ms. 
Sarolia. You are in California. I cited earlier that my own 
business got there 10 years ago. And you have got--you are in 
the hotel business. What are you hearing from the abundance of 
other employers, especially in California, about something like 
this?
    I cited 280 organizations out there thinking that this Act 
is going to wreak havoc on the ability to start a small 
business and maintain it. What are you hearing across the 
spectrum in California?
    Ms. Sarolia. [Technical problems] answer the question that 
Senator Murray asked earlier is that for me, it takes away my 
independence to be able to directly work for my employees. A 
lot of my colleagues and I feel that we are one industry--
sorry, one of the industries that can work closely with our 
employees. And I have a great story. I had one hotel in 
Temecula where we groomed three general managers. So the upward 
mobility of any employee starts from housekeeping to front desk 
to all the way to management. We feel that this Pro Act would 
impede that and take away our independence to work directly 
with them.
    Senator Braun. Thank you. And chances are this is not going 
to pass because not all Democrats are for it. But then the next 
thing that will happen is you will get an executive order. And 
the bureaucracy and the regulatory side of life is just as 
complicated in many cases as it is with legislation coming down 
upon you. What do you--do you fear that if legislation isn't 
passed, and hopefully it won't in this particular Act because 
it needs a lot of refinement, what happens then? What has been 
your experience dealing with regulations through a bureaucracy 
as opposed to a law itself?
    Ms. Sarolia. I am going to take again--so there is some--it 
is not that we oppose the entire Pro Act. I do believe that 
there are--we need to sit together and work on ideas that we 
can work together that support laborers, but that doesn't 
destroy the franchise model. So I think every time an Act is 
passed, I don't think they look to how it affects small 
businesses. I think we need to do a better job writing policies 
that support us to be able to employ people in our community 
who have livelihoods that they have to provide for their 
families.
    Sometimes when we don't pass the correct Act, it impedes 
that. I just--25 years ago I got into this business of running 
a hotel. It was family run, right, so we all had family. Ten 
years later, we are employing communities. Today, our company 
is run by people that are not family. Most of my team members 
are outside. And anything I can do to help them grow, to pay 
them more, as the standard of living increases and rises, I 
want to have policies that support that. So I hope I answered 
your question.
    Senator Braun. I am going to get into one of the 
particulars of the Pro Act and I guess that is where we need to 
focus, because a lot of the general discussion I don't think is 
going to be as palpable to folks in terms of what this does. 
Pro Act would require employers to turn over the personal 
information of their workers to unions, including their shift 
information, emails, home addresses, and phone numbers. As a 
business owner, would you feel comfortable doing that in light 
of protecting the privacy of your employees?
    Ms. Sarolia. No, and I think it is very simple. We as the 
employer take the risk of our employees. So protecting them and 
their interests is our No. 1 priority. When it shifts to the 
franchisors, I don't know if the risk factor is there for them. 
So with that to be the case, I would say that is my statement.
    Senator Braun. Then this other question of the corporate 
versus franchisee. Do you consider yourself an employee of your 
brand company? And do you want to be an employee of your brand 
company, or do you need a separation like you might lose 
through this?
    Ms. Sarolia. No, Senator, thank you for asking that 
question. I am an independent entrepreneur. Local franchise 
businesses owners like me have direct control over their own 
hiring practices, working conditions, wages, and hours of 
operation. I have a separate employer identification number 
from all of my franchisees. They file their own taxes, are 
responsible for following all applicable state, local, and 
Federal law. So we are already being governed to take care of 
our employees and their best interest. I just don't think--the 
answer is no to your question.
    Senator Braun. Thank you.
    The Chair. Thank you.
    Senator Hassan.
    Senator Hassan. Thank you. Sorry for the delay and thank 
you, Chair Murray and Ranking Member Braun this morning. And 
thank you to all of our witnesses for being here. First 
question to you, Mr. Pearce. We have to protect the rights of 
workers to organize and collectively bargain. So-called right 
to work legislation has been passed into law in a number of 
states. And there are ongoing efforts to pass these bills in 
other states, including my home State of New Hampshire.
    We know that these so-called right to work laws are 
actually right to work for less laws, making it significantly 
more difficult for workers to form unions and resulting in 
lower wages, more dangerous working, conditions and less access 
to health care and other benefits. So, Mr. Pearce, can you 
explain what Congress can do to address this and help workers 
collectively bargain?
    Mr. Pearce. Thank you for the question. I am so eager that 
I didn't turn on my mic. Well the Pro Act deals directly with 
the question of right to work laws. They eliminate that from 
the National Labor Relations Act. Right to work law exists 
because it was part of those compromises that were made for the 
passage of the National Labor Relations Act, and it has an 
insidious past. Right to work laws emanated from legislation 
that was just insisted by Southern Senators in order to 
substantially control people of color in the South from being 
able to join and enjoy the benefits of unionization.
    Those vestiges of slavery, adjacent processes need to be 
removed. Otherwise you have situations where a union is trying 
to effectively represent employees, including employees that do 
not have to pay a dime toward those services, yet the union 
would have to have a duty under the law to zealously represent, 
irrespective of how expensive the process is. That has to 
change.
    Senator Hassan. Thank you. Another question for you. The 
COVID-19 pandemic presented new health and safety challenges 
for workers all across the country and highlighted widespread 
inequities. The pandemic has also made it more difficult for 
workers to gather and discuss challenges that they face in the 
workplace. So how can Congress help address worker inequities 
that the pandemic exacerbated?
    Mr. Pearce. Well, the Pro Act provides opportunities for 
workers to be able to unionize more freely. Those oppositions 
to unionization impacts workers' ability to be able to deal 
with things like the pandemic. As I stated in my opening, it is 
because of many unions being present at a facility that 
protections were brought in, exposures to bad policies and 
vulnerabilities were made public as a result of union 
intervention. The Pro Act's provisions will provide that kind 
of protection for employees.
    Senator Hassan. Thank you. Dr. Schierholz, I have a 
question for you. We know that when workers organize, it can 
result in better working conditions and benefits across the 
board. This can be particularly meaningful for women whose 
earnings continue to lag behind their male counterparts. So can 
you talk about how expanding the rights of workers to organize 
will support women in the workforce, including helping them 
close the gender pay gap and increase retirement savings?
    Ms. Shierholz. Yes, that is an important--that is a really 
important point. And I talked a little bit about this, but I 
think what unions do is that they raise wages for workers by 
allowing workers to join together with their colleagues in a 
union and collectively bargain. We see higher wages that 
women--women in unions have higher wages than similar women who 
aren't in unions, better benefits, better working conditions.
    Then I mentioned this, but I will just say it again because 
it is so worth repeating, this idea that, the point that 
workers and unions have better schedules. They have better--
they have more control over their schedules, they have more 
advanced notice over their schedules. And so what that means is 
that people, predominantly women in the society who have care 
responsibilities, have more predictability in their job, and 
that makes their lives, their working lives much more possible.
    Senator Hassan. When they earn more, too, they can save 
more for retirement, right?
    Ms. Shierholz. Well put. Yes.
    Senator Hassan. Okay. Thank you. Last question for Mrs. 
Heldman. Many workers aren't aware of the rights that they have 
in the workplace, including laws to protect the rights of 
workers to organize. You have tirelessly worked to collectively 
organize your workplace. Do you think workers need to have 
greater access to information about their right to organize 
under the law? You need to----
    Ms. Heldman. Yes, they do. And I mean, when we try to 
organize, they always really go out there and they--some of 
these people do not know their rights to organize, so they 
intimidate them. And they follow you around and they take you 
to these captive meetings. And as you are walking into these 
captive meetings, they are yelling, vote no, vote no at the top 
of their lungs. That is our supervisors, and they sit up there, 
they say vote no.
    You go out on the floor, and they follow you around, they 
still intimidate you. And they tell these coworkers of mine, 
they say, if you vote yes for the union, you are going to get 
fired. And some of these people don't really know their rights 
and they lie to them about the union, and they lie to them 
about everything.
    That is why we haven't won our union elections. If not, we 
would have had it 20 years ago. We would have won the first 
one.
    Senator Hassan. Thank you very much. And thank you, Madam 
Chair, for your indulgence.
    The Chair. Thank you.
    Senator Tuberville.
    Senator Tuberville. Thank you, Madam Chair. And thank you 
for being here today, all four of you. This a short statement 
here. It is a huge topic back in my State in Alabama, huge. 
Basically this is coming from the people of Alabama. The Pro 
Act represents a massive power grab to override the will of the 
voters. Federal power grabs like these are unconstitutional and 
go against our entire system of Government. The Pro Act would 
overrule the right to work laws across the country and force 
tens of millions of employees to join a union.
    Currently, only 27 states have a right to work laws. 
Alabama is one of them. Right to work laws give workers 
freedom. And more importantly, it gives workers the freedom to 
choose whether to unionize or not. Alabama's right to work law 
has been a huge benefit for our state because we are in the car 
business. We have got about six or seven car businesses and 
manufacturers from Hyundai, Honda, Toyota, Mercedes, 40,000 
manufacturing jobs, 40,000. We make a million cars, trucks a 
year, $8.2 billion, and we are not a union.
    By forcing unionization on every worker and sector, many 
industries would grind to a halt, especially in Alabama. 
Employer costs would skyrocket, which could lead to a loss of 
jobs, not to mention like States like Alabama lose the ability 
to recruit companies. The top 10 CEO this morning was in my 
office, Airbus, a large corporation. I asked him about the Pro 
Act, and he said it would kill us. Absolutely kill us.
    This corporation would move back to Europe and to other 
countries. They have to make a profit. But they also love to 
come where people have the right to choose. On top of that, 
according to the State Policy Network, the Pro Act would 
negatively affect 57 million American workers who call 
themselves freelancers. Unions, to some degree, they have 
helped this country. They have helped the country. However, in 
2021 there are multiple Government entities that exist purely 
to uphold workplace safety standards and protect workers. We 
got the--we have got Department of Labor. We got OSHA. Are we 
going to start unions and just close that down.
    We need to give workers the ability to choose. This is a 
free country. Choice creates competition, competition breeds 
success. We used to compete in this country. We are not 
competing anymore. We want everybody to be the same. Everybody 
is not the same. You have got the right to do as much as you 
want to do, if you put your nose to the grindstone. President 
Biden says, and I quote, ``every worker should have a free and 
fair choice to join a union.'' I believe in that statement. But 
the Pro Act would tip the scales.
    Among other things, as you have heard, it requires workers' 
personal contact information to be sent to a union. We are 
already having problems with that. Removes voters to a secret 
ballot, subject of the union coercion, being able to vote out 
loud. And limits the information workers may receive during a 
union organizing campaign. That doesn't sound free to me.
    This is still a free country, folks, free country, and this 
Pro Act is not going to do anything for us, especially for the 
people that run this country. That is the hard working 
Americans. Mrs. Sarolia, you mentioned that in your testimony, 
the COVID-19 pandemic hit businesses especially hard. If the 
Pro Act is passed, how will this provision slow down this much 
needed recovery and why?
    The Chair. You can turn on your microphone, please.
    Ms. Sarolia. Can you repeat it one more time?
    Senator Tuberville. If the Pro Act is passed, how is that 
going to affect your business?
    Ms. Sarolia. More so business--it is like 25 years ago we 
got--I owned my first hotel in 1996 thinking that I would be 
able to employ people in my community. If the Pro Act passes, I 
think the control that I had over overseeing my operation would 
be given to a third party like the unionization or even our 
franchisor. Someone that sits 4000 miles away from me wouldn't 
be able to control that. I am going to tell you a little quick 
story what happened in 2020, right.
    Our Government shut us down for good reasons to make 
everyone feel safe. I was scared and I asked my family members, 
we are going to have to jump in and pitch in and help our 
employees because we need to allow them to be comfortable doing 
what they need to do. So we got--we retained 100 percent of the 
people that stayed. For those that didn't stay, we had to roll 
up our sleeves and start working again.
    If the Pro Act passes, I don't think we would be having a 
business to run anymore. That would be No. 1, because the scare 
of anybody wanting to own under that Pro Act, I don't think it 
is going to be a small business and I don't think it is going 
to get an American dream story, and I definitely don't think I 
would be an entrepreneur. So I hope I answered your question 
with that.
    Senator Tuberville. Thank you. Thank you, Madam Chair.
    The Chair. Senator Casey.
    Senator Casey. Thank you, Chair Murray. And I want to thank 
you and Senator Braun. Especially want to commend and salute 
the work of Senator Murray to lead the introduction of and work 
to pass the Pro Act. And I want to as well thank our witnesses 
for being here for your testimony. I want to especially thank 
Mrs. Heldman for her testimony and her uncommon courage coming 
forward. You are--that kind of courage is, as I said, all too 
rare. The fact that you came forward to help others come 
forward to tell their story. And we appreciate that. At the end 
of your testimony, you articulated the three words that you 
hope will encapsulate what a union would mean to you, dignity, 
justice, and respect.
    I want to commend you for reminding us that is what this 
debate is all about when it comes to unionization. So I salute 
your courage. I wanted to pose a question to Mr. Pearce, and I 
appreciate your work in this area, for many, many years and 
your scholarship, and for reminding us what the National Labor 
Relations Act it is not advisory. It is a statute that was 
passed in 1935. And I think we have seen it degraded for many 
of the reasons you outlined.
    It is interesting that we need reminders but section 1, 
that you highlight on page 1 of your testimony, that outlines 
the protection, ``by workers of full freedom of association, 
self-organization, and designation of representatives of their 
choosing.'' Nothing could be more American than that. But it 
has been badly undermined not only by the National Labor 
Relations Board, but by these efforts that Mrs. Heldman 
outlined. These union busting tactics that have gone on for 
years. I have seen it firsthand in Pennsylvania in many 
contexts, usually in the context over the last 20 years in 
health care, union busting law firms.
    These are white-shoe law firms, big, big corporations, 
really. They get paid by the hour to bust unions. Simple as 
that. And it is in direct conflict with the National Labor 
Relations Act. So, Mr. Pearce, I would ask you this. How can we 
strengthen protections for workers when they are negotiating 
with their employer for the very first time?
    Mr. Pearce. Thank you, Senator Casey, for that question. It 
is a vital piece of the representation process to be able to 
effectively negotiate during the time that you first receive 
certification. The workers are hoping for the best. The 
employer sometimes does not necessarily take the union busting 
tactic during the election campaign. They lay back and then 
they wait for bargaining to hardball to be entrenched to be 
extremely recalcitrant.
    Consequently, you have statistics that the Kate 
Bronfenbrenner study that I put in my testimony shows that less 
than 50 percent of unions are able to get a first contract in 
the first year. The Pro Act, what it does is it intensifies the 
obligation during that first year of negotiations.
    It requires mediation. It requires that if the parties 
cannot reach an agreement, then it can be put to arbitration, 
where arbitrators make a determination as to whether or not 
negotiations are being properly affected. The full court press 
on the first year of negotiations is a vital piece of the Pro 
Act that would facilitate bargaining going forward, because 
once that first year has passed and once that first contract is 
negotiated, collective bargaining will benefit for everybody.
    Senator Casey. Thank you very much. I will just conclude 
with this Dr. Shierholz. I don't have time to ask you a 
question. I will post some in writing. But on page one of your 
testimony, you said, and I quote, ``a worker covered by a union 
contract earns 10.2 percent more in wages than a peer with 
similar education, occupation, and experience in a non-
unionized workplace in the same sector.'' That and so many 
other statements that you articulated here today should be 
lifted up. Thank you, Madam Chair.
    The Chair. Thank you.
    Senator Moran.
    Senator Moran. Madam Chair, thank you very much. Let me 
direct my questions to Ms. Sarolia. Thank you, first of all, 
for being here today. I want to do what I can to increase the 
number of jobs that are available to Americans, and one of the 
likely places for that to occur is in entrepreneurship, new 
businesses, startups.
    One of the places that happens frequently is in franchise 
relationships. So I want to see what you can tell me about how 
the Pro Act would hinder or help in regard to that new business 
startup and the opportunity for franchises to continue to grow. 
How would the franchise business model ability to promote 
entrepreneurship be affected by the Pro Act? I am sorry----
    The Chair. If you can turn your mic on.
    Ms. Sarolia. Apologize for always--Senator Murray for 
forgetting that. The Pro Act is trying to put another barrier 
between for us having direct control over our business versus 
what the idea of what Pro Act is wanting to do, having the 
franchisor be involved in running our business. I don't think 
the ability for me to be able to grow would be there anymore, 
because it wouldn't be my business that I would be running. It 
would be someone else's business I would be running.
    You can see how that is not really the right direction that 
we should go down to. My family has been in this business since 
1952. Entrepreneurship is all they have ever done. I mean, we 
have grown from one hotel to if you look at my uncles and my 
aunts, we probably have 32, but none of us look like we have 32 
hotels.
    We are normal people, we roll up our sleeves, we are 
cleaning toilets, making rooms. I don't know if we would be 
able to do that if a franchisor gets to have better control 
over our business. I don't know if I answered your question.
    Senator Moran. You did. And I am sorry that you had to 
answer it twice. Three hearings, all at 10 o'clock this 
morning. Ms. Sarolia, the California AB5 experience with the 
ABC test led, I think, to some pretty real consequences for 
many, many California workers who had their livelihoods 
uprooted as a result of these policies. As you know, AB5 ended 
up being amended to allow exemption for certain category of 
workers.
    The Pro Act contains no workers exemption. Given the broad 
consequences of AB5 and the ABC test on California workers, 
does it seem like an appropriate standard for the Federal 
Government? Does AB5 seem like it should be the standard for 
what we might do in Congress?
    Ms. Sarolia. The answer to that question is no. While the 
Pro Act proposes to amend the National Labor Relations Act in 
AB5 amended California State law, franchises' reaction to the 
risk involved with both proposals has to be identical.
    Corporate franchise brands will react to the increased risk 
by not franchising, taking back contracts when they are up for 
renewal, or otherwise taking away opportunities to risk what 
they created by both proposals. So what I am trying to say is 
that maybe my franchisor doesn't want to go into business with 
me because of the Pro Act, which definitely takes away from 
being an entrepreneur and a small business owner.
    Senator Moran. Thank you for your answers. Thank you, Madam 
Chair.
    The Chair. Senator Kaine.
    Senator Kaine. Thank you, Madam Chair and Senator Braun. 
And thank you to the witnesses. So I do think we all come at 
this from our own perspective. And it has been helpful to hear 
Mrs. Heldman and Mrs. Sarolia and Senator Braun share 
perspectives. So I will just offer mine in a minute. I grew up 
in a in a household very familiar with unions and small 
businesses. My dad ran an ironworking shop in the stockyards of 
Kansas City, Missouri, Iron Crafters. Iron worker organized, 
union members.
    Five employees and a tough year, plus my mom and my two 
brothers and me. And in a really great year, maybe eight or 
nine employees, and union and a small business were just fine 
within the franchise. So I am hearing there are different 
business models, but union and small business work just fine. I 
am sure my dad had some disagreements over time with unions in 
a negotiation. You are going to do that.
    But he always would tell us my business acumen will put my 
workers' kids through college, and their artistry and skill 
will put you boys through college. He told my two brothers and 
me that a lot. And I saw that they were artists. My dad, one of 
the honors of his life, was at one time the Iron Workers 
National Pension Fund, which has a board, three union reps, and 
three employer reps. Asked my dad to be on the board and he 
said, I only have five employees.
    I mean, this is a national union. Yes, but you are fair. 
You are a good business owner. We want you on the board. And he 
did that for about 10 or 15 years, and it was one of the 
professional honors of his life. I want to clear up a couple of 
misconceptions or maybe elaborate a little bit about the Pro 
Act. So a statement was made earlier that it would take away 
people's right to vote secretly in a union election. And my 
understanding is that is not true at all.
    The Pro Act basically maintains a requirement for secret 
ballot, except in this condition if an employer commits an 
unfair labor practice. And the unfair labor practices are so 
serious that it jeopardizes the ability to have a fair 
election, then the NLRB can order a rerun election by card 
check rather than by secret ballot.
    But everybody gets to cast a secret ballot in union 
election under the Pro Act unless the employer violates the law 
and violates it so seriously that intimidation is so likely 
that a card check is allowed. Am I wrong about that? That is 
how I read the Pro Act.
    Mr. Pearce. Is that to me?
    Senator Kaine. Yes, if you would.
    Mr. Pearce. Yes, sure. You are absolutely correct. And I 
also would like to take the opportunity, if I could, to 
create--correct the record with respect to another thing. In 
terms of personal--the supply of personal information, the 
Senators should know that Excelcia Underwear, which is a 
Supreme Court case, stated that unions have the right to get 
the names, the addresses, and the phone numbers of the workers 
that they are trying to organize because, of course, they are 
outside of the facility.
    Senator Kaine. Because in an election, the employer would 
have that information. And so to make it even, Steven, you 
would want to have a second issue. So I think it is really 
important, people have a right to secret ballot, and it is only 
after a finding of an unfair labor practice that it could be 
ordered by card check.
    Second, this is a really important thing. Mrs. Heldman 
talked about how hard it is to win a union election against the 
onslaught of an anti-union campaign. When you finally do win an 
election and when the employee say we want a union, I think it 
so outrageous that having lost an election the employer is able 
to stonewall for sometimes years at a time and not get a 
contract.
    I mean, it is like trying to overturn the results of an 
election. We saw an effort to do that here on January 6th. It 
wasn't too good. An election should have meaning. And so the 
provision in the first year to--if there is an election, if the 
employee say we want a union, that should be able to be 
converted into a contract in a reasonable period of time.
    Finally right to work. Virginia is a right to work state. 
But I want to focus on something that most people don't focus 
on, which is if the employees choose a union, then the union is 
required by law to negotiate for every last member of the 
bargaining unit, whether or not the person wants to join a 
union. That is a requirement of union, is it not?
    Mr. Pearce. That is correct.
    Senator Kaine. Right. So if the union is required by law to 
negotiate for everyone, then I don't think it is unfair for 
somebody to say, well, I don't want to join the union, but for 
there to be an agency fee.
    Okay, you may not want to join the union. You may not want 
to contribute to the union's political activities or whatever, 
but since the union is required by law to negotiate for you and 
you are getting the pension benefit and you are getting the 
salary and you are getting the health care benefit that the 
union is negotiating for you to say not only I don't want to 
join the union, but I also don't want to pay for the benefit of 
the representation that the union is required to carry out on 
my behalf, I just--I think the notion of the agency fee, 
letting that be negotiated, and if it is negotiated into a 
contract, letting that contract be upheld, just like we would 
uphold other contracts at law, seems to me to be very, very 
fair. With that, Madam Chair, I yield back.
    The Chair. Thank you.
    Senator Cassidy.
    Senator Cassidy. If there is ever a hearing that contrasted 
the two parties, it would be this, with this side interested in 
expanding corporate power, both the power of the company that 
would franchise to others, as well as the power of the union 
over the individual making her own decision, this is a bill 
that draws that contrast. My staff gave me, we should call this 
the Consolidation of Corporate Power Act, which the 
alliteration being CCP with all the kind of implications of 
that.
    By the way, there are some really specious logic in here. 
All due respect, Mr. Pearce, somehow in your discussion of the 
origins of right to work, you suggest that it is somehow 
embedded in racism, that the current practice is embedded in 
racism. I will tell you, in my State of Louisiana, Alabama, 
Tennessee, South Carolina, Mississippi, right to work states 
have the highest percentage of African-Americans in the Nation. 
The ability to attract good paying jobs with right to work laws 
has created untold economic opportunity for people of all 
races, but certainly those who are of color.
    Now, my gosh, we could say now you just go ahead and stay 
up North, where the unions traditionally discriminated against 
Blacks. Instead, we opened up the laws. People moved south. And 
now folks who formerly didn't have jobs, have great paying 
jobs, not because they are unionized, but because that is the 
industry standard. Now Dr. Shierholz, I am reading this 
thinking I am a doctor, I am not an economist, but in medicine, 
we contrast between association and causation.
    The fact that union membership has fallen, and income 
inequality has risen in many respects has no relationship 
whatsoever. If I may, it is clear that what has happened is the 
number of unionized manufacturing jobs has declined. Those of 
the service industry, SCIU has greatly increased. Because those 
manufacturing jobs have declined, in part because companies 
moved manufacturing overseas because inflexible work rules, 
inflexible work rules, created a cost disadvantage over 
factories, manufacturing plants that were located overseas.
    You can make the case that right to work laws is actually 
created the opportunity for manufacturing to remain in the 
United States because it is not just the wage, it is also the 
inflexibility of work rules that make it difficult. One example 
of this, and I would love your opinion on this, we are speaking 
about how union laws make things so much safer. There is 
Federal employees that didn't work for 14 months? They didn't 
work from home. They didn't work in the office.
    We paid billions in salaries to people who didn't work for 
14 months. So I called the supervisor. I can't get a passport 
for someone. Why are they not working? Well, the union won't 
agree to work rules. Wait, the union won't agree to work rules? 
Yes, they won't agree to the PPE requirements that would allow 
people to come in and work safely in order to process passports 
and so therefore we have got this backlog for however long. You 
want to take your, some--apparently there is a lot of people 
that want to get married in [inaudible].
    My office had to handle a lot of those, done by 
supervisors. May have changed now. 14 months, unions objected 
to that. Those are the kind of work rules that increased cost. 
And if it is not the taxpayer who just kind of sucks it up and 
takes it on the chin, if it is a manufacturing plant, they move 
elsewhere. I kind of dispute this motion--this notion that we 
are getting all this value added from this insistence on 
safety.
    By the way, I thought we had OSHA guidelines that kind of 
demanded safety. I thought OSHA--if not, we better go after the 
OSHA people if they are not doing their job. One example, I 
will just say this, your figure showing income equality as 
union membership. Think about your hospital, your major 
hospital in New York City, that CEO is probably making $5 
million, totally unionized workforce, totally unionized. And 
yet there is no relationship between she or he making $5 
million or maybe more, I am probably being conservative, well I 
am conservative all the time, but conservative for a New York 
CEO of a hospital.
    Relative to what the--it is all unionized. Again, just 
because you have an association doesn't mean a causation. We 
have been evolving from a manufacturing to a service industry. 
And as that happens, union membership has disproportionately 
moved to the public sector. Now, Ms. Shierholz, I see you 
writing things down. What would you say?
    Ms. Shierholz. Thank you. Thank you for the ability to talk 
on this. So you are absolutely right that causation doesn't--
that correlation does not mean causation. And in that 
testimony, that figure A that showed the really rough 
relationship between rising inequality and unionization, the 
text in there pointed out that this thing really does show the 
correlation. Rigorous research that digs in and really gets at 
causality does show that about a third of the increase in 
inequality between typical workers and workers at the high end 
was over the last 40 years, was due to the decline in 
unionization.
    It is not the whole--the whole rising inequality is not due 
to unionization, but a big chunk of it. And the decline in 
unionization is not primarily the result of the change in 
sectors from manufacturing, the shift from manufacturing to the 
service sector in this country. That had something to do with 
it. But if you look, there has been a decline in unionization 
both within manufacturing and within services. So a shift from 
one to the other doesn't--isn't the cause----
    Senator Cassidy. But in part, and I know I am over time, 
Madam Chair. I apologize. But that in part is because of right 
to work laws used as an economic development tool that brings 
benefits to people, people of color included, who otherwise 
would not have in states formerly impoverished, but now doing 
better.
    Ms. Shierholz. I will just say that rigorous----
    Senator Cassidy. Somebody else wishes to speak, that is 
fine. But she is giving me the nod.
    The Chair. Thank you. Thank you so much.
    Senator Murphy.
    Senator Murphy. Thank you very much. I was walking over 
here during Senator Cassidy's questioning, and he may have been 
covering some of the same ground that I hope to cover with you, 
Dr. Schierholz, on this sort of extraordinary increase in the 
gap between the pay of CEOs and average workers. And it sounds 
like that was the space that Senator Cassidy was into. Maybe I 
will just give you an opportunity to sort of continue to expand 
on your answer. But what is in people's heads just shake, I 
mean, frankly, Republicans, Democrats, conservatives, liberals, 
when you tell them that today the pay ratio for S&P 500 
companies from CEO to worker are 299 to 1.
    I mean, Connecticut, we have got a cable company which is a 
regulated industry in which the CEO is making 687 times the 
median worker at that cable company. Just doesn't make sense to 
anybody. And so maybe I will ask the why question. Right, you 
have got sort of a lot of data to sort of explain how 
unionization can shrink that differential between CEO executive 
pay and worker pay, which has never been bigger than it is 
today. But what drives that? Why is that the case?
    Ms. Shierholz. That is a really good question. I think the 
way that I think about this is, as we talked about, the decline 
of unionization explains a huge share of the rise in inequality 
over the last four decades. And the rise in CEO pay is a really 
big part of the rise in inequality over the last four decades.
    I think a useful way to think about it is the decline of 
unionization has led to a big shift, a big upward 
redistribution in money from workers to corporate executives 
and shareholders. And that is where the skyrocketing CEO pay 
really comes in. And that we just have this incredibly 
unbalanced playing field right now.
    Legislation like the Pro Act would do things that would 
just make it possible for workers who want to join a union, 
want to join together with their colleagues, to be able to do 
that.
    Senator Murphy. I think it is a really good point. Without 
the ability for unions to argue for a bigger share of that 
money that ends up in their pockets, and without other 
effective checks on the explosion of CEO pay, that imbalance 
just gets worse and worse. Mr. Pearce, I know we have talked in 
and around this subject of abuses that happen during organizing 
drives.
    Again, maybe I am treading on a little bit of ground that 
has already been covered. But we had an instance in Connecticut 
where groups of workers were trying to organize at McDonald's 
restaurants that were part of our rest stops along the highway. 
And there is reporting to suggest that as a means of trying to 
intimidate those workers, McDonald's actually called ICE and 
sent in immigration enforcement officials to threaten family 
members of workers.
    Just absolutely extraordinary, absolutely extraordinary 
tactics. There are much more sort of mundane and more 
pedestrian intimidation tactics that take place all the time. 
And it seems that our current enforcement structure is just not 
nearly strong enough to incentivize these kind of abuses. Why 
does the current system not work to create a level playing 
field? Why does it allow for so many employers to get away with 
captive audience meetings and threats and sort of low level 
intimidation?
    It just--at least anecdotally in Connecticut, as I talk to 
folks that are trying to organize workers and I talked to 
workers, the breadth of intimidation and harassment seems to 
have exploded. And it just doesn't seem like our current 
regulatory structure can keep up with the ways in which 
employers and union busters innovate to try to prevent folks 
from being able to cast a legitimate, free, and fair ballot as 
to whether they want to join a union.
    Mr. Pearce. It is a simple cost of doing business because 
the penalties are so light. We are talking about an agency that 
is incapable of enforcing its orders and we are talking about 
an agency that cannot impose any kind of sanctions that have a 
meaningful bite to it. Quite frankly, and I have said this 
before, I would submit that an employer can fire an individual 
who is trying to start a union and put the money that would 
probably be owed to that employee when reinstated in a simple 
interest bearing bank account.
    By the time the employer was obliged to have to pay the 
employee back, the employer would have made money and would 
have been able to stop unionization and probably write the 
expense off as a business expense. This is why the Pro Act 
changes the game. One, it gives solid damages to the employees 
if the employer has engaged in these unfair labor practices.
    Two, it requires, it mandates that the General Counsel go 
in and seek injunctions when employees get terminated so 
employees are not caught in the weeds for inordinate periods of 
time before justice comes about.
    Senator Murphy. Well said. Thank you both. Thank you very 
much.
    The Chair. Thank you.
    Senator Marshall.
    Senator Marshall. Thank you, Madam Chair. The first time I 
heard of the Pro Act or reviewed it, I asked myself what is 
broken? What are they trying to fix? And I concluded, if it 
ain't broke, don't fix it, right. And worse is that it harms 
small businesses. And I am going to submit a letter for the 
record.
    I am going to quote, this is from the NFIB, ``the radical 
legislation would dramatically upend longstanding employment 
law in favor of labor unions at the expense of small businesses 
and employees.'' I could not have said it better. And Madam 
Chair, I would like to ask unanimous consent to submit this 
letter from the NFIB for the record.
    The Chair. Without objection.
    [The information referred was not submitted for the 
record.]
    Senator Marshall. Thank you. My first question to Dr. 
Shierholz. Across the country, thousands of Americans have 
realized their American dream of owning a small business 
through the franchise business model. The Pro Act would 
dramatically expand the joint employer standard, putting the 
Government squarely in the middle of the employer, employee 
relationship and potentially making business owners liable for 
actions taken by other companies. My question, would you agree 
that the expansion of the joint employer definition threatens 
the ability of small businesses to utilize independent 
contractors?
    Ms. Shierholz. No, I wouldn't. What that joint employer 
standards does is it if--what it does is it actually helps 
small businesses, it helps franchisees. They are already 
required to be at the bargaining table under the NLRA with a 
union. What the joint employer standard would do is, strengthen 
joint employer standard, and the Pro Act would do, would make 
it so the big company, the franchisor would also be able--would 
also be required to be there if they actually do have control 
over the conditions of those workers.
    Senator Marshall. You really think that 10 percent of 
franchised companies would agree with you, or would it be less 
than that?
    Ms. Shierholz. I have no idea how much franchise companies 
would agree with me, but what I know is I did a very in-depth, 
rigorous look at what the joint employer rule, the Trump joint 
employer rule that limited that weakened the joint employer 
standards, the impact of that on workers, and found that it 
would cost workers more than $1.3 billion a year by reducing 
their ability to bring all work, all firms who have control 
over their conditions of work to the bargaining----
    Senator Marshall. We will just have to agree to disagree. I 
think it would destroy the franchise model, which is the 
backbone of so many small businesses and so many success 
stories as well. My next question for Mr. Pearce. Only 6 
percent of the private sector employees belong to a union, and 
recent unions drive across the country have failed.
    Additionally, 27 states have passed right to work laws, 
including my home State of Kansas, protecting a combined 81 
million workers nationwide from being forced to pay union dues 
in order to retain a job. I also have a list, Madam Chair, to 
ask unanimous consent to submit the document highlighting 
Democrat leader support for right to work laws to the record.
    The Chair. Without objection.
    [The information referred was not submitted for the 
record.]
    Senator Marshall. My question, Mr. Pearce, is this, why 
should the Federal Government restructure Federal law in their 
favor when unions are failing to make a compelling case to 
workers?
    Mr. Pearce. Unions are failing to make a compelling case to 
workers because unionization is being blocked by unfair labor 
practices and it is difficult for workers to be able to vote 
for a union. Statistics and studies have shown that the 
majority of workers surveyed, if had the opportunity to join a 
union, that they would.
    What has happened is high percentages, close to 50 percent 
of unfair labor practices occur during the organizing campaign. 
Further, unions don't have access to the facility. It is like 
two candidates running for an election, but one has to campaign 
outside of the country in order to get elected.
    There is an added basic inequity in the process and 
therefore that has to be changed and the process has to go to a 
neutral site so that unions have a fair opportunity.
    Senator Marshall. I got a yes or no question. The Pro Act 
would--and I will go back to you, Mr. Pearce. The Pro Act would 
force workers to pay $1,000 or more in mandatory annual dues. 
Speaking of inequities, do you agree this would 
disproportionately impacts low income workers? Yes or no?
    Mr. Pearce. No.
    Senator Marshall. Thank you. I yield back.
    The Chair. Thank you.
    Senator Smith.
    Senator Smith. Thank you, Chair Murray and Senator Braun, 
and welcome for our witnesses. It is great to be here with you 
today. So I start from the place that everyone in this country 
should have the right to come together and collectively 
organize for better wages, better benefits, better working 
conditions, safer working conditions. And that when working 
people--when this happens, working people have the opportunity 
to reap the actual value of their labor.
    The right to organize people empowers working families like 
Ms. Heldman's. And in short, it gives Americans, all Americans 
the freedom and the opportunity to build the lives that they 
want. To me, this is what is at stake in this moment as we 
think about strengthening and modernizing labor laws that, as 
you all know, many of you have said so eloquently are so out of 
date.
    Dr. Schierholz, I would like to ask you a question, really 
to respond to this argument that I hear from time to time, 
which is that strengthening labor rights comes at the expense 
of U.S. competitiveness, that basically if workers have more 
power and more representation, this argument goes that this 
hurts businesses. They become less competitive, they create 
fewer jobs, and that slows economic growth. So, Dr. Schierholz, 
could you address this argument?
    Ms. Shierholz. [Technical problems]--turned off my 
talking--it is a really important question. What the evidence 
shows on unions is that they have real productivity enhancing 
features, like, for example, when job quality is better because 
unions are there to do things like get better wages, benefits, 
working conditions, turnover goes down. Turnover is incredibly 
expensive and productivity draining for companies. So that is 
one thing, like one really important thing that unions do.
    Another thing is they can make a company just run much more 
efficiently, because what it does, it allows for an entity that 
can aggregate worker interests and worker information and 
communicate that to management, which can really be an 
important way to help an organization run more productively, 
actually more efficiently, be more competitive. So this is, I 
think this is typically just--it doesn't bear out when you look 
at what really goes on.
    Senator Smith. Well, and also, as you are--there seems to 
be such strong evidence that the rights of individuals to 
organize and increase their incomes, that makes our economy 
more fair and more fair economy is, I would argue, a more 
competitive economy. That actually--a more fair economy 
actually creates more growth rather than stifling growth. Is 
that--would you agree with that?
    Ms. Shierholz. Yes, exactly. One of the ways that I would 
also characterize that is, as we have seen, rising inequality 
is a much higher share of overall income is going to people who 
already have a lot of money. That actually hurts our economy 
because people who already have a lot of money, if they get a 
little bit more, they are not likely to spend it on goods and 
services because they already have what they need.
    What unions do by getting money in the pockets of working 
people, by getting money in the pockets of middle class people, 
it really does stimulate economic activity because those are 
folks that if they get an extra thousand dollars a year, they 
get an extra few thousand dollars a year, it is going to go 
right into the economy.
    Senator Smith. Right. The Economic Policy Institute has a 
really compelling chart, which it shows productivity growth 
compared to worker compensation over time. And what is 
interesting about this chart is during most of the postwar 
period, productivity growth and worker's compensation kind of 
they sort of moved together. But then that changes.
    After a while, starting in around 1979, those lines 
diverge. The two lines begin to separate, which essentially 
means that the way I understand it, I am not an economist 
either, that workers are not benefiting from that productivity 
growth. So could you explain that to us? And can you explain 
what impact kind of like how that matches up with what is 
happening with unionization in this country?
    Ms. Shierholz. Yes, you explained it really well, that what 
we have seen since the 80's is the economy growing relatively 
strongly, productivity increasing, but the gains of that 
productivity growth not going to working people largely. It is 
largely being captured by people at the--who already have the 
most.
    One reason for that, one key reason for that is the decline 
of unionization that really does do this sort of upward 
redistribution of money from workers to corporate executives, 
shareholders. So fundamental reform like the Pro Act really 
would help halt and reverse those trends and move us toward an 
economy that works for everyone, not just for a little slice at 
the top.
    Senator Smith. Right. I mean, I think that what we have 
seen--thank you for that. What we have seen is after years of 
concerted, coordinated effort to whittle away at workers' 
rights, that it is time for Congress to address that imbalance. 
And by addressing that imbalance, we will be able to address 
the greater imbalances in our economy. That means that it 
doesn't work for everyone. And as Paul Wellstone from my State 
of Minnesota used to say, we can get back to a place, hopefully 
to a better place, where we all do better when we all do 
better. Thank you.
    The Chair. Thank you.
    Senator Baldwin.
    Senator Baldwin. Thank you, Madam Chair, for hosting this 
incredibly important hearing. And thank you to the Ranking 
Member also. Mr. Pearce, as a former National Labor Relations 
Board Chairman, you have witnessed how worker misclassification 
has hurt the interests of workers and their efforts to 
collectively bargain. There has been a lot of misinformation 
out there about what the Protecting the Right to Organize Act 
will do to address worker misclassification.
    I would like to just urge us, let's be clear and address 
this once and for all. What problem is the Pro Act to 
protecting the right to organize acts ABC test trying to fix, 
and how will it work, and will it require freelance workers to 
become W2 employees?
    Mr. Pearce. Thank you so much for the question, Senator. I 
am glad to have the opportunity to clear that up. First of all, 
the ABC tests more or less basically said it has the ability to 
discern whether or not an individual worker is truly an 
employee under the National Labor Relations Act for the 
purposes of the ABC's coverage. The ABC test assumes that 
someone is an employee if unless the worker is free from the 
employer's control or direction in performing work, the work 
that takes place--the work takes place outside of the usual 
business. So if somebody has a bakery and they have a worker, 
have somebody--they hire somebody to install ovens, clearly 
that is not baking.
    That is not going to be considered the same as being an 
employee. And customarily do the work that is being performed 
is independently done. So if the person is installing ovens, do 
they have a business of installing ovens? Well clearly they are 
not employees of that employer.
    The ABC test discerns that. And it is not new. It is being 
done by half of the states in this country for the purpose of 
wage and hours and other benefits and unemployment insurance. 
So the--what it does is codify that standard so that it would 
apply in discerning who is eligible for coverage under the 
National Labor Relations Act.
    Senator Baldwin. Thank you. Ms. Heldman, thank you so much 
for your testimony and your presence here and your efforts to 
organize your workplace. As you know, the Protecting the Right 
to Organize Act allows the NLRB to assess monetary penalties 
for labor law violations and imposes personal liability on 
executives responsible for such violations. How would your 
employer perhaps have acted differently during your union drive 
if they knew that they could be liable for fines of up to 
$50,000 per labor violation?
    Ms. Heldman. Well, if they knew that, we would have won our 
first election and we have not we lost that election, and they 
would have thought twice about firing union supporters and how 
they treated people and how they pulled us into office and 
interrogated us and told us to vote no and be out there on the 
floor right on our faces and telling us to vote no and 
following us wherever. And send us posts to vote no because we 
don't need a union. That would make them think twice. I really 
think that would make them think about what they are doing.
    Senator Baldwin. Thank you.
    The Chair. Thank you.
    Senator Rosen.
    Senator Rosen. Thank you, Chair Murray, Senator Braun, and 
really thank you for holding this hearing today so we can have 
a discussion about the important--how important the right to 
organize is to ensure our good paying safe jobs for workers all 
across our states. And I come from Nevada. Nevada, built by 
union workers. It runs today because of the work that the union 
members do.
    The Nevada AFL-CIO has worked to raise wages, secure 
benefits, and ensure safe working conditions for workers all 
over our state. The ACIU and Teamsters locals in Nevada, well, 
has COVID right now. So they are fighting for our nurses, our 
caregivers, they are fighting for our convention workers, bus 
drivers, other men and women all across our state. I want to 
say hardest hit in the Nation with unemployment this last year. 
And I also want to mention that our Culinary Union 226 turned 
85 years old last year and celebrated decades of providing 
hundreds of thousands of Nevada hospitality workers a pathway 
to the middle class.
    During the darkest days of the pandemic, unions delivered 
food to the furloughed workers, helped them sign up for their 
unemployment benefits, ensured they had a right to return to 
their jobs as Nevada carefully reopens and welcomes back 
visitors. And I myself am a former member of a Culinary Union 
226. I am proud of that and Unite Here and our other Nevada 
unions that are fighting to protect workers, secure benefits 
for their families.
    My grandmother was a lifelong member of the Baker and 
Confectioners Union. And so I know a little bit about unions, 
and I want to thank all of you for fighting for that. But, Mr. 
Pearce, we tend to hear a lot, my colleagues are talking about, 
these competing narratives, that is the Pro Act really 
necessary? People will do the right thing. Businesses will do 
the right thing. And is it necessary for achieving workplace 
democracy?
    Can you explain that concept of workplace democracy? Why it 
is important and how strengthening our right to organize cannot 
only help us achieve a more democratic workplace, but I would 
say a more harmonious workplace?
    Mr. Pearce. Thank you so much, Senator, for this 
opportunity. So often I am hearing that what unions are doing 
is undemocratic. It is violating employees' democratic rights. 
What folks fail to realize is that without legislation, there 
is no democracy in the workplace. It is the National Labor 
Relations Act that provided democracy in the workplace. And the 
whole idea was balance the playing fields, bring workers an 
opportunity to have a seat at the table.
    The Pro Act provides and facilitates collective bargaining 
in an enhanced way in environments that are comparable to the 
21st century so that employees have a better chance to be able 
to bring democracy into the workplace. I talked about the value 
of the collective bargaining agreement. It is the contract, the 
constitution of the of the workplace mutually negotiated.
    It is important because it provides abilities for people to 
have safe working conditions to employees, to be able to be 
hired and retain their jobs with just cause standards and not 
be subject to cronyism or possible racism. All of those things 
that are vital to have workplace integrity. And that is 
important.
    Senator Rosen. Well, you speak about some of this, and we 
know all too well that the pandemic this last year has really 
laid bare the disparities that have always existed. So, Dr. 
Schierholz, Black and Latino unemployment at their peaks were 
higher than unemployment for white workers, including in my 
home State of Nevada, which has one of the largest Latino 
populations in the country. Can you talk about the benefit of 
unionization for Black and Latino workers in particular please?
    Ms. Shierholz. Yes, it is really an important thing to 
highlight. I think that there is this idea because unionization 
started and it didn't have a lot of people of color originally 
was mostly men, that there is this idea that is still how it 
is, and it could not be farther from the truth. The unions 
really do reflect the diversity of our Country as it is today. 
And we--there is enormous benefits to people of color of union.
    Black workers get a--and Hispanic workers get a bigger 
boost to being in unions than white workers do. And workers get 
a boost of being in unions. But it is more important the boost 
is bigger for people of color.
    Black workers are more likely to be in unions than white 
workers. And you put all that together, unions are just an 
incredibly important force for racial economic justice in this 
country. It is just--if we take seriously this national 
discussion we are having about racial economic justice, a 
really important thing that we have to do there is boost 
unionization.
    Senator Rosen. Thank you. I appreciate all of your time 
here today.
    The Chair. Thank you.
    Senator Hickenlooper.
    Senator Hickenlooper. Thank you, Madam Chair. And I want to 
just briefly go over some territory that I think Senator Casey 
touched on. And Dr. Schierholz, you have commented on that 
parallel between the shrinking of the middle class of America 
with the reduction, the shrinking of the percentage of workers 
who are represented by organized labor. Has that been pretty 
consistent over the whole--when you look back over the last 
five decades. Has that been a pretty consistent process?
    Ms. Shierholz. I think I understand your question. But, 
yes, as we have seen--as we have seen union unionization 
decline, that has been accompanied by this increase in 
inequality. And if you look over the whole period, you really 
can look and see that it is that decline in unionization was 
causally related. A big chunk was--was the reason for a big 
chunk of that rising inequality. I am not sure if I answered 
that question.
    Senator Hickenlooper. I was asking more about just looking 
at the size of the middle class, how you want to define it in 
the United States, that has been shrinking by almost every 
measure over the last 50 years. That causality.
    Ms. Shierholz. Yes, that is--it is interesting. There is a 
sort of a structural trend over time in stagnant wages for 
working people over most of that period. There has been some 
breaks like when we have strong expansions, the expansion of 
the late 90's, we did see some gains for working people. But 
the broader trend really has been just over that whole period, 
just a steady erosion of the sort of the ability of our economy 
to deliver for all workers.
    Senator Hickenlooper. Got it. Appreciate. And also, when I 
was Governor of Colorado, I signed an executive order that set 
up an, we called it the enforcement task force to--we were 
looking at alleged worker misclassification, basically tax 
fraud, payments under the table in the construction industry. 
We did this because not everyone was playing by the same rules. 
It really penalizes those that do play by the rules, the law 
abiding businesses. They were being undercut.
    I think when some workers within an industry are allowed to 
join a union and others not, again, it creates an unleveled 
playing field. I have heard concerns from some of my friends in 
the business community about the ABC test within the Pro Act is 
being applied more broadly, possibly outside the NLRA.
    Can you confirm and just reiterate that the ABC test within 
the Pro Act will only be used regarding workers' rights to join 
a union? And then can you explain how this test could help--how 
it would help level the playing field?
    Ms. Shierholz. Yes, that is a good question. And you are 
absolutely right. The Pro Act would only amend the NLRA, no 
other worker protection statute. So it would only test for an 
employee in the bill would only apply to rights workers have 
under the NLRA, which is essentially unions and collective 
bargaining. So that is 100 percent true. And then the--what the 
test would do is just help ensure that all workers are properly 
classified.
    I think you brought up a really important point. Most 
employers actually classify their workers correctly. But what 
this would do is make it so those bad apple companies that are 
unable to miss--are less able to misclassify their workers and 
gain that competitive advantage. So in that way, it really does 
help level the playing field amongst all companies.
    Senator Hickenlooper. Great. And then, Mr. Pearce, most 
business owners do everything they can to comply with the law, 
oftentimes with limited resources. I was a small business 
myself, a small businessperson myself for many years.
    We have heard some concerns that the Pro Act will force 
small businesses to comply with excessively burdensome Federal 
regulations. How would you respond to those concerns? And how 
can we better educate and equip business owners to facilitate 
their compliance with the law?
    Mr. Pearce. Well, I guess I just disagree that it would 
require employers to comply with more burdensome Federal 
regulations. The Pro Act does nothing toward making employers 
have to comply with anything more than they already are obliged 
to.
    If anything, the Pro Act would enable employers to have a 
little bit more clarity with respect to their rights and 
obligations under the law. They would have the opportunity to 
be further educated with respect to a union and employee rights 
under the National Labor Relations Act. So it is not going to 
be an invisible situation.
    Many employers, given my many years involved with the 
National Labor Relations Board, oftentimes fall into situations 
where they commit unfair labor practices out of ignorance. I 
mean, some employers do it with malicious intent, but some just 
do it because they don't know the program to provide an 
educational system for that everybody to be aware of.
    There would be a requirement that notices be posted so 
people would know what their rights are now. Now, employers 
would have to, would be obliged to report when they are hiring 
persuaders to union bust, and that would be certainly a new 
obligation on the part of the employer. But that's all.
    Senator Hickenlooper. Right. Great. I appreciate you for 
that clarification. Thank you all. Thank you all for being 
here. I yield back to the Chair.
    The Chair. Thank you.
    Senator Braun.
    Senator Braun. Robust conversation here today. And I want 
to make a couple of comments. I think bad apple companies like 
Mrs. Heldman talked about, is a reason we need to have the 
discussion. Senator Murphy was talking about a public company 
CEO pay and never would be for stuff like that were you have 
got a proportion of 290 or even 200 or even 100 to 1. That 
gives companies a bad name. But I don't think you can 
generalize upon that because it gets back to my thesis on all 
of this.
    If this Act in any way impinges upon small business, I 
think it hurts the future of unions and businesses to get 
large. I want you to answer as briefly as you can, Mr. Pearce, 
Dr. Schierholz, I view this as a flattened triangle with small 
businesses at the bottom, unions and larger businesses at the 
top. This will be a bill that is a one-size fits all.
    Do you think there is a place to where you differentiate so 
you don't kill the golden goose that produces large companies 
over time, creates jobs, generally is the progenitor of them? 
Would you be comfortable with something that distinguished 
between unions and large business and how this might impact 
small business?
    Mr. Pearce.
    Mr. Pearce. What I would say is this, the vast majority of 
bargaining units in the United States are average at about 20 
to 25 employees. So the unionization was pretty much created in 
an atmosphere that under current standards would be a small 
business atmosphere. Small businesses are the backbone of this 
country. And I agree, I believe that the Pro Act does nothing 
to jeopardize small businesses' abilities to function and 
proceed. And in fact, the Pro Act provides opportunity for 
clarity.
    As I indicated to Senator Hickenlooper, there will be a 
greater understanding of rights and obligations and those 
businesses that love their employees and provide more for them. 
Those employees may believe that they don't need to be 
unionized.
    Senator Braun. I make the point that the difference between 
unions and a small business and business owners just taking 
care of their employees is almost no difference. I think where 
it comes into play and even though the average might be there, 
I think the bigger issues are with larger entities.
    Dr. Shierholz.
    Ms. Shierholz. Yes, I would say that just like you said, 
small business owners are the ones who know their employees. 
They are like family. They know their kids. They know they know 
what is going on in their lives. They are--want to be able to 
pay their workers more, provide them benefits, all the things 
that make a good quality job.
    If larger union busting firms are able to crack down on 
unions and so doing reduce wages, reduce benefits, that 
actually hurts the small businesses' competitive advantage. So 
leveling that playing field actually makes these small 
businesses who want to do right by their workers better off. 
The Pro Act will actually----
    Senator Braun. I am careful throw the baby out with the 
bathwater there. So just as a food for thought. And real 
briefly, devils are always in the details. I think this is 
going to affect the gig economy. It is a growing freelance part 
of our economy that is growing. Independent contractor status, 
which many small employers have to use because they don't have 
a position that could hire an individual.
    We have got to be careful that we don't attenuate them. And 
in this case, in terms of binding arbitration that you can 
trigger within 100 days and basically have a panel come in and 
put a working agreement or a contract out there is not good. 
And then finally, very briefly, Ms. Sarolia, do you want to add 
anything else to wrap up the conversation from an independent 
business owner?
    Ms. Sarolia. I do, Senator Braun. There were so many 
questions that were asked of my colleagues that are sitting 
next to me. I wish I would have really----
    [technical problems] respond to but just a couple of points 
that I want to reiterate. If there are any ideas that we all 
like me too, can work together to support workers by not 
destroying the franchise model, I am going to sign myself up to 
make it my work. So understand that everyone sitting in this 
room.
    The second thing I know, we talked about what keeps 
turnover--what keeps turnover from our businesses. Small 
business owners, creating the right culture and paying a 
standard of living, which is what my company has done that 
really attributes to keeping the turnover. And I am not great 
with statistics, but I can tell you with my gut instinct of 
doing this job, all the jobs that are employed under me and 
their work, we are one of the only industry, I think, the 
hospitality, travel, and tourism where we all started out 
cleaning rooms or folding towels, delivering laundry at the age 
of nine, which labor wasn't part of it back then, but we did 
that at a younger age, so we have a lot of respect for those 
that we actually employ. But we want to do nothing but to see 
them also be a part owner of the business that we are.
    Who better than our industry to be able to do that? So that 
is that. The other thing is how does it threaten this business? 
I want to end with this one, Senator. The Pro Act is such a 
mammoth proposal, it would upend in my business in two ways. 
And it is the first two provisions in the bill specifically 
that I am really passionate about.
    First, the Pro Act's joint employer standard is 
unpredictable. No one here can assure a franchise brand that 
its business may not run afoul of nebulous, indirect, and 
reserve control standard. Ultimately, the Pro Act's joint 
employer standard would take away the incentives to franchise. 
These are changes that would take away the investment, the 
equity, and the independence of franchise small business owners 
like me.
    Who really wants to be under the ABC test. I don't want to 
be the employer of the franchisor when it is my business that I 
own. Just doesn't make sense. Second, the Pro Act's independent 
contractor test features an a-prong that most franchises would 
likely fail. That is because the a-prong sets up a conflict of 
laws with the Laymen Act, which requires franchises to have the 
same control that the Pro Act prohibits.
    There is a lot of inconsistencies in that language. And I 
want to end with that in terms of what it would do and impact 
me as a small business. Thank you, Senator Braun.
    Senator Braun. Thank you.
    The Chair. Thank you. I have one additional question before 
our hearing end, and that is to you, Mrs. Heldman. And I really 
appreciate your testimony here. But you, like millions of other 
essential workers, continued to go to your work site during the 
pandemic to make sure that Americans had access to what they 
needed, needed goods and services. And like many essential 
workers, you feared for your safety and the economic impact of 
the illness on yourself and your colleagues and your families. 
I wanted to just have you tell us how the pandemic affected 
your views on the need for a union.
    Ms. Heldman. Well, they would hire new people and they 
would bring them, treat them out, in and out right next to you. 
And this was at the beginning of the pandemic. And they had no 
mask for us. They didn't give us masks until Mondalese gave a 
mask, gave us masks. And I just, I told them, I feel they 
trying to get me to get COVID-19 because they see trains of 
just people in and out. And I asked them, I go, why are you 
guys doing this? This is the beginning of a pandemic.
    The girl for the IS office that takes these new people 
around, she just went like f and this f and my f-ing boss, this 
and that. And I was like, wow, I went to the office, and I 
said, you know what, she doesn't need to talk to me like that. 
I used to ask her why are you guys doing this? This is the 
beginning of a pandemic. And the girl gave me a lame excuse, I 
don't remember what it was, but it was just an excuse.
    Then she said, well, did you have any witnesses out there? 
Because she made it sound like I was trying to cause trouble or 
whatever. And I go, yes, I have witnesses that they watched do 
this and tell me the stuff. Yes, I do. And she calm down 
because I think they were going to try and get me fired or 
something. And then we had like 73 by the fall, we had 73 
cases.
    Once we had done our voting, they quit telling us what our 
cases were up to. We weren't allowed to have no more 
information.
    The Chair. You didn't know who else was being----
    Ms. Heldman. No. But in January, a lady passed away. She 
was in the hospital from November to January, and then she 
passed away from COVID. And then July 1st, we just lost the guy 
who was 50 years old. And that day when the guy died, they said 
you guys don't need to wear your mask anymore. And people said, 
some of them decided to not wear the mask. But then you got a 
lot of them that are wearing their mask. And then also, I mean 
all these captive meetings, they were just grandmas in there. 
It was like, are we really serious? This is the middle of a 
pandemic. Are you guys really serious.
    I mean, they would put like semis on the street, like they 
crammed into this tent, 150 of us, and then they put cement 
barrels right along them trailers. And all then all of 
supervisors were out there. And some of the supervisors were 
sitting out there with us yelling, vote union no.
    Then where we would stand and hand bills and talk to 
people, they went out there and they put cement barrels all 
along the public sidewalk so we wouldn't be able to stand out 
there and talk to people or stand out there, period. This is a 
public sidewalk and then they put chains on them, so we weren't 
able to be hang out there.
    I mean, we had a girl come in and she told them she goes I 
am not feeling good today. And they took her temperature, and 
they didn't pay attention to her. Well, she went out there and 
she worked all day and then she had the pandemic. She--finally 
she got a fever, I think, later on in the day. And then they 
sent her home, and she had the quarantine and then she came 
back. But just stuff like that. And that is how they handled 
the pandemic.
    The Chair. Thank you so much for sharing your personal 
experience.
    Ms. Heldman. Thank you.
    The Chair. Really appreciate it. And I want to thank all of 
our witnesses today and all of our colleagues for their 
participation. Mr. Pearce, Dr. Schierholz, Mrs. Heldman, Ms. 
Sarolia, thank you for sharing your time and your expertise 
with the Committee today. I seek unanimous consent to put on 
the record six letters from organizations in support of the Pro 
Act. So ordered.
    [The information referred was not submitted for the 
record.]
    The Chair. For any Senators who wish to ask additional 
questions, questions for the record will be due in 10 business 
days, August 5th, 5 p.m. The hearing record will remain open 
until then for Members who wish to submit additional material 
for the record.
    This Committee will next meet Tuesday, July 27th in Dirksen 
430 for a hearing on how we learn the lessons of this pandemic 
and strengthen our Nation's public health and preparedness 
systems. The Committee stands adjourned.

                          ADDITIONAL MATERIAL

                         Entrepreneur Magazine

  series on negative impacts of the pro act and how it would destroy 
                      entrepreneurship in america
              Why Entrepreneur Stands Against the PRO Act
    ``But today, for the first time, Entrepreneur is entering the world 
of advocacy on a single issue: It is to oppose a bill called the 
Protecting the Right to Organize Act, which is currently being 
considered in Congress, and which could do lasting harm to the small-
business and franchise community.'' (Entrepreneur, 6/21/21).
                Women Franchise Owners Fear The PRO Act
    `` . . . [T]he Protecting the Right to Organize Act, or PRO Act, 
which is currently being considered by Congress . . . contains language 
called the joint-employer standard, which some legal experts say could 
force corporate franchise brands to become the employer of their 
individual franchisees' staff. That would eliminate franchisees' 
autonomy. If the franchise industry is disrupted, then many women's 
careers are disrupted too. Women now open one out of every three new 
franchises, in a business model where about 30 percent of the owners 
are women.'' (Entrepreneur, 7/12/21).
      Parents and Caregivers Say PRO Act Would Harm Their Families
    ``I'm hoping to go another 20 years with good health,'' Hosty says. 
``I'll be 59 in July, and I really love what I do. I hope to be driving 
until I'm 80 years old.' But that likely would not be possible if 
Congress passes the Protecting the Right to Organize Act, or PRO Act. 
Its ABC Test would target companies that hire independent contractors 
in all kinds of professions, and reclassify those contractors as 
employees under labor law. Those affected would include owner-operator 
truckers like Hosty, who says the idea makes no sense at all.'' 
(Entrepreneur, 7/1/21).
           Small Business Owners Fear the PRO Act's ABC Test
    ``Today, Reyes is watching in disbelief as Federal lawmakers say 
they intend to follow California's lead. The same ABC Test is in the 
Protecting the Right to Organize Act, or PRO Act--which proponents are 
promoting as `civil rights legislation' despite the economic harm this 
ABC Test caused for marginalized people like Reyes, along with other 
Californians in hundreds of professions. `You cannot create blanket 
legislation to cover all of these different professions and say you're 
protecting them,' Reyes says. `You're actually making life harder.' '' 
(Entrepreneur, 6/24/21).
             Older Women Say PRO Act Unfairly Targets Them

    ``That's why she is among those enraged that Federal lawmakers are 
even considering the Protecting the Right to Organize Act, or PRO Act. 
Under the proposed law, many independent contractors would have to be 
reclassified as employees of their clients--stripping them of the 
career flexibility they prefer . . . `I was looking for W2 work--I 
wanted the steady paycheck,' she says. `I wanted all the things like 
benefits that go with a W2 job. But the more I did independent work, 
the more I realized that I was so much happier. I actually like being 
my own boss.' '' (Entrepreneur, 6/24/21).
What is the ABC Test, and how Could it Harm Freelancers and Independent 
                              Contractors?
    ``Freelancers and independent contractors in America may soon face 
a test--and if they don't pass it, their ability to earn a living could 
radically change. The test is called the ABC Test, and it's included in 
Federal legislation called the Protecting the Right to Organize Act 
(commonly known as the PRO Act) that's currently being considered by 
Congress. If freelancers or independent contractors pass the test, they 
can continue working independently. If they fail it, they'd be 
classified as employees of their clients for the purposes of labor 
law--which means they may no longer be able to operate independently.'' 
(Entrepreneur, 6/21/21).
 This Legal Change Could ``Severely Disrupt'' Franchising. Learn About 
                 The PRO Act's Joint-Employer Standard
    ``The PRO Act includes a change to language known as `joint 
employer,' which means that, in certain circumstances, the franchisee 
and the franchisor might both be considered the cashier's employer. The 
franchisor could be legally on the hook for an individual franchisee's 
mistakes, or for mistakes made by the franchisee's employees, and may 
even force a change to the franchisee's own relationship with the 
franchisor. The implications are substantial. There are nearly 800,000 
franchises in the United States, many of them beloved brands such as 
McDonald's, 7-Eleven, Ace Hardware, Marriott International and Re/Max. 
All of them, according to industry and legal experts, could be 
harmed.'' (Entrepreneur, 6/21/21).
                                 ______
                                 
                               State Policy Network
       1655 North Fort Myer Drive, Suite 360 Arlington, VA.
                                                     July 29, 2021.
Hon. Patty Murray, Chair,
Hon. Richard Burr, Ranking Member,
Senate Committee on Health, Education, Labor, and Pensions,
428 Dirksen Senate Office Building,
Washington, DC.

    Dear Chair Murray and Ranking Member Burr:

    As state economies, small business owners, and workers recover and 
persevere through a global pandemic, we strongly urge the Senate 
Health, Education, Labor, and Pensions (HELP) Committee to oppose the 
Protecting the Right to Organize (PRO) Act. Instead of helping workers 
and small businesses get back on their feet, the PRO Act burdens job 
creators with layers of red tape and infringes on individuals' right to 
earn a living.

    While supporters of the PRO Act suggest it advances workers' 
rights, the provisions of the legislation speak otherwise. A key 
provision gives organized labor greater power to compel workers to join 
a union in order to keep their jobs. Further eroding workers' rights, 
the PRO Act threatens the privacy of workers by giving unions their 
private information--email, phone number, home address--without any 
ability to opt-out.

    Unemployment levels remain well above pre-pandemic levels. Now is 
not the time to move forward with the PRO Act or any other legislation 
that overturns worker freedom throughout the country, stifles 
independent workers' ability to support their families, harms small 
businesses, and increases burdens on job creators.
 The PRO Act Undermines Federalism, Worker Freedom, and Economic Growth
    One provision of the PRO Act would effectively overturn state 
right-to-work laws and nullify the ability of states to pass these laws 
in the future. Undercutting state right-to-work laws strikes against 
the core democratic principle of federalism and weakens the individual 
rights of workers.

    Repealing right-to-work laws is not merely a poor policy decision--
one that would strip workers of their freedom to choose whether to join 
a union--but it's also an overriding of the will of the people in the 
27 states that have enacted right-to-work laws. Workers in several 
states have enjoyed these protections since the 1940's. \1\ Voters in 
these states have voiced their preference to give workers the right to 
opt out of joining a union, a decision the Federal Government should 
respect.
---------------------------------------------------------------------------
    \1\  ``Right to Work States Timeline,'' National Right to Work 
Committee, accessed July 24, 2021, https://nrtwc.org/facts/state-right-
to-work-timeline-092016/.

    In part, right-to-work laws are popular and enacted in most states 
because they positively impact economic growth and employment. States 
with right-to-work laws outperform their counterparts in several 
---------------------------------------------------------------------------
categories.

    For example, between 2001 and 2016:

          Private sector employment grew by 27 percent in right 
        to work states, compared to 15 percent in non-right-to-work 
        states.

          Personal income rose by 39 percent in right to work 
        states, compared to 26 percent in non-right-to-work states. \2\
---------------------------------------------------------------------------
    \2\  Jeffrey A. Eisenach, Ph.D., ``Right-to-Work Laws: The Economic 
Evidence,'' NERA Economic Consulting, May 2018, https://www.nera.com/
content/dam/nera/publications/2018/PUB-Right-to-Work-Laws-0518-web.pdf.

    Surveys and research find states with right-to-work laws are viewed 
as business-friendly \3\ and play a role in the location of industry--
particularly manufacturing. \4\ Results from one study found states 
that recently enacted right-to-work laws experienced more growth in 
total manufacturing employment than non-right-to-work states. \5\
---------------------------------------------------------------------------
    \3\  Ron Starner, ``Right-to-work laws turn the Southeast U.S. into 
a factory for the world,'' Site Selection Magazine, 2004, https://
siteselection.com/issues/2004/jul/p500/.
    \4\  Thomas Holmes, ``The Effect of State Policies on the Location 
of Manufacturing: Evidence from State Borders,'' Journal of Political 
Economy, August 1998, https://www.journals.uchicago.edu/doi/abs/
10.1086/250026?journalCode=jpe.
    \5\  Eunbi Kim, ``The impact of right-to-work legislation on 
foreign manufacturing employment in the United States,'' International 
Journal of Urban Sciences, 2021, https://www.tandfonline.com/doi/full/
10.1080/12265934.2021.1919183.

    Anecdotal evidence supports the above research, as explained by 
Kentucky state representative Damon Thayer: ``We passed right-to-work. 
One week later, Amazon announces in Northern Kentucky that they're 
coming with a $1 billion dollar investment and a few months later here 
Toyota comes with a $1.3 billion dollar investment, and I still think 
the best is yet to come.'' \6\
---------------------------------------------------------------------------
    \6\  Josh James ``Georgetown Toyota Plant Set for $1.33B Injection, 
Bevin Says More to Come,'' WUKY.org, April 10, 2017, https://
www.wuky.org/post/georgetown-toyota-plant-set-133b-injection-bevin-
says-more-come#stream/0.
---------------------------------------------------------------------------
                 The PRO Act Restricts Independent Work
    A provision of the PRO Act establishes a near statutory prohibition 
on independent work, a change that could cost millions of individuals 
the opportunity to earn a living and support their families.

    The legislation would consider all workers, even those who 
currently make their living as contractors, as full-fledged employees 
unless they can satisfy a stringent three-pronged test, known as the 
ABC Test:

          The worker must be able to set his/her own schedule, 
        timeline, and be able to dictate how the work is completed.

          The worker must provide a service or product that's 
        outside the normal business of the client. For example, a 
        writer could create content for a hotel website as a contractor 
        but would not be permitted to do freelance writing for a news 
        website.

          The worker has an independently established, 
        professional business that focuses on the service being 
        provided.

    In a time of economic recovery, government policy should not 
discourage individuals from engaging in any form of work, including 
independent entrepreneurship. Implementing the ABC Test nationwide 
would reduce independent contracting and slow economic recovery. It 
would jeopardize the livelihoods of the 38.2 million Americans who 
engage in some form of independent work to start businesses, earn 
income, improve skills, or take on passion projects. \7\
---------------------------------------------------------------------------
    \7\  MBO Partners, ``The State of Independence in America,'' 2020, 
https://www.mbopartners.com/state-of-independence/ps://
www.mbopartners.com/state-of-independence/.

    Research shows independent contractors greatly contributed to the 
economic recovery from the last recession: ``Between 2010 and 2014, 
independent contractors grew 11.1 percent (2.1 million workers) and 
represented 29.2 percent of all jobs added during that time period.'' 
\8\ Other research indicates work as an independent contractor also 
offers critical opportunities and earnings for the unemployed while 
they search for new work. \9\
---------------------------------------------------------------------------
    \8\  Ben Gitis, Douglas Holtz-Eakin, and Will Rinehart, ``The Gig 
Economy: Research and Policy Implications of Regional, Economic, and 
Demographic Trends,'' American Action Forum and Aspen Institute, 
January 10, 2017, https://www.americanactionforum.org/research/gig-
economy-research-policy%20-implications-regional-economic-demographic-
trends.
    \9\  McKinsey Global Institute, ``Independent Work: Choice, 
Necessity, and the Gig Economy,'' October 2016, https://
www.mckinsey.com/featured-insights/employment-and-growth/independent-
work-choice-necessity-and-the-gig-economy.

    Furthermore, several individuals became ``coronavirus 
entrepreneurs'' over the last 16 months. Independent work was a 
lifeline for many Americans during the pandemic. Between March 2020 and 
March 2021, 4.4 million new businesses were started in the United 
States. \10\
---------------------------------------------------------------------------
    \10\  Brooke Fox, ``The Covid entrepreneurs: Americans start 
millions of new businesses,'' Financial Times, March 8, 2021, https://
www.ft.com/content/400ae372-0cb2-48bb-8767-7986848ed9a6.

    Policy should encourage, not restrict, independent work. 
Independent contractors make up a significant amount of economic 
activity in the United States, and this type of work offers significant 
benefits like flexibility, autonomy, and opportunity to learn new 
skills. In addition, satisfaction among independent contractors is 
high. Less than one out of every 10 independent contractors would 
prefer a traditional employment relationship, according to research 
from the Bureau of Labor Statistics. \11\
---------------------------------------------------------------------------
    \11\  Bureau of Labor Statistics, ``Contingent and Alternative 
Employment Arrangements News Release,'' 2018, https://www.bls.gov/
news.release/conemp.htm.

            The PRO Act Makes Doing Business More Difficult
    The PRO Act is sweeping legislation that makes dozens of 
substantial changes to the National Labor Relations Act. Such radical 
legislative change imposes high compliance costs on small businesses, 
many of which do not have ready access to legal advice or staff 
responsible for staying up to date on emerging regulatory issues.

    Research over the past several decades confirms the cost of 
regulation disproportionately falls on small businesses. According to a 
recent study, ``Small firms with fewer than 50 employees incur 
regulatory costs ($11,724 per employee per year) that are 17 percent 
greater than the average firm. The cost per employee is $10,664 for 
medium-sized firms and $9,083 for large firms.'' \12\
---------------------------------------------------------------------------
    \12\  Mark and Nicole Crain, ``The Cost of Federal Regulation to 
the U.S. Economy, Manufacturing and Small Business,'' National 
Association of Manufacturers, September 2014, https://www.nam.org/wp-
content/uploads/2019/05/Federal-Regulation-Full-Study.pdf.

    The PRO Act exacerbates this problem by increasing regulatory costs 
on small firms, making job creation and business formation more 
difficult. For example, the legislation would restore a costly Obama 
administration rule that greatly expands joint employer liability. The 
objective of the policy is to hold one company liable for bargaining 
responsibilities and violations of another employer, a policy that, in 
practice, would punish large companies for violations of a small 
company they contract with. This negatively impacts small businesses by 
discouraging larger employers from outsourcing functions. Bringing more 
functions in-house at higher labor costs will result in fewer jobs and 
fewer opportunities for entrepreneurs. Estimates find that the joint 
employer standard could result in 1.7 million fewer jobs. \13\
---------------------------------------------------------------------------
    \13\  Ben Gitis, ``The NLRB's New Joint Employer Standard, Unions, 
and the Franchise Model,'' American Action Forum, April 26, 2017, 
https://www.americanactionforum.org/research/nlrbs-new-joint-employer-
standard-unions-franchise-business-model/.

    Increased regulatory costs are one of many pitfalls for small 
businesses. Currently, the National Labor Relations Board is a remedial 
agency with limited authority to issue monetary penalties. But under 
the PRO Act, job creators would be subject to heavy civil penalties, 
fines, and punitive damages for minor or merely technical violations of 
---------------------------------------------------------------------------
the law, ranging from $500 to $100,000 per violation.

    On top of increased monetary costs, employers face a greater 
likelihood of workplace disruptions under the PRO Act. Currently, 
striking is only allowed at businesses that have some involvement with 
a labor union, but the PRO Act would allow secondary strikes and 
boycotts of completely neutral parties. For example, if a union is 
involved in a dispute with an auto manufacturer, it could also picket 
and protest in front of a parts supplier that provides material to the 
manufacturer, even though the supplier is not involved with the dispute 
or has no way to solve it.

    Such strikes, boycotts, and picketing could cause massive 
disruption of the entire economy and many industries. For example, a 
regular car contains 30,000 parts that are made by suppliers throughout 
the world. The supply chain is massive, ranging from the aluminum, 
steel, and plastics used in the car to the tinting for windshields, 
boxes for shipping, laminates, nuts and bolts, leather, cleaning 
products, and so on. The unintended consequences of allowing secondary 
strikes and boycotts on these neutral parties in the supply chain are 
unknowable. What is known, however, is the PRO Act would allow unions 
to severely disrupt the supply chains of most industries. That is not 
good for the Nation, workers, industries, or consumers.

    Thank you, Chair Murray, Ranking Member Burr, and all the Members 
of the HELP Committee for considering our viewpoint on the PRO Act.

            Sincerely,
                                              Tracie Sharp,
                                   President and CEO State,
                                            Policy Network.
                                 ______
                                 
    NATIONAL ASSOCIATION OF WHOLESALER-DISTRIBUTORS
             1325 G Street N.W., Suite 1000, Washington, DC
                                                     July 21, 2021.
Hon. Patty Murray, Chair,
Hon. Richard Burr, Ranking Member,
Senate Committee on Health, Education, Labor, and Pensions,
428 Dirksen Senate Office Building,
Washington, DC.

    To Chair Murray and Ranking Member Burr, and Members of the Senate 
HELP Committee::

    I am writing today on behalf of the National Association of 
Wholesaler-Distributors (NAW) to express our strong opposition to S. 
420, the ``Protecting the Right to Organize (PRO) Act,'' which the U.S. 
Senate Committee on Health, Education, Labor, and Pensions (HELP) will 
be considering during their hearing entitled ``The Right to Organize: 
Empowering American Workers in a 21st Century Economy''.

    NAW is the ``national voice of wholesale distribution,'' an 
association comprised of employers of all sizes, and national, 
regional, state and local line-of-trade associations spanning the $5.94 
trillion wholesale distribution industry that employs almost 6 million 
workers in the United States. Approximately 30,000 enterprises with 
almost 395,000 places of businesses in all 50 states and the District 
of Columbia are affiliated with NAW.

    You should know that this legislation is not only organized labor's 
top legislative agenda but that of business as well. S. 420 is an 
inappropriate and obvious response to organized labor's threat to stay 
on the sidelines in the 2022 elections unless the Senate Democratic 
majority passes the PRO Act. As the country begins to turn the corner 
on the COVID-19 pandemic, Congress should focus on helping businesses 
stay open and workers employed after the past devastating year and a 
half. Instead, the Senate HELP Committee is holding a hearing on a bill 
that would directly benefit their organized labor allies by enacting 
Federal policies that would increase the number of dues-paying union 
members at the expense of workers, small and local businesses, and 
entrepreneurs.

    This radical legislation would impose policies that were rejected 
by the judicial system, opposed on a bipartisan basis in Congress, and/
or abandoned by the agencies asked to enforce them. Unions continue to 
push this legislation to unfairly tip the playing field in their favor 
at the expense of the fundamental rights of workers to choose for 
themselves whether to accept or reject union representation.

    S. 420 attempts to dramatically change the way labor unions conduct 
organizing drives by disallowing government-supervised secret ballot 
elections to certify a union as a recognized collective bargaining 
agent and replacing it with a zombie reiteration of ``Card Check.'' For 
more than seventy years, employees have largely decided on unionization 
through a secret ballot election. This legislation, however, would 
force reluctant workers to accept union representation, not when a 
majority of their co-workers vote by secret ballot to accept the union, 
but when 50 percent plus one of those workers simply acquiesce to union 
organizers' efforts to obtain their public signature on a card. This 
provision is intended to ensure that labor unions win organizing 
campaigns by removing a worker's right to vote ``no'' or ``yes'' 
without fear of recrimination by either the union or employer. As a 
Member of the Senate who was elected to your position by a secret 
ballot, you understand that eliminating the fundamental right to vote 
by secret ballot would expose voters--in this instance workers--to 
intimidation and possible harassment.

    The PRO Act would also quash employees' rights to privacy by 
mandating that employers provide the contact information for all 
employees without prior approval from the employees themselves. 
Furthermore, employees would not have the right to opt-out of this 
disclosure of their personal information nor would they have a say in 
which contact information is provided. These are basic privacy rights 
afforded by acts of Congress to American citizens, which this bill 
would deny to workers solely to advantage union organizers.

    This legislation would also codify many requirements of the 
Department of Labor's 2016 ``persuader'' regulation, including the 
provisions that would force a breach of attorney-client 
confidentiality, which was struck down by the courts when it was found 
to be ``defective to its core'' and ``undermine[d] the attorney-client 
relationship and the confidentiality of that relationship.''

    S. 420 also eliminates Right-to-Work protections nationwide, 
superseding the Right-to-Work laws passed in twenty-seven states, 
forcing workers to fund union activity they may not support and 
removing their protection from being fired if they decline to pay union 
dues. The bill would remove existing law that limits unions to thirty 
days of picketing unless they file a representation petition, which 
could allow unions to engage in recognition picketing indefinitely. 
Additionally, the legislation would permit unions to engage in so-
called secondary boycotts, which have been unlawful since 1947, 
exposing consumers, employers, suppliers, vendors, franchisors, 
franchisees, and all other businesses to picketing, boycotts, and 
similar tactics, regardless of whether they have any dispute with the 
union.

    The PRO-Act would also codify the National Labor Relations Board's 
controversial Browning-Ferris Industries joint-employer standard that 
threatens small and local businesses; curb opportunities for people to 
work independently through traditional independent contractor roles or 
gig economy platforms, and prohibit arbitration agreements in 
employment contracts.

    Union ``density'' has fallen dramatically in recent years, but 
rather than address that decline by persuading workers of the merits of 
union representation, labor unions are asking Congress to put its thumb 
on the scale in their favor. If Congress kowtows to the demands of 
labor by passing this legislation the idea of fair elections and due 
process rights for workers and employers alike will be systematically 
dismantled.

    NAW urges you to reject S. 420, the PRO Act, and instead focus on 
helping America recover from the Coronavirus pandemic instead of trying 
to rob workers of their right to a secret ballot and silence the voice 
of employers.

            Sincerely,
                                             Seth M. Waugh,
                                  Associate Vice President,
                                        Government Affairs.
                                 ______
                                 
               Coalition For A Democratic Workplace
                                                     July 21, 2021.
Hon. Patty Murray, Chair
Hon. Richard Burr, Ranking Member
Senate Committee on Health, Education, Labor, and Pensions,
428 Dirksen Senate Office Building,
Washington, DC.

    Dear Chair Murray and Ranking Member Burr:

    The Coalition for a Democratic Workplace (CDW), a broad-based 
coalition of hundreds of organizations representing hundreds of 
thousands of employers and millions of employees in various industries 
across the country, and the 280 undersigned organizations write in 
opposition to the Protecting the Right to Organize (PRO) Act, S. 420.

    This radical legislation would violate workers' free choice and 
privacy rights, jeopardize industrial stability, cost millions of 
American jobs, threaten vital supply chains, and greatly hinder our 
economic recovery from COVID-19. The PRO Act includes dozens of 
provisions that would boost union membership and dues revenue streams 
at the expense of the rights of workers, employers, and consumers 
alike. Forbes Tate Partners (FTP) conducted a survey of over 1,000 
registered voters and found that respondents overwhelmingly were 
concerned with the various policies of the bill, some of which are 
explained below. \1\
---------------------------------------------------------------------------
    \1\  Survey results can be viewed at http://myprivateballot.com/wp-
content/uploads/2021/06/PRO-Act-National-Survey-Summary-6.28.21.pdf.

    The PRO Act would infringe on worker privacy and freedom of choice. 
The bill requires employers to give union organizers employees' 
personal information without prior approval from the employees 
themselves. This includes home addresses, phone numbers, email 
addresses, work shifts and locations, and job classifications. 
Employees couldn't opt out of this requirement or choose which 
information is shared, exposing them to potential harassment, 
intimidation tactics, stalking, and online bullying. FTP's survey found 
---------------------------------------------------------------------------
that 75 percent of respondents were concerned with this policy.

    The PRO Act would also destabilize US industrial operations and the 
economy and threaten supply chains by reversing current bans on 
intermittent strikes and secondary boycotts. Under the PRO Act, unions 
would be able to conduct a series of short intermittent strikes to 
disrupt business operations if an employer doesn't concede to their 
demands, potentially disrupting the economy and critical supply chains, 
including those fundamental to our COVID-19 response. One of the 
fundamental goals of the National Labor Relations Act is to help ensure 
industrial peace. Intermittent strikes, however, would leave unionized 
and nonunionized employers alike in constant fear of work stoppages--
further threatening the already fragile stability of our economy.

    The PRO Act would also rescind all restrictions against ``secondary 
boycotts,'' or activity used by unions to impose economic injury on 
neutral third parties, including consumers, companies, or other unions, 
that do business with a company involved in a labor dispute with the 
union. These activities were banned in the 1940's and 1950's after 
unions engaged in excessive and abusive tactics. Allowing secondary 
boycotts will once again expose all consumers, unions, and businesses 
to coercion, picketing, boycotts, and similar tactics.

    Additionally, the bill drastically shortens the timeframe between 
union organizers petitioning for a union representation election and 
the holding of that election, ensuring employees do not have adequate 
time to hear both sides of the debate over whether union representation 
is right for them. The PRO Act would greatly expand the National Labor 
Relations Board's power to force union representation on employers and 
employees without an election, depriving workers of their right to a 
vote.

    The PRO Act would also eliminate right-to-work protections across 
the country, including in the twenty-seven states whose populations and 
representatives voted for and implemented such laws. Right-to-work laws 
allow workers to choose not to pay union dues to a labor organization 
whose policies and advocacy efforts do not align with their own 
beliefs. These laws ensure workers can continue to work without being 
forced to join a union. According to the FTP survey, 57 percent of 
registered voters believe workers should not be forced to join a union 
as a condition of employment, while 67 percent were concerned with the 
bill's efforts to eliminate right-to-work protections and force workers 
to choose between paying union dues or losing their jobs.

    Furthermore, the PRO Act would impose nationwide California's 
recently adopted and failed ``ABC test'' to determine whether a worker 
is an employee or independent contractor. The ABC test makes it very 
difficult to qualify as an independent contractor, so nationwide 
application would result in many workers losing their independent 
contractor status. This is at odds with what independent contractors 
actually want. Time and again, these workers explain that they choose 
independent work for the flexibility and autonomy it offers. 
Additionally, the ABC test will force businesses that contract with 
such workers to no longer use them for various services out of fear of 
the liability such contracts could trigger. This would threaten small 
businesses that rely on those contracts. This policy was concerning to 
70 percent of FTP's survey respondents.

    Finally, the PRO Act would codify into law the NLRB's controversial 
2015 Browning-Ferris Industries (BFI) decision that expanded and 
muddled the standard for determining when two separate entities are 
``joint-employers'' under Federal labor law. Joint-employers are 
mutually responsible for labor violations committed against the jointly 
employed workers as well as bargaining obligations with respect to 
those workers, so the liability associated with joint-employer status 
is immense. The BFI decision overturned decades of established labor 
law and undermined nearly every contractual relationship, from the 
franchise model to those between contractors and subcontractors and 
suppliers and vendors. The BFI standard also hampered businesses' 
efforts to encourage ``corporate responsibility'' throughout their 
supply chains and business partners. In FTP's survey, 65 percent of 
voters were concerned about the bill upending the franchise business 
model, a business ownership structure that attracts first time small 
business owners from a diverse range of backgrounds and experiences.

    These are only a few of the dangerous policies included in the PRO 
Act. CDW and the 280 undersigned organizations urge the Committee to 
reject this radical legislation and protect the rights of America's 
workers, small businesses, and consumers.

            Sincerely,
    The Coalition for a Democratic Workplace,
    AGC Florida East Coast
    AGC Maine
    AGC of California
    AGC of Kansas
    AGC of Kentucky
    AGC of Metropolitan Washington DC
    AGC of Minnesota
    AGC of Ohio
    AGC of South Dakota, Highway-Heavy-Utility Chapter
    AGC of Wyoming
    Air Conditioning Contractors of America
    Alabama AGC
    Alabama Restaurant & Hospitality Association
    Alaska Cabaret, Hotel, Restaurant & Retailers Association
    American Bakers Association
    American Foundry Society
    American Home Furnishings Alliance
    American Hotel & Lodging Association
    American Mold Builders Association
    American Pipeline Contractors Association
    American Rental Association
    American Seniors Housing Association
    American Society of Employers
    American Staffing Association
    American Supply Association
    American Trucking Association
    Americans for Tax Reform
    Arizona Builders Alliance
    Arizona Restaurant Association
    Arizona Rock Products Association
    Arkansas Hospitality Association
    Arkansas Ready Mixed Concrete Association
    Arkansas State Chamber of Commerce
    Asian American Hotel Owners Association
    Associated Builders and Contractors
    Associated Builders and Contractors Alabama Chapter
    Associated Builders and Contractors Alaska Chapter
    Associated Builders and Contractors Arkansas Chapter
    Associated Builders and Contractors Carolinas Chapter
    Associated Builders and Contractors Central California Chapter
    Associated Builders and Contractors Central Florida Chapter
    Associated Builders and Contractors Central Ohio Chapter
    Associated Builders and Contractors Central Pennsylvania Chapter
    Associated Builders and Contractors Central Texas Chapter
    Associated Builders and Contractors Chesapeake Shores Chapter
    Associated Builders and Contractors Connecticut Chapter
    Associated Builders and Contractors Cornhusker Chapter
    Associated Builders and Contractors Cumberland Valley Chapter
    Associated Builders and Contractors Delaware Chapter
    Associated Builders and Contractors Eastern Pennsylvania Chapter
    Associated Builders and Contractors Empire State Chapter
    Associated Builders and Contractors Florida East Coast Chapter
    Associated Builders and Contractors Florida First Coast Chapter
    Associated Builders and Contractors Florida Gulf Coast Chapter
    Associated Builders and Contractors Georgia Chapter
    Associated Builders and Contractors Greater Baltimore Chapter
    Associated Builders and Contractors Greater Houston Chapter
    Associated Builders and Contractors Greater Michigan Chapter
    Associated Builders and Contractors Greater Tennessee Chapter
    Associated Builders and Contractors Hawaii Chapter
    Associated Builders and Contractors Heart of America Chapter
    Associated Builders and Contractors Illinois Chapter
    Associated Builders and Contractors Indiana/Kentucky Chapter
    Associated Builders and Contractors Inland Pacific Chapter
    Associated Builders and Contractors Iowa Chapter
    Associated Builders and Contractors Keystone Chapter
    Associated Builders and Contractors Maine Chapter
    Associated Builders and Contractors Massachusetts Chapter
    Associated Builders and Contractors Metro Washington Chapter
    Associated Builders and Contractors Minnesota/North Dakota Chapter
    Associated Builders and Contractors Mississippi Chapter
    Associated Builders and Contractors Nevada Chapter
    Associated Builders and Contractors New Hampshire/Vermont Chapter
    Associated Builders and Contractors New Jersey Chapter
    Associated Builders and Contractors New Mexico Chapter
    Associated Builders and Contractors New Orleans/Bayou Chapter
    Associated Builders and Contractors North Alabama Chapter
    Associated Builders and Contractors North Florida Chapter
    Associated Builders and Contractors Northern California Chapter
    Associated Builders and Contractors of Louisiana
    Associated Builders and Contractors of Michigan
    Associated Builders and Contractors Northern Ohio Chapter
    Associated Builders and Contractors Ohio Valley Chapter
    Associated Builders and Contractors Oklahoma Chapter
    Associated Builders and Contractors Pacific Northwest Chapter
    Associated Builders and Contractors Pelican Chapter
    Associated Builders and Contractors Rhode Island Chapter
    Associated Builders and Contractors Rocky Mountain Chapter
    Associated Builders and Contractors San Diego Chapter
    Associated Builders and Contractors South Texas Chapter
    Associated Builders and Contractors Southeast Texas Chapter
    Associated Builders and Contractors Southeastern Michigan Chapter
    Associated Builders and Contractors Southern California Chapter
    Associated Builders and Contractors Texas Coastal Bend Chapter
    Associated Builders and Contractors Texas Gulf Coast Chapter
    Associated Builders and Contractors Texas Mid-Coast Chapter
    Associated Builders and Contractors Utah Chapter
    Associated Builders and Contractors Virginia Chapter
    Associated Builders and Contractors West Tennessee Chapter
    Associated Builders and Contractors West Virginia Chapter
    Associated Builders and Contractors Western Michigan Chapter
    Associated Builders and Contractors Western Pennsylvania Chapter
    Associated Builders and Contractors Western Washington Chapter
    Associated Builders and Contractors Wisconsin Chapter
    Associated Equipment Distributors
    Associated General Contractors of America
    Associated General Contractors of America, Nebraska Chapter
    Associated General Contractors of Michigan
    Associated General Contractors of NH
    Associated General Contractors of Virginia
    Associated General Contractors of Wisconsin
    Associated General Contractors South Texas Chapter
    Associated Industries of Arkansas, Inc.
    Bidgesource, LLC
    Brick Industry Association
    California Restaurant Association
    Carolinas AGC
    Carolinas Ready Mixed Concrete Association
    Catapult, Formerly CAI & TEA
    CAWA--Representing the Automotive Parts Industry
    Center for the Defense of Free Enterprise
    Coalition of Franchisee Associations
    Colorado Restaurant Association
    Connecticut Restaurant Association
    Consumer Technology Association
    Delaware Restaurant Association
    Education Market Association
    Florida Restaurant & Lodging Association
    FMI--The Food Industry Association
    Foodservice Equipment Distributors Association
    Franchise Business Services
    Gases and Welding Distributors Association
    Georgia Restaurant Association
    Global Cold Chain Alliance
    Global Market Development Center
    Hawaii Restaurant Association
    Heating, Air-conditioning, & Refrigeration Distributors 
International
    Hospitality Maine
    Hospitality Minnesota
    Hospitality Tennessee
    HR Policy Association
    IAAPA, the Global Association for the Attractions Industry
    ICSC--Innovating Commerce Serving Communities
    Idaho Lodging & Restaurant Association
    Illinois Restaurant Association
    Independent Electrical Contractors
    Independent Electrical Contractors Atlanta Chapter
    Independent Electrical Contractors CenTex Chapter
    Independent Electrical Contractors Central Ohio Chapter
    Independent Electrical Contractors Central Pennsylvania Chapter
    Independent Electrical Contractors Chesapeake Chapter
    Independent Electrical Contractors East Texas Chapter
    Independent Electrical Contractors Florida West Coast Chapter
    Independent Electrical Contractors Fort Worth/Tarrant Co. Chapter
    Independent Electrical Contractors Georgia Chapter
    Independent Electrical Contractors Greater Cincinnati Chapter
    Independent Electrical Contractors Indy Chapter
    Independent Electrical Contractors Kentucky & So. Indiana Chapter
    Independent Electrical Contractors Lubbock Chapter
    Independent Electrical Contractors Midwest IEC Chapter
    Independent Electrical Contractors Montana Chapter
    Independent Electrical Contractors New England Chapter
    Independent Electrical Contractors New Jersey Chapter
    Independent Electrical Contractors Northern New Mexico Chapter
    Independent Electrical Contractors Northwest Pennsylvania Chapter
    Independent Electrical Contractors Oregon Chapter
    Independent Electrical Contractors Texas Gulf Coast Chapter
    Independent Electrical Contractors Wichita Chapter
    Independent Professionals and Self Employed Association
    Indiana Restaurant & Lodging Association
    Industrial Fasteners Institute
    Interlocking Concrete Pavement Institute
    International Foodservice Distributors Association
    International Franchise Association
    International Warehouse Logistics Association
    Iowa Association of Business and Industry
    Iowa Restaurant Association
    Kansas Chamber of Commerce
    Kansas Restaurant & Hospitality Association
    Kentucky Concrete Association
    Kentucky Restaurant Association
    Leading Builders of America
    Littler Workplace Policy Institute
    Louisiana AGC
    Louisiana Restaurant Association
    Manufactured Housing Institute
    Maryland Ready Mix Concrete Association
    Massachusetts Restaurant Association
    Metals Service Center Institute
    Michigan Concrete Association
    Michigan Restaurant & Lodging Association
    Mid-South Independent Electrical Contractors
    Mississippi Hospitality & Restaurant Association
    Missouri Restaurant Association
    Modular Building Institute
    Montana Contractors Association
    Montana Restaurant Association
    Motor & Equipment Manufacturers Association
    National Apartment Association
    National Association of Chain Drug Stores
    National Association of Chemical Distributors
    National Association of Home Builders
    National Association of Manufacturers
    National Association of Mutual Insurance Companies
    National Association of Sporting Goods Wholesalers
    National Association of Wholesaler-Distributors
    National Club Association
    National Council of Chain Restaurants
    National Federation of Independent Business
    National Franchisee Association
    National Grocers Association
    National Lumber & Building Material Dealers Association
    National Marine Distributors Association
    National Multifamily Housing Council
    National Ready Mixed Concrete Association
    National Restaurant Association
    National Retail Federation
    National Roofing Contractors Association
    National Small Business Association
    National Stone, Sand & Gravel Association
    National Tooling and Machining Association
    National Utility Contractors Association
    NATSO, Representing America's Travel Plazas and Truck Stops
    Nebraska Restaurant Association
    Nevada Chapter AGC
    Nevada Restaurant Association
    New Jersey Motor Truck Association
    New Jersey Restaurant & Hospitality Association
    New Mexico Restaurant Association
    New York State Restaurant Association
    North American Die Casting Association
    North Carolina Restaurant & Lodging Association
    North Dakota Hospitality Association
    Ohio Hotel & Lodging Association
    Ohio Restaurant Association
    Oklahoma Aggregates Association
    Oklahoma Restaurant Association
    Open Competition Center
    Oregon Restaurant & Lodging Association
    Outdoor Power Equipment
    Pennsylvania Restaurant & Lodging Association
    Pet Industry Distributors Association
    Petroleum Equipment Institute
    Plastics Industry Association
    Portland Cement Association
    Power & Communication Contractors Association
    Precision Machined Products Association
    Precision Metalforming Association
    PRINTING United Alliance
    Promotional Products Association International
    Puerto Rico Restaurant Association
    Restaurant Association of Maryland
    Restaurant Association of Metropolitan Washington
    Retail Industry Leaders Association
    Rhode Island Hospitality Association
    SNAC International
    South Carolina Restaurant & Lodging Association
    South Dakota Retailers Association
    Southern Illinois Builders Association
    Texas Restaurant Association
    TEXO, The Construction Association
    The Associated General Contractors of Texas
    The Coalition for a Democratic Workplace
    Tile Roofing Industry Alliance
    Truck Renting and Leasing Association
    U.S. Chamber of Commerce
    United Motorcoach Association
    Utah Restaurant Association
    Virginia Manufacturers Association
    Virginia Ready Mixed Concrete Association
    Virginia Restaurant, Lodging & Travel Association
    Virginia Trucking Association
    West Virginia Hospitality & Travel Association
    Western Carolina Industries
    Western Electrical Contractors Association
    Western Growers
    Wisconsin Ready Mixed Concrete Association
    Wisconsin Restaurant Association
    Workforce Fairness Institute
    Wyoming Lodging & Restaurant Association
                                 ______
                                 
                        app-based work alliance
        The PRO Act and Worker Reclassification: Myths vs. Facts
    Myth: Most app-based workers want to be reclassified as employees 
instead of independent contractors.

    Fact: In poll after poll over the past decade, the overwhelming 
majority of app-based workers have consistently said they do not want 
to be reclassified as employees and want to remain independent 
contractors. The vast majority of app-based workers choose to work less 
than 40 hours a week and like app-based work because it is flexible and 
allows them to set their own schedule.

          MAY 2021 POLL: More than 90 percent of app-based 
        workers said they wouldn't be able to continue with app-based 
        work if they didn't have the flexibility they currently have. 
        More than 70 percent of app-based workers, including 69 percent 
        of workers of color, say they do not support measures to 
        reclassify drivers as employees.

          APRIL 2021 POLL: 77 percent of app-based workers 
        would rather be independent contractors than employees, and 91 
        percent said they would stop working with the app-based 
        companies if they lost the flexibility they currently enjoy.

          FEBRUARY 2021 POLL: Nationwide, 79 percent of app-
        based workers want to remain independent contractors, with only 
        13 percent expressing a desire to become employees.

          AUGUST 2020 POLL: Both drivers and workers 
        overwhelmingly support plans to remain independent contractors 
        while having access to benefits.

    Myth: The ABC Test in the PRO Act won't hurt independent workers or 
lead to a loss of earning opportunities.

    Fact: The ABC Test could lead to the elimination of earning 
opportunities for millions of independent workers who choose to work on 
their own terms. The ABC Test is an outdated legal standard that 
determines who is an employee and who isn't. It does not take into 
consideration the changes that have taken place in the workforce since 
some states adopted ABC tests in the 1930's and is not compatible with 
the 21st century economy. This isn't a theoretical argument--we know 
that the ABC Test will hurt workers because it's the same language that 
was included in California's failed Assembly Bill 5, which resulted in 
uncertainty and lost jobs for California workers.

          It's why the core of AB5 was rejected by a 17 percent 
        margin in California with Proposition 22 last year, but that 
        option won't exist for a Federal law like the PRO Act, which 
        would lock-in AB5-style inflexibility nationwide.

          AB5 caused so many problems that California had to 
        exempt 100+ occupations to make it work. Even then, it 
        disrupted thousands of businesses and caused some companies to 
        move work out of state.

          The PRO Act, by contrast, contains no exceptions. 
        Doctors, lawyers, journalists--all of them would have to pass 
        the ABC test to avoid reclassification. The PRO Act would 
        therefore disrupt an even broader swath of the economy--not 
        just in California, but across the Nation.

    Myth: The PRO Act only affects the National Labor Relations Act and 
does not apply to the IRS or Wage/benefit law in the FLSA. It won't 
impact how other state and Federal agencies, such as the Department of 
Labor, view independent contractors' employment status.

    Fact: This is a disingenuous argument. Once the test for 
classifying a worker as an employee is established for one Federal 
agency, it sets a precedent for other agencies, as well as states and 
courts who are deciding cases on this issue, to follow suit and do the 
same. That's what will happen if the PRO Act passes with California's 
ABC test.

    Myth: The ABC test in the PRO Act simply gives workers the ability 
to unionize, and means that app-based workers and others can stay 
independent contractors if they choose.

    Fact: This is false. If the PRO Act passes, it could reclassify 
thousands of independent contractors as traditional employees, even 
those who have said overwhelmingly they don't want to be. This would 
come as a direct result of the ABC Test in the bill. The ABC Test is a 
word-for-word copy of California's AB5, and just like AB5, this 
provision could lead to independent workers being reclassified as 
employees. Under the PRO Act, even those workers who don't want to be 
part of a union would still be bound by all of the conditions 
negotiated by unions on their behalf, even if they disagree with those 
conditions.

    Myth: App-based companies want to keep the status quo so they don't 
have to give benefits or protections to the workers who drive, deliver, 
and grocery shop with their platforms.

    Fact: App-based companies support and have advocated for an 
``independence plus benefits'' model that would allow earners on their 
platforms to keep their independent status while having access to 
important benefits and protections.

    Myth: The employee classification debate is a Democratic vs. 
Republican issue, and Democratic voters support classifying drivers as 
employees.

    Fact: An overwhelming majority of voters across the political 
spectrum, including Democratic voters, support keeping app-based 
workers as independent contractors with benefits. In one recent poll, 
88 percent of Democratic voters and 89 percent of all young voters aged 
18-34 said they support an ``independence plus benefits'' proposal that 
would keep app-based workers classified as ICs. Another poll found that 
78 percent of Democratic voters from every region of the country 
support an ``independence plus benefits'' model.
                                 ______
                                 
              National Association of Manufacturers
              733 10th Street, NW Suite 700 Washington, DC.
                                                     July 21, 2021.
Hon. Patty Murray, Chair
Hon. Richard Burr, Ranking Member
Senate Committee on Health, Education, Labor, and Pensions,
428 Dirksen Senate Office Building,
Washington, DC.

    Dear Chair Murray and Ranking Member Burr:

    On behalf of the National Association of Manufacturers, the largest 
manufacturing association in the United States representing 14,000 
manufacturers in every industrial sector and in all 50 states, I write 
in response to today's public hearing, ``The Right to Organize: 
Empowering American Workers in a 21st Century Economy.'' Manufacturers 
remain committed to protecting employees' freedom to associate and 
their choice to accept or reject labor union representation but 
strongly oppose S. 420, the Protecting the Right to Organize Act.

    Manufacturers are united in their opposition to S. 420 because the 
legislation will dramatically alter a carefully balanced equilibrium 
guiding labor and management relations. In March 2021, 97 percent of 
respondents to the NAM Manufacturers' Outlook Survey said the PRO Act 
would negatively impact business operations and damage relationships 
with employees. \1\ Further, the PRO Act would lead to long-lasting 
damage to manufacturing workers' rights and their privacy by shifting 
the long-established role of the employer away from a company 
supervisor to a union shop steward.
---------------------------------------------------------------------------
    \1\  https://www.nam.org/wp-content/uploads/2021/03/NAM-Outlook-
Survey-Q1-2021.pdf.

    The PRO Act goes beyond supporting a worker's right to organize and 
advances a workplace environment that could lead to privacy violations, 
employee intimidation and suppression of communications from employers. 
An individual's free and confidential choice to join a union will be 
lost in this new labor-management paradigm. Further, 27 states will 
lose their right-to-work status if this legislation is enacted, 
representing a significant Federal overreach that harms employers and 
---------------------------------------------------------------------------
individuals alike.

    As our Nation emerges from the depths of the COVID-19 pandemic and 
confronts new challenges, manufacturers cannot afford to become more 
restrictive and less competitive by the hand of our Federal Government. 
I appreciate your attention to these concerns and look forward to 
working with you on proposals that instead support manufacturing and 
its workers.

            Sincerely,
                                           Robyn Boerstling
                                 ______
                                 
         National Ready Mixed Concrete Association,
       National Stone, Sand and Gravel Association,
                       Portland Cement Association.
                                                     July 20, 2021.
Hon. Patty Murray, Chair
Hon. Richard Burr, Ranking Member
Senate Committee on Health, Education, Labor, and Pensions,
428 Dirksen Senate Office Building,
Washington, DC.

    Dear Chair Murray and Ranking Member Burr:

    On behalf of the National Stone, Sand & Gravel Association (NSSGA), 
the National Ready Mixed Concrete Association (NRMCA), and the Portland 
Cement Association (PCA), we write to share our views on proposed 
legislation as you prepare for the upcoming hearing to examine the 
``Right to Organize: Empowering American Workers in a 21st Century 
Economy''.

    The aggregates, cement, and concrete industries are paramount to 
our Nation and quite literally building the foundation of the U.S. 
economy, as our products are used to construct almost any type of 
infrastructure project, building, or home. Cement and concrete products 
manufacturing employs over 600,000 people--directly and indirectly--in 
our country and contributes over $100 billion to our economy. America's 
stone, sand and gravel industry is responsible for 100,000 direct jobs 
and over $25 billion in economic impact. The vast majority of our 
membership in the ready mixed and aggregates sectors are family owned, 
small businesses. Across all industries, we are proud to provide 
meaningful, stable long-term careers with many opportunities for growth 
and advancement. Our industries support high paying jobs, with average 
compensation over $75,000.

    Our member companies support the right of workers to choose to 
organize, and many of our employers across the country partner with 
labor organizations to provide high-earning jobs to the men and women 
responsible for producing construction materials. We are proud of our 
strong relationship with labor organizations to address the Nation's 
infrastructure challenges.

    However, legislative proposals like the misleadingly named 
``Protecting the Right to Organize'' (PRO) Act is an unprecedented 
attempt to fundamentally change dozens of well-established labor laws 
at a time of tenuous economic recovery. While there have been no 
reported barriers with workers seeking to consider unionizing in our 
industry, this legislation would disrupt the rights of workers and 
employers and add unworkable mandates that would severely impact the 
ability to efficiently produce and deliver construction materials. It 
is a solution in search of a problem.

    The PRO Act would effectively eliminate right-to-work laws that 
have been democratically adopted in 27 states, undermining numerous 
state constitution and our workers constitutionally protected rights. 
This is a dramatic overreach by the Federal Government.

    Further, the PRO Act would hinder opportunities for individuals to 
work through traditional independent contractor roles, which are 
critical in the transportation of construction materials to job sites. 
Specifically, the legislation would amend the National Labor Relations 
Act (NLRA) to include the California Supreme Court's recently adopted 
and failed ``ABC test,'' which makes it very difficult to qualify as an 
independent contractor. This would result in many workers, who play a 
critical role in transporting aggregates and concrete to job sites, 
losing their independent contractor status. This will lead to 
confusion, increased costs and uncertainty as we are working to supply 
the growing demand for construction materials across the country. 
Further, data shows that implementing the so-called ``ABC Test'' 
standard could threaten as much as 8.5 percent of the Nation's gross 
domestic product (GDP).

    Finally, we have great concerns with other provisions included in 
the PRO Act that would hinder employers and employees' rights and 
privacy, including:

          shortening the time window for a union election;

          employers would not be able to challenge union 
        misconduct during union elections;

          codifying the ``quickie'' election rules, limiting 
        employees' opportunity to consider information about the union 
        seeking to represent them;

          right to counsel on complex labor laws would be 
        practically eliminated; and

          employers would be forced to disclose employee's 
        personal information without employees consent or their ability 
        to opt out, and secondary boycotts would be permitted, allowing 
        unions to target neutral third parties and cause them economic 
        injury even if those entities have no underlying labor dispute 
        with the union.

    Many of these provisions would be particularly burdensome on small 
employers who do not have the resources to confront new regulatory 
challenges. This is especially troubling as Congress is working 
feverously with the Biden administration to advance a long-awaited, 
bipartisan infrastructure proposal. Unnecessary mandates proposed under 
the PRO Act would lead to delays and cost increases as our members 
supply the materials needed to improve our outdated infrastructure.

    For these reasons, as you examine labor rights in today's 
workplace, we implore you to oppose this misguided legislation and work 
with us to ensure unnecessary Federal mandates are not included in any 
infrastructure package that advances through the Congress.

    Thank you for your consideration of our member's views and please 
do not hesitate to contact us we may be of any further assistance.

            Sincerely,
    National Ready Mixed Concrete Association,
    National Stone, Sand & Gravel Association,
    Portland Cement Association.
                                 ______
                                 
                 American Council of Life Insurers,
                                                     March 4, 2021.
Hon. Nancy Pelosi Speaker
Hon. Kevin McCarthy Minority Leader
U.S. House of Representatives,
H-222, H-204, U.S. Capitol,
Washington, DC.

    Dear Speaker Pelosi and Minority Leader McCarthy:

    As the Chief Executive Officers of trade associations that 
collectively represent more than 100,000 individual small business 
owners, broker-dealers and insurance companies providing financial 
services to more than 112 million American families, we are writing to 
express our members' strong concerns with H.R. 842, The Protecting the 
Right to Organize (PRO) Act. This legislation seeks to change the 
definition of ``independent contractor'' in a way that would cause 
significant disruption to the independent financial services and 
property casualty insurance industries and the customers we serve.
    The current model provides financial services professionals with 
multiple avenues for advising and helping American families and 
businesses build secure financial futures and protect their assets. 
Some choose to engage in this work as employees, while many others 
prefer the freedom and independence that comes from operating their own 
business utilizing the independent contractor status. Many have 
substantial relationships with one or more insurance companies, broker 
dealers, or registered investment advisors, which allows them to offer 
expanded options to their customers. These small business owners enter 
into written agreements with insurance companies (or general agents of 
insurance companies), broker dealers or registered investment advisors 
that carefully set forth the terms of the independent contractor 
status. It would be enormously disruptive to negate these agreements 
through Federal legislation.
    By effectively reclassifying independent contractors as employees, 
the PRO Act would create unintended consequences for the industry, and 
specifically insurance producers and independent financial advisors. 
These individuals are vital to ensuring that Main Street Americans have 
access to the important advice, products and services necessary to 
achieve their financial goals and protect their homes, families and 
businesses. In times of catastrophe, insurers engage independent 
contractors to provide a faster response for consumers experiencing 
loss. The PRO Act's ``ABC test'' could eliminate the choice a majority 
of practitioners have made to serve clients independently. In turn that 
could drastically reduce clients' ability to access high quality advice 
for their insurance, investment and retirement security needs.
    Additionally, affiliated financial advisors have a long history of 
appropriate classification as independent contractors and are not 
involved in the worker classification problems found in other 
industries. They are not employees for purposes of determining 
applicability of Federal (ERISA and EEO1) reporting requirements and 
State wage and benefit provisions. Compensation practices in the 
securities industry are carefully recorded, with IRS Form 1099 
reporting universally required. As a result, the problems of cash 
payments and unreported income that may exist in other industries do 
not exist in the securities and insurance professions. Furthermore, the 
insurance industry and independent broker dealers are highly regulated.

    As you consider H.R. 842, we hope that you will be mindful of the 
negative impact that this legislation will have on customers, agents 
and advisors working to ensure that their clients have the resources to 
make wise financial decisions and ensure financial security for 
themselves and their families.

            Sincerely,
                                            Susan K. Neely,
                         American Council of Life Insurers.
                                          David A. Sampson,
          American Property Casualty Insurance Association.
                                  Christopher A. Iacovella,
                           American Securities Association.
                                                Marc Cadin,
                                                   Finseca.
                                             Ken A. Crerar,
                   Council of Insurance Agents and Brokers.
                                                Dale Brown,
                              Financial Services Institute.
                                              Bob Rusbuldt,
                               Independent Insurance Agents
                        and Brokers Association of America.
                                              Wayne Chopus,
                              Insured Retirement Institute.
                                                Jim Hodges,
                       National Alliance of Life Companies.
                                          Chuck DiVencenzo,
                  National Association for Fixed Annuities.
                                           Janet Trautwein,
               National Association of Health Underwriters.
                                           Kevin M. Mayeux,
                                                       CAE,
  National Association of Insurance and Financial Advisors.
                                            Chuck Chamness,
        National Association of Mutual Insurance Companies.
                                   Kenneth E. Bentsen, Jr.,
     Securities Industry and Financial Markets Association.
                                 ______
                                 

                         QUESTIONS AND ANSWERS

 Response by Heidi Shierholz to questions of Senator Lujan and Senator 
                                 Casey

                             senator lujan
    My family raised me to understand that our communities are stronger 
when workers are protected and empowered. My grandfather was a union 
carpenter, my dad was a union ironworker in Local 495, and my mom 
worked for the public schools. My brother is IBEW and my nephew was 
just accepted into an IBEW apprenticeship.

    I've said this before, but I believe that everybody in America 
should have the same opportunity my grandfather, father and siblings 
have had: to work hard, to build real economic security, and to pass 
something better on to your children and grandchildren. Those are the 
values I learned growing up, and ones I continue to fight for in 
Congress. The testimony we heard today from our witnesses includes a 
number of troubling statistics.

    Question 1. Ms. Shierholz, between 1979 and 2020, how much did the 
union coverage rate drop?

    Answer 1. Between 1979 and 2020, the share of workers covered by a 
collective bargaining agreement dropped from 27.0 percent to 12.1 
percent. \1\ This means the union coverage rate is now less than half 
where it was four decades ago.
---------------------------------------------------------------------------
    \1\  Economic Policy Institute, ``Union Coverage,'' The State of 
Working America Data, last updated February 2021.

    Question 2. Ms. Shierholz, would you agree that as union membership 
---------------------------------------------------------------------------
declines are correlated with increased income inequality?

    Answer 2. Yes.

    Question 3. Ms. Shierholz, and how much of the growth in inequality 
between typical workers and the rich can be explained by de-
unionization?

    Answer 3. Recent research shows that de-unionization accounts for 
one-third of the growth in inequality between typical workers and 
workers at the high end of the wage distribution in recent decades. \2\
---------------------------------------------------------------------------
    \2\  Lawrence Mishel, The Enormous Impact of Eroded Collective 
Bargaining on Wages, Economic Policy Institute, April 8, 2021.

    Question 4. Ms. Shierholz, what is the share of workers in 2020 who 
---------------------------------------------------------------------------
said they would join a union if given the opportunity?

    Answer 4. Research shows that nearly half (48 percent) of all 
nonunion workers who say they would vote for a union if given the 
opportunity--a 50 percent higher share than when a similar survey was 
taken in 1995. \3\
---------------------------------------------------------------------------
    \3\  Thomas A. Kochan et al., ``Worker Voice in America: Is There a 
Gap Between What Workers Expect and What They Experience?'' ILR Review 
72, no. 1 (January 2019): Figure 3, https://doi.org/10.1177/
0019793918806250.

    In addition, a 2020 Gallup poll finds that 65 percent of Americans 
approve of labor unions--the highest percentage in 16 years. \4\
---------------------------------------------------------------------------
    \4\  Megan Brenan, ``At 65 percent, Approval of Labor Unions in 
U.S. Remains High,'' Gallup website, September 3, 2020.

    Question 5. Ms. Shierholz, why should we make it easier to organize 
---------------------------------------------------------------------------
and form unions if we want to reduce economic inequality?

    Answer 5. When workers are able to come together, form a union, and 
collectively bargain, their wages, benefits, and working conditions 
improve. \5\ Further, when union density is high, nonunion workers 
benefit, because unions effectively set broader standards--including 
higher wages--that nonunion employers must meet in order to attract and 
retain the workers they need. The combination of the direct effect of 
unions on union members and this ``spillover'' effect to nonunion 
workers means unions are crucial in raising wages for working people 
and reducing income inequality. \6\
---------------------------------------------------------------------------
    \5\  Josh Bivens et al., How Today's Unions Help Working People: 
Giving Workers the Power to Improve Their Jobs and Unrig the Economy, 
Economic Policy Institute, August 2017.
    \6\  Jake Rosenfeld, Patrick Denice, and Jennifer Laird, Union 
Decline Lowers Wages of Nonunion Workers, Economic Policy Institute, 
August 2016.
---------------------------------------------------------------------------
                             senator casey
    Dr. Shierholz, in your testimony, you state that on average, a 
worker covered by a union contract earns 10.2 percent more in wages 
than a peer with similar education, occupation, and experience in a 
nonunionized workplace in the same sector, and that more than nine in 
ten workers covered by a union contract have access to paid sick days. 
You also state that as union membership has declined, income inequality 
has increased.

    Question 1. Can you discuss how declines in unionization over time 
have impacted wages and benefits, like paid sick leave and health care, 
for American workers as a whole?

    Answer 1. When union density is high, workers with strong unions 
have been able to set industry standards for wages and benefits that 
help all workers, both union and nonunion. For instance, recent 
research finds the erosion of collective bargaining lowered the median 
hourly wage by $1.56, a 7.9 percent decline from 1979 to 2017. These 
losses from de-unionization are the equivalent of $3,250 annually for a 
full-time, full-year worker. \1\
---------------------------------------------------------------------------
    \1\  Lawrence Mishel, The Enormous Impact of Eroded Collective 
Bargaining on Wages, Economic Policy Institute, April 8, 2021.

    Unions have also been a key part of efforts to pass laws that 
provide economic security, strong communities, and dignity on the job 
for all workers. The labor movement helped pass and defend the 
Occupational Safety and Health Act, the Civil Rights Act, the Social 
Security Act, Medicare and Medicaid, and numerous other laws benefiting 
all workers and their communities. Further, cities and states that have 
adopted paid sick days laws, $15 minimum wage, and other progressive 
legislation have some of the highest union density and strongest labor 
movements. \2\
---------------------------------------------------------------------------
    \2\  See Table 1 in Economic Policy Institute, Unions Help Reduce 
Disparities and Strengthen Our Democracy (fact sheet), April 23, 2021.
---------------------------------------------------------------------------
                                 ______
                                 

        Response by Gracie Heldman to questions of Senator Lujan

                             senator lujan
    Question 1. Ms. Heldman, what would having the opportunity to join 
a union mean to you and your coworkers?

    Answer 1. As my manager told me, ``You have no rights once you walk 
into the factory.'' Joining a union would give us true representation 
with a real voice and rights. To have the ability and right to 
negotiate over our wages, benefits and working conditions would mean 
the world to the majority of us working at the bakery. To have a union 
contract where we, the workers, have rights and a grievance procedure 
guaranteed and to be treated with dignity and respect are all my co-
workers and I want.

    Question 2. Ms. Heldman, what penalties and changes that would be 
brought about by the PRO Act would improve your workplace?

    Answer 2. The PRO Act would eliminate the ``mandatory captive 
audience'' meetings management holds every time the workers try to join 
the BCTGM Union. These meetings are very intimidating where one top 
manager or union avoidance speaker talks very negatively about the 
union, threatening us with possible loss of wages and benefits if we 
vote yes for the union.

    While we're in a large group in the middle of the room the rest of 
the room is surrounded by supervisors who are staring and observing our 
reactions to everything that is being said by the Speaker.

    The PRO Act would also personally penalize the top corporate 
officials for violating the law or for discriminating against those of 
us who support organizing as a union.

    The PRO Act would also force the company and the union to reach a 
first contract. This is another threat managers and union busters tell 
us during an organizing campaign. If we win, we'll never get a contract 
and if we strike, we'll be permanently replaced.

 Response by Mark Gaston Pearce to questions of Senator Lujan, Senator 
                      Burr, and Senator Tim Scott

                             senator lujan
    Question 1. I am a strong supporter of the PRO Act, which would 
greatly strengthen workers' ability to join a union. A Massachusetts 
Institute of Technology study found that nearly half of all nonunion 
workers--or more than 60 million people--would join a union today if 
given the chance, yet today only 12 percent of all workers, or 16 
million, are actually represented by a union. The right to a union and 
collective bargaining is also directly relevant to our urgent national 
response to the pandemic. Without unions, many workers are forced to 
work without personal protective equipment or access to paid leave or 
premium pay. The Economic Policy Institute recently estimated that 
workers in low-wage sectors, traditionally with low union 
representation, were six times less likely to be able to work from 
home. However, with a union, workers can negotiate additional pay, 
health and safety measures, paid sick leave, and job preservation. 
Unionized workers also feel more secure speaking out about hazards. To 
ensure more workers can join a union and secure safer working 
conditions in the wake of the pandemic, it is vital we pass the PRO 
Act. Mr. Pearce, how would passing the PRO Act increase workers' 
ability to join a union and secure safer workplaces?

    Answer 1. Two specific ways that the PRO Act increases workers' 
ability to form a union is by limiting employer interference in 
determining the makeup of the bargaining unit and by mandating that 
pre-election hearings occur no later than 8 days after the NLRB issues 
a notice of election. Today, when employees present their 
representation petition to the Board, employers intending to quash 
their employees' voices can effectively control the timing of the 
election by challenging the scope of the employees' proposed bargaining 
unit. This forces a pre-election hearing on the issue, which itself can 
then be further postponed or dragged out by employers.

    A 2011 investigation by the U.C. Berkeley Labor Center found that 
in cases where pre-election hearings are held, the actual election 
occurs an average of 124 days after the petition is filed, \7\ during 
which time employees are often subject to the employer's anti-union 
campaign messaging and intimidation. The same study found a 
``considerable causal relationship'' between the length of election 
delay and the number of unfair labor practice charges filed against 
employers, \8\ which can further delay the vote and increase rancor 
between parties. In the worst of these scenarios, employers will target 
the leaders of the incipient union and discipline or discharge them, 
resulting in a chilling effect across the whole bargaining unit. By 
reducing employers' opportunities to suppress union support through a 
prolonged elections process, the PRO Act will increase the likelihood 
that workers will navigate the process to a successful end.
---------------------------------------------------------------------------
    \7\  John Logan, et al., Research Brief: New Data: NLRB Process 
Fails to Ensure a Fair Vote, June 2011, available at https://
laborcenter.berkeley.edu/pdf/2011/NLRB-Process-June2011.pdf.
    \8\  Id.

    With regard to safer workplaces, workplace safety has long been 
considered a paradigmatic mandatory subject of bargaining. An employer 
may not unilaterally change a mandatory subject of bargaining without 
negotiating with the incumbent union. By making the process of gaining 
union representation less arduous, the PRO Act will increase the number 
of workers who will get a say in their employer's workplace safety and 
COVID policies, e.g., social distancing/masking at the workplace, 
---------------------------------------------------------------------------
access to personal protective equipment, vaccines, and more.

    Question 2. Mr. Pearce, how would passing the PRO Act combat the 
decline in unionization we have seen over the past several decades?

    Answer 2. In addition to the streamlined election procedure making 
the process of unionization less fraught, the PRO Act will stem the 
decline in unionization by addressing the perverse incentives employers 
have to violate their employees' Section 7 rights.

    Today, employers are not subject to monetary penalties for 
retaliating against workers for union support, and workers are only 
entitled to remedial damages if they are fired in violation of Section 
8(a)(3). A study conducted by the Peterson Institute for International 
Economics concluded that ``a typical firm may have an incentive to fire 
a worker illegally for union activities if this illegal firing would 
reduce the likelihood of unionization at the firm by as little as 0.15-
2 percent.'' \9\ The PRO Act greatly increases the costs for employers 
who choose to suppress union organizing by engaging in unfair labor 
practices. Not only does the PRO Act expand the list of employer unfair 
labor practices to include bans on captive audience meetings, the 
withdrawal of recognition from a union without certification, and 
permanent replacement of economic strikers, it also includes monetary 
penalties of up to $50,000 per unfair labor practice violation, and 
$100,000 for repeat violators. Employees who win their jobs back may 
also receive front pay, consequential damages, punitive damages and 
attorneys' fees.
---------------------------------------------------------------------------
    \9\  Anna Stansbury, Do US Firms Have an Incentive to Comply with 
the FLSA and the NLRA?, June 2021, available at https://www.piie.com/
sites/default/files/documents/wp21-9.pdf.

    For a sense of how just one of those new unfair labor practices 
will force firms to change their calculus in dealing with unionizing 
employees, one only needs to read the Hearing Officer's Report on 
Objections in the Amazon election in Bessemer, Alabama. \10\ The report 
revealed that Amazon ``held [captive audience] meetings 6 days a week, 
18 hours a day.'' \11\ If each captive audience meeting triggered a 
penalty as high as $50,000, even the largest companies in the country 
would be wise to consider a more cooperative approach to their dealing 
with a unionizing workforce.
---------------------------------------------------------------------------
    \10\  Amazon.Com Services LLC, Hearing Officer's Report on 
Objections, Case 10-RC-269250, Aug. 2, 2021.
    \11\  Id. at p.6.

    But even if a giant company was prepared to absorb the new monetary 
penalties to sabotage a unionization drive, the PRO Act directs the 
Board to set aside election results that have been tainted by unfair 
labor practice violations, and to issue a bargaining order if the 
employees can show that they had majority support in the previous year 
(for example, by having a majority of the bargaining unit sign union 
---------------------------------------------------------------------------
authorization cards).

    By streamlining the election process and addressing the perverse 
incentives that encourage employers to violate the law to avoid dealing 
with their employees as equals, the PRO Act will go a long way toward 
making sure that those 60 million American workers who want a union 
will have a fair chance at building one.
                                 ______
                                 
                              senator burr
    Question 1. During the hearing, you testified that the ABC worker 
classification test included in the PRO Act is `` . . . not new, it's 
been done by half of the states in this country for the purposes of 
wage and hours and other benefits and unemployment insurance.''

          My understanding is that some form of the ABC test is 
        used in 21 states. However, 19 of those 21 states use a 
        different and less restrictive version of the test than is used 
        in the PRO Act. Legal experts with the firm Morgan Lewis have 
        written, ``Only Massachusetts and California have adopted the 
        PRO Act's strict version of the ABC test to determine employee 
        status . . . '' They add that ``California adopted 48 industry 
        and occupation exemptions'' to its ABC test and that ``the 
        majority states'' do not use any version of the ABC test ``to 
        determine if a worker is an employee for wage and hour 
        purposes.''

          Would you please provide the Committee a list of 
        states that use the exact same version of the ABC test in the 
        PRO Act along with a copy of the respective states' statutory 
        language as compared to the statutory language in the PRO Act's 
        ABC test?

    Answer 1. I am attaching a chart which reflects states which have 
adopted an ABC test as of April 21, 2021 but I am not certain this is 
exhaustive or completely up to date. I have not studied those laws 
extensively and am not an expert on state employment laws in all fifty 
states.

    Question 2. In Sept. 2019, California Gov. Gavin Newsom signed AB5, 
which codified the strict ABC test used in the PRO Act as the legal 
test in California for determining whether a worker is properly 
classified as an independent contractor rather than a traditional W2 
employee. The test immediately ran into difficulties and a ``clean-up'' 
bill needed to be passed to exempt 109 categories of work from the ABC 
test. More workers such as ride-sharing drivers and delivery providers 
fought for and won their exemption through a ballot initiative approved 
by an overwhelming majority of Californians. The PRO Act's ABC test 
contains zero exemptions.

          Do you believe any such exemptions should exist? If 
        so, please provide the Committee a list of work categories that 
        you believe should be exempted from the ABC test.

          California's Proposition 22, which granted an 
        exemption to ride-sharing drivers as well as others, passed 
        with nearly as big of a majority as President Biden achieved in 
        the state. Do you believe that the backlash the ABC test 
        received in California, likely the most liberal state in the 
        Nation, suggests that the state government went too far?

    Answer 2. As noted in my response to the previous question, I am 
attaching a chart which reflects the states that have passed an ABC 
test at least as of April 21, 2021 but I am not certain this is an 
exhaustive list. I have not carefully examined all the provisions in 
each of these state laws and am not an expert on state employment laws 
in all fifty states and would not venture an opinion regarding statutes 
I have not carefully reviewed.
                            sentor tim scott
                               A-B-C Test
    Question 1-5. During the hearing, in a response to a question from 
Senator Baldwin, you indicated that the ABC test ``is not new . . . 
it's being done by half of the states in this country for the purpose 
of wage and hours and other benefits and unemployment insurance . . . 
so, what it does is codify that standard so that it would apply in 
discerning who is eligible for coverage under the National Labor 
Relations Act.''

    Please answer the following with specificity:

        I. Please list the states that have enacted the ABC test as 
        outlined in the Protecting the Right to Organize Act. For 
        reference, the text of the provision in the PRO Act is provided 
        below.

        II. For instances where states have adopted some form of an ABC 
        test, but it differs from the PRO Act, please provide the 
        Committee with a list of those states.

        III. If there are differences between the ABC test provision in 
        the PRO Act and ABC tests at the state level, please provide 
        the Committee with your perspective on the rationale for such 
        differences.

        IV. Is there a version of the ABC test that more states have 
        enacted than the ABC test that is included in the PRO Act?

        V. Do you believe that the ABC test that is in the PRO Act 
        should extend beyond the National Labor Relations Act to other 
        wage and hour laws, such as the Fair Labor Standards Act?

    ``(2) EMPLOYEE.--Section 2(3) of the National Labor Relations Act 
(29 U.S.C. 152(3)) is amended by adding at the end the following: ``An 
individual performing any service shall be considered an employee 
(except as provided in the previous sentence) and not an independent 
contractor, unless----

        ``(A) the individual is free from control and direction in 
        connection with the performance of the service, both under the 
        contract for the performance of service and in fact;

        ``(B) The service is performed outside the usual course of the 
        business of the employer; and

        ``(C) The individual is customarily engaged in an independently 
        established trade, occupation, profession, or business of the 
        same nature as that involved in the service performed.''

    Answer 1-5. I am attaching a chart which reflects states which have 
adopted an ABC test as of April 21, 2021 but I am not certain this is 
exhaustive or completely up to date. I have not studied those laws 
extensively and am not an expert on state employment laws in all fifty 
states.

      Response by Jyoti Sarolia to questions of Senator Tim Scott

                            sentor tim scott
                   A-B-C Test/Independent Contractor
    Before my time in Congress, I was a businessman. I was a 
franchisee, I was a direct seller, and I ran multiple small businesses. 
So when it comes to legislation like the PRO Act, which would be the 
most sweeping labor legislation in multiple generations, I know exactly 
what it would do to folks that are small business owners or independent 
contractors today.

    As a someone who worked as a direct seller early in my career--and 
benefited substantially from being able to work as an independent 
contractor--I'm deeply concerned by recent efforts to nationalize the 
so-called ``A-B-C'' test for worker classification, which represents a 
staggering departure from decades of precedent.

    The Department of Labor estimates that there are 15.6 to 22.1 
million individuals who are IC status, and the Bureau of Labor 
Statistics found that almost 80 percent of independent contractors 
prefer that arrangement over being an employee.

    It's no secret why! It gives them greater flexibility and ownership 
over their work--and this is true across dozens of sectors, not just 
within the so-called gig economy.

    California has presented us with a case in point of what happens 
when you attempt to impose the ABC test on a diverse workforce. AB-5, 
which put in place the new test, had roughly 100 exemptions by the end 
of the legislative process. When you need that many carve-outs, you 
know you've got a lousy law.

    The people of deep-blue California agreed. Nearly 60 percent voted 
to support a referendum ensuring that app-based and delivery drivers 
could continue to operate as independent contractors, which was 
overwhelmingly their preference.

    After seeing the mayhem in California unfold over this disastrous 
legislation, I don't see how anyone could support nationalizing the 
exact rule that was voted down by the people of California.

    I know folks in South Carolina do not want to be a part of this 
failed experiment.

    Please answer the following with specificity:

    Question 1. Do you agree that the PRO Act's ABC test would 
significantly disturb numerous sectors including freelance journalists, 
app-based drivers, insurance agents, and more?

    Answer 1. The PRO Act's ABC test to determine independent 
contractor status would have significant implications for many 
industries, including the franchise business model. First, the ABC test 
would take away the independence of small franchise owners and mislabel 
every franchise owner and their employees as employees of the national 
brand, making franchised businesses no different than corporately owned 
and operated locations. It would undoubtedly rid franchise business 
owners like myself of the hard-earned equity and effort we have 
invested into our hotels and other establishments.

    Second, I understand that most app-based driver and freelance 
workers also prefer the autonomy in their work. Most freelancers and 
app-based drivers almost always fail prong `B' of the ABC test. Since 
the nature of, and reliance on independent contracting varies by 
industry, a one-size-fits-all policy ignores the complexity and nuance 
of such work arrangements.

    The flexible nature of their work also allows them to spend more 
time outside of work with their families, and loved ones.

    Question 2. If there is such a high degree of satisfaction among 
those who choose to earn a living as an independent contractor, then 
why do we need an ABC test that would force them to be reclassified as 
employees, or worse lose their jobs, as we saw in California?

    Answer 2. Respectfully, we do not need a one-size-fits-all approach 
to defining who is an employee and/or and independent contractor. When 
it comes to independent contractor status, an imbalanced approach only 
serves to needlessly disrupt the economy. Given the potential for 
chaos, lawmakers must find a better way to assist the minority of 
workers who engage in alternative work arrangements but would prefer 
more traditional forms of work.

    Under the ABC test, all three elements must be met for a worker to 
remain independent. Fail one prong, and you must be considered an 
employee. This is problematic for most industries, including businesses 
like mine where we would become employees of the brand, rather than 
staying independent business owners.

    Lawmakers in California were forced to amend AB 5 in 2020, creating 
dozens of additional exceptions. Some of those still working under the 
ABC test can at least leave California if the burden proves too much. 
However, if the ABC test becomes Federal law, there is nowhere to 
escape.
                             Right-to-Work
    South Carolina is one of 27 right-to-work states. Those 27 states 
protect 61 million workers from being forced to pay mandatory union 
dues whether or not they want to be represented by a union.

    While tens of thousands of South Carolinians are union members, and 
I fully respect their right to join a union, I also strongly support 
the right of every worker to keep his or her job without being forced 
to join or financially support a union.

    I believe this issue comes down to a worker's freedom to choose for 
themselves.

    Unfortunately, the PRO Act is not about worker freedom at all. 
Instead it's more about increasing the amount of money that goes to 
union bosses.

    The PRO Act would take away the right of a worker to choose whether 
to pay into a union or not--and instead require it, and it would 
increase dues by $9 billion annually at the expense of workers, small 
businesses, entrepreneurs, and consumers.

    South Carolina enacted its right-to-work law in 1954 and our right-
to-work protections for workers have translated into robust growth in 
jobs, personal income, and economic output for the state.

    South Carolina is home to a number of industries and manufacturers 
that have chosen to locate to the Palmetto State because of our pro-
growth, pro-worker policies.

    That is what you get when you give workers the right to choose. 
When you take that choice away, the only winners are the union bosses.

    Please answer the following with specificity:

    Question 1. Do you think it would be in the interest of workers to 
repeal state level right-to-work laws and if not why?

    Answer 1. California is not a right-to-work state, so I can only 
speak from my personal experience. That being said, there are several 
studies published that have found that states with a right-to-work law 
are associated with higher wages and more economic growth. In addition, 
studies have also found that an enactment of a right-to-work law 
increases self-reported current life satisfaction, expected future life 
satisfaction, and improves sentiments about current and future economic 
activity among workers. These effects are especially large among union 
workers. The PRO Act already has several harmful provisions for small 
businesses and their workers, and repealing dozens of state laws in 
this area appears to be another one.
                                 ______
                                 
    [Whereupon, at 12:15 p.m., the hearing was adjourned.]

                                 [all]