[Senate Hearing 117-259]
[From the U.S. Government Publishing Office]





                                                        S. Hrg. 117-259
 
    SHOULD TAXPAYER DOLLARS GO TO COMPANIES THAT VIOLATE LABOR LAWS?

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

                                HEARING

                               before the

                        COMMITTEE ON THE BUDGET
                          UNITED STATES SENATE

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             SECOND SESSION

                               __________

                              May 5, 2022

                               __________

           Printed for the use of the Committee on the Budget
           
           
           
           
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                         ______
 
              U.S. GOVERNMENT PUBLISHING OFFICE 
47-606          WASHINGTON : 2022 
 
 
 
           
           


                        COMMITTEE ON THE BUDGET

                   BERNARD SANDERS, Vermont, Chairman
PATTY MURRAY, Washington             LINDSEY O. GRAHAM, South Carolina
RON WYDEN, Oregon                    CHARLES E. GRASSLEY, Iowa
DEBBIE STABENOW, Michigan            MIKE CRAPO, Idaho
SHELDON WHITEHOUSE, Rhode Island     PATRICK TOOMEY, Pennsylvania
MARK R. WARNER, Virginia             RON JOHNSON, Wisconsin
JEFF MERKLEY, Oregon                 MIKE BRAUN, Indiana
TIM KAINE, Virginia                  RICK SCOTT, Florida
CHRIS VAN HOLLEN, Maryland           BEN SASSE, Nebraska
BEN RAY LUJAN, New Mexico            MITT ROMNEY, Utah
ALEX PADILLA, California             JOHN KENNEDY, Louisiana
                                     KEVIN CRAMER, North Dakota

                Warren Gunnels, Majority Staff Director
                  Nick Myers, Minority Staff Director
                  
                            C O N T E N T S

                              ----------                              

                         WEDNESDAY, MAY 5, 2022
                OPENING STATEMENTS BY COMMITTEE MEMBERS

                                                                   Page
Chairman Bernard Sanders.........................................     1
Ranking Member Lindsey Graham....................................     4

                               WITNESSES

Statement of Mr. Christian Smalls, President, Amazon Labor Union.     5
    Prepared Statement of........................................    26
Statement of Mr. Sean O'Brien, General President, International 
  Brotherhood of Teamsters.......................................     6
    Prepared Statement of........................................    28
Statement of Mr. Greg Leroy, Executive Director, Good Jobs First.     8
    Prepared Statement of........................................    39
Statement of Ms. Rachel Greszler, Senior Research Fellow, 
  Institute for Economic Freedom, The Heritage Foundation........    10
    Prepared Statement of........................................    42
    Questions and Answers (Post-Hearing) from:
        Senator Lindsay O. Graham................................    72
Statement of Mr. Glenn Spencer, Senior Vice President, Employment 
  Policy Division, U.S. Chamber of Commerce......................    12
    Prepared Statement of........................................    49
Statement of Mr. Thomas Costa, Director, Education, Workforce, 
  and Income Security, Government Accountability Office (GAO)....    23
    Prepared Statement of........................................    52
    Questions and Answers (Post-Hearing) from:
        Senator Lindsay O. Graham................................    74
        Senator Alex Padilla.....................................    76


    SHOULD TAXPAYER DOLLARS GO TO COMPANIES THAT VIOLATE LABOR LAWS?

                              ----------                              - 



                         THURSDAY, MAY 5, 2022

                                       U.S. Senate,
                                   Committee on the Budget,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 11:00 a.m., via 
Webex and in Room SD-608, Dirksen Senate Office Building, Hon. 
Bernard Sanders, Chairman of the Committee, presiding.
    Present: Senators Sanders, Kaine, Van Hollen, Padilla, 
Graham, Grassley, Crapo, Braun, and Scott.
    Staff Present: Warren Gunnels, Majority Staff Director; and 
Nick Myers, Republican Staff Director.

             OPENING STATEMENT OF CHAIRMAN SANDERS

    Chairman Sanders. Okay. Let us get to work.
    Let me first thank all of our witnesses for being here, and 
we look forward to hearing your testimony. Let me thank Ranking 
Member Graham for his cooperation and that of his staff.
    And today we are going to be discussing a very important 
issue that gets much too little attention here in the halls of 
Congress or in the corporate media, and that is that in a time, 
as everybody knows, when the middle class of this country is 
struggling, when people are working longer hours for lower 
wages, when half of our people live paycheck to paycheck, when 
people cannot afford health care, they cannot afford childcare, 
they are finding it hard to fill up their gas tanks, all over 
this country there is a growing movement on the part of workers 
to try to organize and form unions, because they understand 
that if you have a union you are going to have better wages, 
better working conditions, and better benefits.
    And yet, at exactly the same time that working people are 
standing up and fighting back and are interested in joining 
unions, we are also seeing that there are hundreds of 
corporations in the United States, including some of the very 
largest, that receive Federal contracts that amount to many 
billions of dollars, they receive huge subsidies, they receive 
special tax breaks, and they receive all kinds of corporate 
welfare, despite the fact that these very same companies are 
engaging in widespread illegal behavior, including massive 
violations of labor law.
    And the question that we are asking today is a very simple 
one. Should Federal taxpayer dollars go to companies that 
violate labor law and illegally prevent workers from exercising 
their constitutional rights to join a union?
    While corporations engaging illegal activities against 
union organizing is not new, and it is widespread, this morning 
we are going to focus on one company, Amazon, who, as we speak, 
right at this moment, is engaged in massive well-funded anti-
union activity.
    As I think all of us know, just last month Amazon workers 
in Staten Island voted to form the first union at Amazon--and 
Amazon is one of the largest employers in the country, almost 1 
million workers--and this followed a union-organizing attempt 
at an Amazon warehouse in Bessemer, Alabama, and organizing a 
union in Bessemer, Alabama, ain't easy, and we thank those 
workers who are here with us today for joining us from 
Bessemer.
    From the very beginning of the union-organizing efforts 
until today, Amazon has done everything possible, legal and 
illegal, to defeat union-organizing efforts. The National Labor 
Relations Board, NLRB, found that Amazon's flagrant disregard 
of the law infringed on workers' legal rights to a free and 
fair union election in Bessemer, Alabama, ruling that Amazon's 
behavior was, quote, ``dangerous and improper.'' That is the 
National Labor Relations Board.
    To date there are currently 59 unfair labor cases against 
Amazon pending at the NLRB. Amazon is currently being sued by 
the NLRB to reinstate a worker who was illegally fired for 
organizing a union. Several current and former employees have 
alleged that Amazon has engaged in illegal harassment and 
discrimination based on race, gender, and sexual orientation.
    And that is not all. Amazon has already been penalized more 
than $75 million for breaking Federal discrimination and labor 
laws. Amazon misclassifies delivery drivers as independent 
contractors, rather than employees, to evade tax, wage, and 
benefit responsibilities. Amazon's inadequate workplace safety 
policies also pose grave risks to workers, and I hope we will 
be able to discuss that a little bit today. If you can believe 
it, and, Mr. Graham, Senator Graham, this is really rather an 
astounding fact, according to a New York Times investigation, 
Amazon has a 150 percent turnover rate--150 percent. Workers 
come into these warehouses, they are worked as hard as humanly 
possible, and then they leave, often crushed. And a whole set 
of new workers then comes in to replace them. Is that really 
the kind of business model that we should be rewarding with 
massive Federal contracts?
    Further, in some locations, Amazon's workplace injury rates 
are more than 2.5 times the industry average, and that may be 
understating the case because not all injuries are reported. 
Last December, six Amazon workers died after they were required 
to continue working during unsafe weather conditions in a 
warehouse that did not have appropriate safety facilities or 
policies.
    It is abundantly clear that time and time again Amazon has 
engaged in illegal, anti-union activity. Further, Amazon cannot 
even come to grips with the reality that the workers in Staten 
Island won their union election fair and square. In order to 
stall the process out, their lawyers have appealed that 
decision result to the NLRB. Their strategy is obvious, and I 
look forward to discussing that with our panelists. They are 
going to stall and stall and stall. In every way possible they 
are refusing to negotiate a first, fair contract with the 
Amazon Labor Union.
    So today my question to Jeff Bezos, who is the second-
wealthiest person in our country, worth about $150 billion, is 
a pretty simple one, and it really speaks to the kind of 
corporate greed and excessive greed that we are seeing right 
now in America. Mr. Bezos, you have enough money to buy a $500-
million yacht. You have got enough money to buy a $175-million 
estate in Beverly Hills and a $23-million mansion right here in 
D.C. Given all of your wealth, how much do you need? Why are 
you doing everything in your power, including breaking the law, 
to deny Amazon workers the right to join a union so that they 
can negotiate for better wages, better working conditions, and 
better benefits? How much do you need?
    And the answer is not complicated. What Mr. Bezos 
understands and what he is fighting is the reality that union 
workers in America earn about 20 percent more than non-union 
workers, on average. Mr. Bezos understands that 79 percent of 
union workers have a defined benefit pension plan, compared to 
just 17 percent of non-union workers. Mr. Bezos understands 
that union workers are half as likely to be victims of health 
and safety violations compared to non-union workers. And that 
is why Mr. Bezos and Amazon have spent over $4 million last 
year on union-busting consultants and lawyers. That is why 
Amazon is forcing workers to attend captive anti-union 
meetings. Take a group of workers--they do not have any 
choice--put them in a room, and you brainwash them with anti-
union propaganda. And that is why Amazon has fired workers 
simply because they are pro-union.
    Well, my message to Mr. Bezos is this, and that is that all 
over this country people are standing up and fighting back for 
economic justice. They are tired of seeing billionaires get 
much richer while they cannot afford health care or childcare 
or, in fact, in some cases, the ability to feed their families.
    So we say to Mr. Bezos, stop the intimidation. Stop the 
harassment. Stop the coercion. Stop the illegal behavior. Start 
treating your workers with the respect and dignity they 
deserve. They are the people who made you your billions. Give 
your workers a seat at the bargaining table. Give all of your 
workers the freedom to join a union if that is what they choose 
to do.
    In the presidential campaign, then-candidate Joe Biden 
promised, and I quote, ``to institute a multi-year Federal 
debarment for all employers who legally oppose unions,'' end of 
quote, and to, quote, ``ensure Federal contracts only go to 
employers who sign neutrality agreements, committing not to run 
anti-union campaigns,'' end of quote. That was what candidate 
Joe Biden said.
    In my view, that campaign promise was precisely right, and 
today I am reviewing my request to President Biden to fulfill 
that promise. That is what you said on the campaign trail. 
Let's do it.
    President Biden, more than any other President in my 
lifetime, has talked over and over again about being pro-union, 
and I appreciate the President's words and I believe him to be 
sincere. He is pro-union. In my view, however, the time for 
talk is over. The time for action is now. Taxpayer dollars 
should not go to companies like Amazon who repeatedly break the 
law. And we are talking about billions and billions of dollars 
in contracts.
    No government--not the Federal Government, not the state 
government, and not any city government--should be handing out 
corporate welfare to union-busters and labor law violators.
    Senator Graham.

              OPENING STATEMENT OF SENATOR GRAHAM

    Senator Graham. Thank you, Mr. Chairman. I really enjoy 
working with you but wow. This Committee is taking a very 
dangerous turn under your leadership, to be honest with you. 
You are singling out a single company because of your political 
agenda to socialize this country. Every time I turn around you 
are having a hearing about anybody that makes money is bad, the 
government needs to grow beyond our ability to pay for it, and 
we are going to have an election on your ideas here soon, and I 
cannot wait.
    As to the process, there is a process in this country. If 
you feel like the law has been violated in your efforts to 
unionize the workforce you can file a complaint, people have a 
hearing, and there is a process to debar companies who engage 
in illegal behavior. There is a process.
    This is a political process here. This is an effort to get 
an outcome you want, using the United States Senate as your 
vehicle. This is very dangerous. You can have oversight 
hearings all you like, but you have determined Amazon is a 
piece of crap company. That is your political bias. They are 
subject to the laws of the United States. They should be 
subject to this.
    If we get the Committee back, we are not going to do this. 
We are going to talk about how to save Social Security, keep 
Medicare from becoming insolvent, how to change the structural 
problems of our debt. I will talk to you about climate change, 
what happens if you electrify all the vehicles in the country. 
What does that mean for power producers? I would like to work 
with unions--I have got an uncle who was a vice president of a 
union, paper mill union--to bring jobs back into America. I 
would like to work with companies, unions, and the private 
sector to become energy independent again.
    So I am not here to demagogue the union process in this 
country. I am here to say that if you are a business you can 
have say too about your workforce. The idea that you can only 
get a government contract if you promise to be neutral is 
ridiculous.
    Boeing is in South Carolina, making the 787. There have 
been efforts to unionize Boeing. They lose. The people in that 
plant will make that decision. The idea that Boeing cannot 
argue the merits of a right-to-work environment for their 
business is ridiculous, and I think patently illegal.
    This is a heavy-handed approach, the most radical agenda in 
my lifetime, and it should be carried out at the ballot box, 
and it will be. If we take this body back, this demonization of 
individual companies that are subject to the law will cease.
    Thank you.
    Chairman Sanders. Thank you. Now we all are going to hear 
from our panelists, and I thank them very much for being here. 
We have five panelists: Mr. Christian Smalls, Mr. Sean O'Brien, 
Mr. Greg LeRoy, Ms. Rachel Greszler, Mr. Glenn Spencer.
    Let me begin with Mr. Christian Smalls. Mr. Smalls is the 
President and Founder of the Amazon Labor Union. Mr. Smalls has 
been organizing labor actions at an Amazon warehouse in Staten 
Island, known as JFK-8, since 2020. The JFK-8 warehouse voted 
in favor of unionizing with representation of the American 
Labor Union on April 1st. Mr. Smalls, thanks very much for 
being with us.

  STATEMENT OF CHRISTIAN SMALLS, PRESIDENT, AMAZON LABOR UNION

    Mr. Smalls. Thank you for having me. Well, first of all I 
want to address Mr. Graham. First off, it sounded like you were 
talking about more of the companies and the businesses in your 
speech, but you forgot that the people are the ones who make 
these companies operate. We are not protected, and the process 
for holding these companies accountable is not working for us. 
That is why we are here today. That is the reason why I am 
here, to represent the workers who make these companies go. And 
I think that it is in your best interest to realize that it is 
not a left-or-right thing. It is not a Democrat or Republican 
thing. It is a workers thing. It is a workers' issue, and we 
are the ones that are suffering in the corporations that you 
are talking about, the businesses that you are talking about, 
in the warehouses that you are talking about.
    So that is the reason why I think I was invited today, to 
speak on that behalf, and you should listen because we do 
represent your constituents as well. So just take that into 
consideration that the people are the ones that make these 
corporations go. It is not the other way around.
    As the current interim President of the Amazon Labor Union, 
who represents 8,300 workers in Staten Island, an independent 
worker-led union that won their election on April 1st, I am 
going to tell you this. We organized for over a year, and 
throughout the course of that year Amazon spent millions of 
dollars, as you mentioned, Senator Sanders, myself, including a 
few other organizers, were arrested outside for organizing, 
arrested for delivering food to their co-workers. I wanted to 
reiterate that as well.
    You know, the type of things that Amazon does, breaking the 
law, intimidation, these are real things that traumatize 
workers in this country. Thousands of workers across this 
country are in the process of organizing, who have decided to 
organize in the United States. We want to feel that we have 
protections, and we want to feel that the government is 
allowing us to use our constitutional right to organize.
    The notion that people united in this democracy will 
outmatch tyranny is the oldest American ideal. There is a 
clearly defined legal process to do this, and workers like us 
have the rights, protected by the First Amendment and the 
National Labor Relations Act. However, despite all of this, our 
victory in Staten Island was lauded as newsworthy and 
inspirational for the thousands of workers across the country, 
hundreds of thousands of workers. And even though we may have 
won, we did everything right pressuring Amazon to recognize our 
victory and comply with our legal obligation to meet us at the 
bargaining table, but Amazon is refusing to do so. As you 
mentioned, they are going to stall. They filed 25 objections, 
and they got the NLRB to move the hearing to a whole other 
location.
    To me, it just sounds like the corporations have the 
control and they control whatever they want. They break the 
law, they get away with it. They know that already, that 
breaking the law during these election campaigns will not be 
resolved during the election campaigns. So they purposely 
continue to break the law.
    For example, we filed over 40 Unfair Labor Practices (ULPs) 
in 11 months. Most of them, quite a few of them got merit for 
the action. Some of them even got injunctions. For example, 
Gerald Bryson, who was fired two years ago, finally, over two 
years later, there is a 10(j) in motion for his reinstatement.
    Another prime example, Daequan Smith, was fired by the 
company for organizing. He is still out of a job. He is living 
in a shelter right now. We raised money through GoFundMe. These 
are just a few examples, including myself, who has been out of 
a job for the last two years.
    I want to just end off by saying this. We need to pass the 
Protecting the Right to Organize Act (PRO Act) so that workers 
are protected and workers are encouraged to organize. And if 
that does not work, you know, I am going to let you know right 
now that on behalf of the Amazon Labor Union and the hundreds 
of thousands of workers across this country, that we will 
continue to organize. And once again I want to remind you that 
this is not a left or right thing. This is a working-class 
issue, and the workers at the bottom are the ones who make 
these corporations go.
    Thank you.
    [The prepared statement of Mr. Smalls appears on page 26]
    Chairman Sanders. Mr. Smalls, thank you very much.
    Our next panelist is Sean O'Brien. Mr. O'Brien is a fourth-
generation Teamster and the General President of the 
International Brotherhood of Teamsters, one of the largest 
unions in this country, with some 1.4 million members.
    Mr. O'Brien was the youngest person elected as President of 
Teamsters Local Union 25, a position for which he was reelected 
six times. He was sworn in as the 11th General President of the 
Teamsters this March. Mr. O'Brien, thanks so much for being 
with us.

  STATEMENT OF SEAN O'BRIEN, GENERAL PRESIDENT, INTERNATIONAL 
                    BROTHERHOOD OF TEAMSTERS

    Mr. O'Brien. Thank you very much. Good morning Mr. Chairman 
and members of the Committee. My name is Sean O'Brien. I am the 
General President of the International Brotherhood of 
Teamsters. Thank you for the opportunity to appear before you 
today to discuss Amazon, its labor and business practices, and 
its relationship with the Federal Government.
    To put it plainly, it is wrong for our government to be 
giving taxpayer dollars in the form of Federal contracts to 
companies like Amazon. You are rewarding employers who 
repeatedly, knowingly, and purposefully violate Federal labor 
laws, drive down wages and standards in core Teamster 
industries, and create dangerous working conditions.
    To be clear, President Joe Biden is the most pro-union 
President of our lifetime, and the Teamsters Union applauds his 
Administration's actions on issues of great concern to working 
families.
    We proudly support President Biden's Executive orders on 
pay equity and $15-an-hour minimum wage requirements for 
Federal contractors, and the recommendation for Federal 
procurement included in the White House Task Force on Working 
Organizing and Empowerment will support and encourage 
responsible, high-road employers. But as Chairman Sanders has 
said, we have the power to completely stop companies that break 
labor law from receiving Federal contracts, so why are we not 
doing it?
    As we already know, Amazon is a habitual lawbreaker. The 
company was found guilty last year of illegally firing two 
workers after they advocated on behalf of their coworkers at an 
Amazon warehouse. Amazon broke labor law in Alabama when 
workers tried to organize, forcing their election to be rerun 
this year. In December, the NLRB cited Amazon for illegally 
threatening, surveilling, and interrogating workers who were 
trying to start a union at the Staten Island facility.
    These kinds of actions make something very clear. When 
workers try to organize, Amazon breaks the law. When workers 
raise their voices, Amazon does whatever it takes to shut them 
up, because Amazon is terrified of the power workers have when 
they act collectively.
    Sadly, while Amazon acts with impunity to break the law, 
our government recently saw fit to award the company a $10 
billion Federal contract for cloud computing services. While 
our government was spending taxpayer dollars on Amazon Web 
Services, the company reportedly spent $20,000 per week on 
union-busting consultants in Staten Island alone.
    What is more alarming is we know that these numbers barely 
scratch the surface of what Amazon spends to prevent workers 
from having any voice whatsoever on the job. Americans have the 
fundamental right to join a union together and bargain 
collectively over the terms of their employment.
    The Federal Government, under the National Labor Relations 
Act, has a mandate to encourage worker organizing and 
collective bargaining and to promote equality of bargaining 
power between employers and employees. As President Biden's 
Executive order on Worker Organizing and Empowerment boldly 
states. But our government ignores that mandate with every 
dollar that it puts into the pockets of Jeff Bezos and his 
organized crime syndicate known as Amazon. Why are elected 
officials giving taxpayer money to a company that is willing to 
use any available means--illegal or not illegal--to deny 
workers their federally protected right? Why are we supporting 
the growth of a company that is destroying good middle-class 
jobs, creating unsafe working conditions, and assuming no 
responsibility for much of its workforce?
    As a Teamster, I have faced countless union-busting 
companies. As a proud Bostonian from a tough neighborhood, I 
have confronted my fair share of schoolyard bullies too. Let me 
tell you, you do not take a beating from a bully, then fill his 
pockets with money and expect fewer beatings. Amazon has been 
beating up on American workers for too long, and our government 
has been letting them do it, and it needs to stop.
    Amazon relies on an exploitive business model that is 
simply brutal for workers. The company's punishing pace of work 
results in worker injury rates that are nearly twice as high as 
that of all other non-Amazon warehouse facilities. Amazon 
employees are seriously injured at rates nearly 80 percent 
higher than the rest of the entire warehouse industry. Amazon 
accounts for all warehouse worker injuries, yet the company 
only employs a third of all workers nationwide. Why is our 
government rewarding this behavior? Why are we not doing more 
to actually protect American families?
    As the General President of the Teamsters' Union, a union 
that represents more than 1.2 million working people, I have 
been traveling the country a lot this year, spending time with 
workers face-to-face, and I will tell you this: working people 
of all parties are losing faith in our government.
    It feels like big business is the only thing our government 
cares about. What happened to ``We the People''? Billionaires 
pay little to no taxes and then they are handed billions more 
by our government after they break the law. When our government 
turns a blind eye to Amazon's lethal and illegal practices, it 
feels like the system is rigged against everyone but the rich 
and powerful.
    But working people are not stupid. We see what is going on 
here. It is long past time for the pendulum to swing back to 
the side of hard-working families in this country. To this 
Committee and to the entire Federal Government, do your duty to 
protect American workers. We are watching, we are listening, 
and we are voting. Tell Amazon that enough is enough, and then 
show them you mean business. Do not give this company, or any 
employer, another penny until the labor laws of this land are 
truly upheld and workers' voices are finally heard.
    Thank you very much.
    [The prepared statement of Mr. O'Brien appears on page 28]
    Chairman Sanders. Thank you very much, Mr. O'Brien.
    Our next panelist is Mr. Greg LeRoy. He is the Executive 
Director of Good Jobs First, which he founded in 1998. Good 
Jobs First is a national policy resource center for grassroots 
groups and public officials promoting corporate and government 
accountability.
    Mr. LeRoy, thanks a lot for being with us.

  STATEMENT OF GREG LeROY, EXECUTIVE DIRECTOR, GOOD JOBS FIRST

    Mr. LeRoy. Thank you, Mr. Chairman, and Committee members 
for the opportunity to be here. My name is Greg LeRoy and I 
direct Good Jobs First, a nonprofit, nonpartisan research 
center on economic development incentives and corporate 
accountability.
    We believe that companies which receive government economic 
development subsidies or procurement contracts should be held 
to the highest standards of corporate ethics. Government money 
should not keep going to any company that violates laws, rules, 
or regulations intended to protect workers, consumers, free 
markets, or the environment. Otherwise, public dollars are 
subsidizing corporate behavior that is at odds with the policy 
objectives of economic development and ethical procurement.
    Amazon.com is perhaps the most aggressive company in 
America today seeking economic development subsidies. Since 
2012, when it opened its Economic Development Office, it has 
been averaging almost 20 state and local subsidy awards per 
year, for data centers, warehouses, office buildings, and its 
various subsidiaries. They now total almost $4.2 billion. Last 
year alone, Amazon pulled down 20 deals worth at least $700 
million.
    These understate the rate of subsidization. Some of the 
subsidies are not fully disclosed. For example, sales, 
property, or utility tax exemptions granted to some of their 
data centers are incompletely or wholly undisclosed in some 
states.
    According to the Wall Street Journal in 2017, the top 
management team gave the economic development team at Amazon a 
goal of extracting $1 billion per year in subsidies.
    It is also very aggressive seeking government procurement 
contracts, especially for its profitable cloud-computing 
division, Amazon Web Services (AWS). In 2013, AWS was awarded a 
contract by the Central Intelligence Agency worth up to $600 
million over 10 years. It was later, in 2020, along with four 
other companies, awarded a new cloud computing contact for the 
intelligence community reportedly worth tens of billions of 
dollars over multiple years, and now recently the new NSA award 
for $10 billion for the NSA Hybrid Compute Initiative.
    Less well known than these high-profile Federal contracts 
is Amazon's push into local and state procurement. It began 
that push in 2016, and now claims to sell to 90 of the biggest 
cities and counties in the United States, and 45 state 
governments buy at least once a month from them. It is one of 
the two fastest-growing segments in the company's sales, the 
company wrote last year.
    So it is clear that public economic development and 
procurement dollars are deeply baked into Amazon's business 
model.
    Given that fact, we believe that Amazon should be held to 
the highest ethical standards of conduct, and if it fails to 
meet those standards it should be disqualified from both 
government contracts and development subsidies.
    In addition to the company's widely reported Unfair Labor 
Practices that my fellow panelists have already discussed, 
Amazon or its subsidiaries have been penalized scores of times 
by Federal or state regulatory agencies or as a result of 
private litigation on workplace issues, such as wage and hour 
violations. Five wage and hour cases totaling almost $82 
million include a Federal Trade Commission penalty--and I am 
quoting the Commission now--saying, ``a final administrative 
consent order against Amazon, which agreed to pay more than 
$61.7 million to settle charges that it failed to pay Amazon 
Flex drivers the full amount of tips they received from Amazon 
customers over a two-and-a-half-year period.''
    Amazon entities have been penalized dozens of times by the 
Federal Aviation Administration for air safety violations and 
more than 20 times by the Occupational Safety and Health 
Administration, or OSHA, for workplace safety violations.
    When a company violates workers' rights to freely organize 
a union that contradicts a fundamental idea within economic 
development and public procurement, that idea being that public 
dollars should always serve to raise living standards and 
reduce inequality, never to suppress wages or suppress benefits 
and thereby exacerbate inequality. Otherwise, why would we 
collectively favor a company with subsidies or contracts? Why 
would we pay a company to make inequality worse?
    Corporate recidivism is a longstanding problem in the 
United States, and many have observed that it continues because 
penalties are not stiff enough, especially personal penalties 
for top executives. We at Good Jobs First submit that losing 
government contracts and subsidies might get the attention of a 
company like Amazon that is so wed to public dollars.
    Thank you.
    [The prepared statement of Mr. LeRoy appears on page 39]
    Chairman Sanders. Thank you very much, Mr. LeRoy.
    Our next panelist is Ms. Rachel Greszler, who is a Senior 
Research Fellow with the Institute for Economic Freedom at The 
Heritage Foundation. Ms. Greszler's work focuses on retirement 
and labor policies such as Social Security, disability 
insurance, pensions, and worker compensation.
    Ms. Greszler, thanks very much for being with us.

STATEMENT OF RACHEL GRESZLER, SENIOR RESEARCH FELLOW, INSTITUTE 
         FOR ECONOMIC FREEDOM, THE HERITAGE FOUNDATION

    Ms. Greszler. Chairman Sanders, Ranking Member Graham, and 
members of the Committee, thank you for the opportunity to be 
here today.
    Regarding the question of taxpayer dollars going to 
companies that violate U.S. labor laws, the Federal contracting 
process is not an appropriate or effective way to address the 
apparent concerns. It would do far more harm to taxpayers and 
strip Americans of vital services, including health care and 
national security, than it would to penalize the targeted 
companies. Moreover, a Federal judge issued an injunction 
against a similar Obama order in 2016, and Congress already 
struck down individual agencies' similar blacklisting rules in 
2017.
    A more relevant question for the Budget Committee, given 
the $30 trillion Federal debt, reckless spending, high 
inflation, and an unprecedented labor shortage is how can 
policymakers promote a better-functioning labor market with 
more people working and with real incomes rising instead of 
falling? To that end I would like to briefly consider the 
current labor market conditions and evaluate two different 
labor policy approaches.
    Today's labor market is unlike any before in history. 
Massive government spending, financed by the Fed's printing of 
money, has artificially increased demand while other government 
policies have discouraged work. That has contributed to a 
record high 11.5 million job openings. There are almost two 
jobs available for every unemployed worker.
    Employers are responding to the labor shortage by providing 
greater flexibility, expanded benefits, including a 64 percent 
increase in workers with access to paid family leave, and also 
higher pay. In March alone, 49 percent of employers reported 
that they increased compensation.
    But despite the fact that average earnings are up $3,300 
over the past year, the average worker is $1,600 poorer after 
inflation. The problem is that when employers are forced to 
raise compensation without workers actually producing more they 
have to raise their prices, and that adds to the inflationary 
cycle.
    Similarly, unions' use of muscle as opposed to merit-based 
compensation increases, leads to higher prices and fewer jobs. 
Policies like protecting the Right to Organize Act that 
prioritized union membership over workers' desires would add to 
inflation, fail to meet many workers' needs, and ultimately 
lead to a smaller labor force and lower incomes. Under the PRO 
Act, workers could lose a lot, including their right to a 
secret ballot union election, the privacy of their personal 
information, the choice of joining a union and paying union 
dues, the ability to be their own boss, and the opportunity to 
own a franchise business.
    Most troubling to me, as a mother of six young children, is 
the PRO Act's attack on independent workers. Fifty-nine million 
Americans participated in independent or freelance work this 
year. During the pandemic it was a lifeline to many, including 
12 percent of the entire workforce that started freelancing in 
2020.
    Independent work is growing because people want it. They 
report greater work-life balance, less stress, better health, 
and the same or higher incomes. For many people, it is 
independent work or no work. Half of those who freelance say 
they do it because they cannot work for a traditional employer. 
Closing off opportunities for people to work in the way that 
they want and need may increase union dues but it will not help 
workers and it will not help the economy grow.
    Instead of attempting to recreate the workplace of 
yesteryear, dominated by unions, manufacturing, and men, 
Congress should modernize labor laws. First, policymakers 
should protect flexible and autonomous work by clarifying in 
law that people who control their own work can be independent 
contractors.
    Congress should also protect the franchising model by 
codifying the longstanding precedent that franchise owners are 
their workers' sole employer. The Employee Rights Act includes 
these two important provisions, along with other important 
worker-first policies like privacy protections, secret ballot 
union elections, and the right to earn a raise.
    Congress could alleviate worker and union clashes by 
respecting both parties' rights to choose. That is, by ending 
forced unionization and also ending exclusive representation so 
that workers are not forced to join unions and unions are not 
forced to represent workers that do not join them.
    Finally, policymakers should help expand lower costs and 
more effective education alternatives by reducing higher 
education subsidies and allowing things like industry-
recognized apprenticeship programs that have proven effective 
at helping workers.
    The future of work requires an agile and expanding 
workforce, not a one-size-fits-all model, so lawmakers' goals 
should be to allow more people to gain the skills they need, to 
work in the jobs they want, to choose the employment 
arrangements that work best for them, and to earn rising 
incomes that allow them to pay for what they want and to pursue 
what they desire.
    Thank you.
    [The prepared statement of Ms. Greszler appears on page 42]
    Chairman Sanders. Thank you.
    Our last panelist we will be hearing from virtually, and 
that is Mr. Glenn Spencer, who is the Senior Vice President of 
the Employment Policy Division at the U.S. Chamber of Commerce. 
In this role he oversees the Chamber's work on traditional 
labor relations, wage hour and worker safety issues, and state 
labor and employment law, among other issues.
    Mr. Spencer, thanks very much for being with us.

 STATEMENT OF GLENN SPENCER, SENIOR VICE PRESIDENT, EMPLOYMENT 
           POLICY DIVISION, U.S. CHAMBER OF COMMERCE

    Mr. Spencer. Chairman Sanders, Ranking Member Graham, and 
members of the Committee, I appreciate the opportunity to speak 
to you today.
    The U.S. Chamber of Commerce directly represents 300,000 
businesses and represents approximately 3 million more through 
our federation partners. These businesses take seriously their 
obligations to follow all laws, including those involving labor 
and employment matters. These businesses devote considerable 
time, talent, and resources towards achieving compliance.
    The unfortunate truth, however, is that some laws are less 
than clear and can be extremely complex. The same applies to 
regulations implementing those laws. In addition, these laws 
and regulations sometimes overlap, and there are additional 
laws and regulations at the state level. Take, for example, 
independent contracting. There are multiple standards just at 
the Federal level. The IRS, the Department of Labor, and the 
National Labor Relations Board all use different tests. In 
addition, there are state tests, and some states use separate 
tests for wage and hour, workers compensation, and unemployment 
insurance. The result is a confusing patchwork of laws and 
regulations that can be challenging to understand.
    This type of complexity, which occurs across numerous 
areas, is why we see so much litigation around labor and 
employment issues. Two people can look at the same factual 
situation and draw two different conclusions about whether a 
particular workplace policy is compliant. This is why it is 
important not to jump to conclusions about whether a company 
has actually violated the law. Upon further review by agency 
officials or a court, allegations can be found to be without 
merit.
    All of this leads to the question of whether an additional 
penalty structure for contractors, up to and including 
debarment, is an appropriate policy. As a general matter, 
Congress has concluded that it is not. Statutes like the 
National Labor Relations Act, for example, articulate a 
specific penalty structure that does not include restrictions 
on contracting, or debarment.
    Moreover, Congress has declined to pass numerous proposals 
to amend the penalties in the NLRA, including labor law reform 
legislation in 1978, the Employee Free Choice Act, and most 
recently the Protecting the Right to Organize Act.
    Where Congress has affirmatively spoken on the question of 
contracting and additional penalties it has rejected that 
concept. In 2017, Congress used the Congressional Review Act to 
overturn the so-called Fair Pay and Safe Workplaces regulation, 
which sought, in part, to require contractors to report 
violations of labor and employment laws to their contracting 
agencies with the ultimate threat of the loss of Federal 
contracts as a penalty.
    While there are undoubtedly many reasons Congress has 
chosen this course of action, one factor might be that while 
many businesses participate in Federal contractor--by some 
estimates as many as 25 percent of employers--these businesses 
specialize in different services. Preventing a company from 
participating in Federal contracting would limit the ability of 
the Federal Government to seek out the most efficient and 
effective provider of a particular service. In some cases that 
service might not be available at all. For example, some 
national defense products are produced by just one lead 
supplier, an issue of particular salience as we look at our 
policy in Ukraine.
    Administrations of both parties have often used the Federal 
contracting process to impose policies that they could not get 
through Congress. For example, the Biden administration 
required contractors to pay a minimum wage of $15 per hour. The 
Trump administration attempted to block contractors from 
certain types of diversity training. The Obama administration 
required contractors to provide paid leave. And the Bush 
administration required contractors to post notices about union 
rights.
    Without commenting on the wisdom of any of these policies, 
the unifying theme is that these were issues that did not 
receive congressional approval. The justification claimed was 
the authority of the Federal Property and Administrative 
Services Act. However, courts are starting to question the 
limits of that law, with cases in numerous courts of appeals. 
So as the Committee contemplates the question of restrictions 
on contracting or debarment as an enhanced penalty, it should 
be mindful of those limits.
    One additional challenge confronts the idea of imposing 
such enhanced penalties via regulation, and that is the very 
CRA resolution that was passed in 2017. Under the CRA, a rule 
that is struck down ``may not be reissued in substantially the 
same form.'' This is a significant barrier.
    In conclusion, Congress has enacted numerous labor and 
employment statutes. Each of those statutes contains specific 
penalty provisions. If the consensus in Congress is to change 
those penalty structures, Congress is free to do so. However, 
attempts to do so administratively are likely to run into the 
barrier of the CRA, and may also face greater scrutiny by the 
courts.
    Again, thank you for the opportunity to speak to the 
Committee today.
    [The prepared statement of Mr. Spencer appears on page 49]
    Chairman Sanders. Mr. Spencer, thank you very much.
    Let me begin my questioning by responding briefly to 
Senator Graham. I think he suggested that a hearing like this 
is radical. And you know what? I think he is right. In a 
Congress dominated by corporate lobbyists and wealthy campaign 
contributors, the idea that we would actually hear from the 
working class of this country is, in fact, radical, but I make 
no apologies for that.
    Let's begin with Mr. Smalls. Mr. Smalls, if you could, 
describe a little bit about the pressures that exist at Amazon 
when workers have decided that they want to form a union.
    Mr. Smalls. Absolutely. Well, for one, let me first just 
describe what the environment is. These buildings are 14 NFL 
football fields, a million square feet, some of them over a 
million square feet. Staten Island, for example, JFK, these 
workers are commuting from all five boroughs, and New Jersey as 
well, so their commute could be anywhere between 2\1/2\ to 3 
hours each way, not including their 10- to 12-hour shift if 
they are full-time. Only subjected to a 30-minute lunch period 
and two 15-minute breaks. If you work 12 hours you get 45 
minutes and two 15-minute breaks.
    So just think about that by itself, just working under 
those conditions as well as enduring union-busting, which 
Amazon flies in hundreds of union-busters from all over the 
country, pretty much all over the world. There are some now 
coming from overseas as well.
    They come into the facility and they isolate workers every 
single day to question them, pretty much gaslighting them, 
acting like they are working to improve the conditions but 
really are just polling to see who is pro-union and who is not. 
They report that information back to management. They have 
captive audiences every single day. For example, at JFK, they 
did them every 20 minutes. They brought in classrooms the size 
of 50 to 60 workers, drilled anti-union propaganda into their 
heads for nearly an hour, and they did this four times a week. 
Every single day workers come in, they go right to a captive 
audience.
    So imagine being a new hire at Amazon. Your second day, you 
do not even know your job assignment, and the first thing they 
do is march you into an anti-union propaganda class.
    Other examples are they post and plaster the building with 
anti-union propaganda. You walk in and the first thing you see 
is ``vote no.'' You walk in and the first thing you see is 
union dues coming out of your check, they calculate union dues 
without even knowing how a union operates. They pretty much 
spread rumors and lies about the union members, trying to claim 
that this independent worker-led union that are all Amazon 
workers are some third party. The lied and said that the union 
dues, the money is going to go towards my financial gain. 
Pretty much the demonized myself as the union representative, 
saying that I have a vendetta because I was fired two years 
ago, wrongfully.
    Other things that they do, they use the police to 
intimidate the workers. There was a large presence in Bessemer. 
I remember when I went down there for the first campaign they 
had police at every entrance. The same thing in Staten Island. 
They used the police at all our demonstrations. Myself and two 
other organizers were arrested, not once but twice, and we are 
still sitting here, as we speak, on papers because of that.
    Chairman Sanders. Senator Graham, I am going to take an 
extra two minutes, and I will give you an equal amount of time.
    Let me ask President O'Brien. Do non-union companies that 
pay workers low wages with no benefits and repeatedly break the 
law and have an unfair advantage when they compete for Federal 
contracts and subsidies with companies that obey the law and 
have a union contract?
    Mr. O'Brien. The answer to that question, Mr. Chairman, is 
absolutely. You know, we represent 1.2 million working people 
in various industries. We have a similar company under contract 
that has a 70-year history with the Teamsters Union, that does 
and has a proven model of what it is to work for a unionized 
workforce and still remain very profitable and very successful. 
Those jobs are 67 percent at UPS, part-time jobs, which provide 
full-time benefits--full-time health care and full-time pension 
contributions.
    But more importantly, it provides a means to an end. Unlike 
Amazon, when you go to work and they have a 150 percent 
turnover, that is criminal. When you go to work at UPS, as a 
part-timer, you know that at some point in time you have a 
means to an end for a full-time career, delivering packages and 
parcels.
    And, you know, I think the one thing that is getting lost 
in this whole testimony is we are talking, and we are all 
entitled to our opinions, and that is the beauty about being an 
American, but we do have a proven model that worked. It worked 
through the toughest economic time when there were no 
vaccinations but people needed goods and services delivered. 
Our Teamster members, whether it was at UPS, whether it was in 
the freight division, whether it was picking up rubbish or 
stocking and delivering essential groceries to people, we 
proved our worth. We proved our value. And, you know, Amazon 
workers should have that same ability and/or any workforce that 
is being taken advantage of or retaliated for their beliefs.
    Now as far as a competitive advantage, when employers use a 
subcontracting or an independent contractor model they are not 
paying benefits. They are not paying retirement. They may be 
skirting the laws as far as wage and hour violations go. They 
have a significant competitive advantage with a service that is 
awful. If you go to any neighborhood right now and you talk to 
an Amazon subcontractor or, as I think was referred to by one 
of my panelists as an opportunity to be their own boss, that is 
the furthest from the truth. They have to buy the vehicle or 
lease the vehicle from Amazon. They have to wear the uniform 
that Amazon says. They have to follow policies and procedure. 
It sounds like not being their own boss to me.
    Look, in any event we need this. We need the PRO Act. We 
need America to do the right thing. If someone does something 
wrong in their neighborhood they are held accountable. Amazon 
needs to be held accountable, and how you hold people 
accountable is taking back some of these contractors until they 
are a responsible employer.
    Chairman Sanders. Thank you very much. Senator Graham.
    Senator Graham. Thank you. One way you should not hold 
people accountable is have a hearing where you make 
accusations. There is a legal system. You reach conclusions and 
you want a result that I think would do a lot of damage to the 
country. That is what is radical here, is we have taken a 
single company, you have brought people making accusations. 
There is a legal system in this country to complain about 
unfair labor practices.
    But what you have done here today is you have tried and 
convicted Amazon. You have taken anecdotal testimony and said 
Amazon is the worst offender on the planet, of the workplace. 
All I can say is that Mr. Smalls, had you filed a complaint 
when you thought you were wronged?
    Mr. Smalls. Have I?
    Senator Graham. Yes.
    Mr. Smalls. The Attorney General of the State of New York 
has on my behalf.
    Senator Graham. Okay. But you had a process where somebody 
could advocate for your interest.
    Mr. Smalls. There is a process that is not working.
    Senator Graham. Okay. Well, that is your opinion.
    Mr. Smalls. It is a fact.
    Senator Graham. Now let me ask you this. Do you believe 
that if you are in a workplace you should be required to join a 
union?
    Mr. Smalls. I believe that we should have the right to 
choose to join a union.
    Senator Graham. Okay. So you would agree with me that if 
you did not want to join a union you should not be made to do 
so.
    Mr. Smalls. Who is making them do that?
    Senator Graham. The PRO Act. You have to pay union dues 
whether you agree to it or not.
    Mr. Smalls. I do not believe that is correct. I think the 
PRO Act is giving----
    Senator Graham. Ms. Greszler, is that correct?
    Mr. Smalls [continuing]. Assuming you could do that.
    Ms. Greszler. Yes. That is precisely what the PRO Act does 
is that as a condition of being employed at a company you have 
to pay union dues.
    Senator Graham. So this is a good deal for the unions, 
right?
    Mr. O'Brien, do you support the idea that if you receive a 
government contract as a company you must sign a statement of 
neutrality regarding unionization?
    Mr. O'Brien. I definitely believe in that, sir.
    Senator Graham. Yeah, well I do not.
    Mr. O'Brien. If that is your opinion, that is great.
    Senator Graham. And let me tell you why I do not. Because 
that means if you are Boeing in South Carolina and you want to 
do business with the military you cannot give the other side of 
the story why unionization may hurt productivity and is not the 
best way for the worker.
    So unionization efforts in this country have gone from 11.9 
percent to 10.3 percent, of the private sector workforce, 
including government employees, I think, maybe non-government 
employees, are down to 6.1 percent. Maybe people are listening 
to what you are having to say and want to go a different way. 
Maybe they do not want to pay dues to a union because they work 
at the site that has been unionized. Maybe people are making a 
different choice. The number of people joining a union in this 
country is going way down. Is it due to the abusive behavior of 
all the companies or is maybe people want to make an individual 
choice?
    I had an uncle who was in a paper mill union. I love him 
dearly. I understand the union argument, and let people listen 
to it. I just want the employer to be able to give the other 
side of the story.
    Ms. Greszler, in your view, this idea of requiring 
companies to sign a neutrality agreement to do business with 
America, what would that lead to?
    Ms. Greszler. Well I think that is actually unfair to 
workers. Companies are required to notify workers of things 
that are important to them in their workplace, and what we are 
doing here is preventing workers from having that right to know 
something that is significant for the future of their work.
    Senator Graham. This is not about righting wrongs, because 
there is a system to do that. This is about getting an outcome 
you want. There was a Staten Island vote Monday where the union 
effort was rejected 62 to 38. If you believe this panel, the 62 
percent of the people are crazy. They do not know what they are 
doing. They were intimidated, and maybe they just made a 
different choice.
    Chairman Sanders. Thank you. Senator Kaine.
    Senator Kaine. Thanks, Mr. Chairman. Thanks to all of you. 
Very, very interesting testimony.
    I said at a hearing, Mr. Chair, I think about two weeks ago 
here, that maybe I am not fit for this line of work because I 
was born with a paintbox that has no broad brushes in it. And 
so, I mean, I will start with you, Mr. President.
    I do not challenge some of the facts that my Chairman laid 
out, or that you have laid out, and I think some compelling 
stories, but I do not think Amazon is an organized criminal 
syndicate.
    Mr. O'Brien. It definitely is the way they treat their 
workers, sir, with all due respect.
    Senator Kaine. Yeah. Yeah. So I know that is your opinion 
and you are as sincere in stating that as I am in saying that I 
think that is a vast overstatement.
    Amazon employs a million Americans. Not everyone hates 
their jobs at Amazon. Thousands of them work in Virginia, and 
not everyone hates their job at Amazon. Amazon is going to open 
a huge headquarters in Northern Virginia that was going to have 
25,000 employees, but after New York said ``we do not want 
you'' it is going to be 35,000 employees in Northern Virginia, 
and Virginians are very excited about it. It is in probably the 
bluest part of Virginia and the County Board of Supervisors 
there is thrilled to have Amazon.
    Mr. Smalls, I agree with you. I do not care one whit about 
Jeff Bezos. I think the workers make Amazon go, and the 
customers, the customers that use Amazon, they use it because 
they think it is convenient. And during the pandemic, when they 
were at home and they did not want to go to some places because 
they were worried about their health, Amazon usage went up. We 
cannot wave a magic wand and make customers suddenly not like 
Amazon.
    So I would say I just do not see it. All the facts that 
have been laid on the table are facts that I am now going to 
dig into with some of the others on the panel. But I think you 
have to acknowledge, a million employees and customers that 
find Amazon to be somebody good they want to work with, that 
is, at least, also a fact that has to be put on the table.
    My view is coming from the way I come from. I come from a 
very pro-labor household, and I am a PRO Act supporter, and I 
am going to talk about why. My dad was management. He ran an 
ironworking shop that was organized by the ironworkers, and we 
all grew up working with union ironworkers in my family. It was 
my dad and my mother and my two brothers and me, and in a good 
year, five employees and in a great year, seven employees. My 
dad was on the ironworker pension fund as the management 
representative, and he just taught us, growing up, unions and 
management should not be fighting. It should be a team.
    And I hope we would want to be a team without owners 
kicking workers around and without employers being demonized. I 
mean, Democrats, if we want to love jobs, we have got to also 
work with those that are building companies that create jobs.
    Now I want to get over on why I am a PRO Act supporter 
because I think, Ms. Greszler, you said a couple of things that 
I do not think are true. You said the PRO Act gets rid of the 
secret ballot. No it does not. It strengthens the secret 
ballot. There were earlier bills in Congress that got rid of 
secret ballot, like the Employee Free Choice ACT (EFCA).
    But what the PRO Act does is it requires a secret ballot if 
the employer wants it. If the employer does not want to accept 
cards at more than 50 percent the employer can require a secret 
ballot, and there will be a secret ballot. Unless the employer 
conducts such unfair labor practices during the election, then 
the NLRB can order that that showing of a majority of the 
workforce wants a union will go into effect. I think that 
solidifies secret ballot.
    The other thing the PRO Act does on secret ballot is this: 
under current law, employers can decertify a union without a 
ballot. If they feel like they have evidence that there is no 
longer majority support, an employer can decertify a union. The 
PRO Act says you cannot decertify a union without a secret 
ballot.
    So I have heard you and others come up here and say, oh, 
the PRO Act gets rid of secret ballot. I think that is just a 
flat-out misstatement. I have heard it made over and over 
again. It does not. It actually strengthens secret ballot.
    Mr. Smalls said he thinks people should have the choice 
about a union. You should have a choice to vote for a union or 
not. And if a majority votes for the union, the law has been, 
for decades, that the union then has to represent the entire 
bargaining unit.
    The PRO Act does not require that you join the union if 
there has been a successful election. It does require that you 
make some payment to the union for that representation so that 
you are not a free rider. If the union is obligated to bargain 
for somebody whether they join the union or not, get them 
benefits, get them health care, get them pensions, why should 
they be able to get that for free? If we are going to respect 
the democracy of a vote for a union then you are going to get 
some benefit from it. What is your right to just be like a free 
rider on that?
    The other thing about the PRO Act that really convinced me, 
Mr. Chair, and this goes to Mr. Smalls' testimony about them 
waiting you out. We have a National Labor Relations Act that 
says, okay, you have got to have a campaign and have an 
election. So if the union wins the election, should there not 
be a contract? I mean, it would see if the union wins the 
election, should there not be a contract?
    Well the average number of days it takes after the union 
wins an election--and they do not always win--but after the 
union wins an election the average number of days to get to a 
contract is 409 days, and about a third of victorious unions 
cannot get a contract in the first three years because the 
employer just stonewalls.
    So what the PRO Act does is it requires that after a 
successful union election, after there has been a democratic 
determination by the workers that they want a union, that you 
have to produce a contract within a certain period of time and 
if you do not it goes to arbitration, that seems completely 
fair to me. Otherwise, you are not respecting the democratic 
desire of workers for a union.
    The Chairman did a nice thing. He came down to Virginia to 
celebrate five Richmond Starbucks, that recently unionized. I 
was out with the Starbucks employees during that time. And 
another one, Mr. Chair, in Farmville, just unionized a couple 
of days ago. And I strongly supported their right. If you want 
a union--I am not telling you what you should want, but if you 
want a union, you should have it. And once they voted to have a 
union, they should be entitled to have it and get a contract 
within a reasonable period of time.
    I just hope, you know, we can--I do not know. Maybe I am 
naive thinking that the world can work the way it did in my 
dad's ironworking shop, you know, and that if workers vote for 
a union that they would not be kicked around, they would not be 
harassed, they would not be fired, they would not be 
stonewalled. But we get to the business of creating a working 
relationship that is a productive one for everyone.
    The last thing I will say, and Mr. Chair has heard me say 
this before. My dad used to always tell us, ``Listen, my 
business acumen is going to put all my workers' kids into 
career programs, union programs, or colleges, but you boys''--
my brothers and me--``you guys need to remember that the 
artistry of these ironworkers is going to put all you guys 
through college.''
    I just hope we might have an economy that people view 
themselves as on the same team.
    Thank you, Mr. Chairman.
    Chairman Sanders. Senator Kaine, thank you. Senator Braun.
    Senator Braun. Thank you, Mr. Chairman.
    Senator Kaine, I do not think you are naive. I think that I 
came here today knowing that there would not be many of us 
here, number one. Coming from Main Street where 37 years prior 
to becoming a Senator I ran a business, and you do not have 
high turnover if you have high wages. You do not have accidents 
at your business that are way out of norm if you run it like 
your own family is working there. If you are conscientious for 
your employees it is kind of a moot point, and sooner or later 
it works itself out.
    I had 15 employees for 17 years. Lucky, finally, that it 
scaled into a larger business. Lived with low overhead, 
hardscrabble. All along the way--and I mentioned it about 
eight, nine years ago when I was awarded an entrepreneur's 
recognition, and mentioned at that get-together that high wages 
and good benefits should be the hallmark of running a business, 
growing it, and return on investment. I saw some kind of 
reaction out in the crowd, which would have been mostly Chamber 
of Commerce, other entrepreneurs.
    But if you do it, you know, a union is probably not going 
to be necessary, but when you look at concentration in 
industries, you look at Amazon itself. They have actually 
created a new mousetrap that will have its own reconciliation 
in terms of where that can be scalable. It is not going to be 
scalable ultimately if you have 150 percent turnover rates or 
if you have accident rates way above the norm.
    So do we resolve it here? Do we put regulations in place? 
Sometimes you have got to. But I do believe the system, in the 
long run, will take care of itself. And when you have got big 
concentration in industries you are going to get folks like me, 
from the entrepreneurial business side, that do not like it. 
Most of us do not have lobbyists. Most of us do not business 
partner with the Federal Government like large companies do. So 
you have got to be careful that you do not stereotype I think 
what has made this country great, which would be mostly Main 
Street entrepreneurs, many small businesses, where they are as 
blue-collar as a blue-collar job would be working for a larger 
company because they make their earnings out of those 
businesses.
    So when you get in situations where it is egregious, sooner 
or later you will be held accountable. Standard Oil did. The 
telephone business did.
    I have been railing, along with the Chair here, about the 
health care industry. It costs too much. Everybody in this day 
and age ought to be entitled to health care that you have got 
access to, whether it is provided by an employer--some have to 
turn to government--that does not cost you twice as much, in 
some cases, as what it does in other countries. That is why you 
have hearings like this.
    All of this has to blend together. It does not necessarily 
have to be mandated by government. But when somebody does get 
out of line, when wealth gets too concentrated, when you have 
got 150 percent turnover rates, high accident rates you are 
going to have to have a medium to vent your grievances, and 
unions, vis-a-vis large companies, probably the only way you 
can do it.
    I have always been a believer that you can organize, but 
you can never let something get out of hand to where it gets 
too far the other direction, and never lose sight of what has 
made the country great. It has been based upon hard-working 
individuals. The town I come from is blue-collar entrepreneurs. 
We all play together, we work together, and we get along 
together. And when you pay the highest starting wages, 
basically, in the lowest unemployment areas your business 
prospers and your employees do along with you.
    I have always had a beef too, owning a business, CEO pay of 
150 times the average workers. That is not going to work. You 
know, I never did it in my own business. I would have been 
embarrassed to do it. On the other hand, you want to make sure 
you do not squash innovation, entrepreneurialism, because that 
is what makes our country great. And that has got to walk 
alongside workers benefitting along the way.
    That is my two cents. That is why I came today. Thank you.
    Chairman Sanders. Thank you, Senator Braun.
    Senator Van Hollen is with us virtually.
    Senator Van Hollen. Thank you, Mr. Chairman, and let me 
thank all of our witnesses today.
    Mr. Smalls, you mentioned in your testimony that in 
addition to firing you, Amazon also fired Gerald Bryson, who 
was one of the other protest leaders. Amazon claimed Mr. Bryson 
was fired for statements he made in an argument with a co-
worker, but here is how an NLRB administrative judge described 
Amazon's review of Mr. Bryson's conduct that led to his illegal 
firing.
    And I am quoting now from the judge: ``An ostrich-like, 
head-in-the-ground investigation that seeks to avoid evidence 
which might disclose information mitigating the employee's 
misconduct,'' unquote. In other words, Amazon deliberately 
ignored the facts, deliberately misrepresented the situation, 
and that is why the NLRB ordered Amazon to reinstate Mr. Bryson 
with back pay and found that his termination had been wrongful.
    So, Mr. Smalls, you know Mr. Bryson. Why do you believe, 
why did Amazon fire Mr. Bryson?
    Mr. Smalls. A few things. Number one, he is Black. Number 
two, he was protesting alongside with myself and others over 
COVID-19, which was running rampant at the time. New York was 
the epicenter. So they wanted to, once again, silence the 
organizers that were advocating for that, myself include. You 
know, I am still unemployed as we speak.
    Senator Van Hollen. And when a company like Amazon takes 
that kind of action in retaliation for a protest, does that 
make it more difficult for you to organize?
    Mr. Smalls. Of course it does. It is the intimidation 
factor. You know, they fire the people that are speaking up. 
Everybody else would not want to come forward because they 
think it is going to happen to them.
    Senator Van Hollen. Yeah. So, you know, and here is the 
thing about our system. It took two years, or a little longer 
than two years for this particular case to wind its way through 
the NLRB and get a decision from an NLRB judge. By that time 
the damage is already done, not just to the person wrongfully 
fired but also to the organizing effort. We have just got to 
dramatically improve this system, and that is why we want to 
provide additional resources to the NLRB and make other 
reforms.
    You know, I chaired a hearing just earlier this week in the 
Appropriations Committee. I chair a subcommittee called the 
Financial Services and General Government Subcommittee. And I 
discussed with the IRS Commissioner the fact that we already 
debar, we already prevent Federal contractors who do not pay 
their taxes from getting government contracts, right? It makes 
sense that if you are not paying your taxes on time you should 
not benefit from a contract that taxpayers are funding.
    We also will hear later from the GAO witness, on the second 
panel, that Federal contractors can also be debarred for 
violations of the Service Contract Act, and the existing 
Federal acquisition regulations provide for debarring Federal 
contractors for any offense indicating a lack of business 
integrity or honesty.
    Mr. LeRoy, given that we already have these provisions in 
place for violating tax laws, service contract laws, and other 
circumstances, why would we not also say that for contractors 
who are engaged in serious violations of labor law that they 
would be prohibited from getting Federal contractors, at least 
for some period of time?
    Mr. LeRoy. I wholly agree, Senator, and I am proud to say 
that I am a Maryland resident and that you represent us very 
well.
    Looking at the Department criteria for some of the General 
Services Administration, even state governments, they all have 
procedures. We are simply saying we want to elevate labor law 
to the same magnitude and significance as tax law or integrity 
law or antitrust law, and I think that is a very reasonable 
thing to do. It is saying we care about workers and we are not 
going to pay companies to degrade or places suppressed wages 
make inequality worse.
    Senator Van Hollen. Just in my closing seconds here, Mr. 
Spencer, should we have a carve-out? In other words--and I am 
trying to hear where we would agree that there has been a 
significant violation of labor law, right--would you agree that 
that is the kind of violation that, at least for a period of 
time, should disqualify a contractor from getting a taxpayer-
funded contract?
    Mr. Spencer. What I would say is I think I agree with you, 
or your point that there is a procedure in place currently, 
under the Federal acquisition regulations to determine whether 
a contractor is suitable to receive a contract.
    I used to work in the Federal Government so I knew 
contracting officers when I was there. I still know some of 
them now, and I trust those folks to use their best judgment 
when evaluating a contract as to the suitability of an 
individual contractor.
    I would just point out one thing here, not to talk about 
Amazon, but one of the things that they did during the 
pandemic, as we recall, there was a dramatic expansion in the 
unemployment insurance system to provide benefits to people who 
were out of work. Amazon Web Services helped some of the states 
deal with the computer upgrades that needed to happen, to make 
sure that those benefits could be paid on time and to people 
who had earned those benefits.
    So if you are limiting the ability of companies like that 
to provide those vital services that is going to inhibit the 
ability of people to collect the benefits that they have 
earned.
    So I would say that I think contracting officers can make 
those evaluations and can use their balanced judgment to 
determine whether a company is suitable to receive a contract.
    Senator Van Hollen. Right. We should not have a situation 
where gross violations of labor rights are actually treated 
differently than gross violations of other laws that bar people 
from getting contracts.
    I see I am over my time. Thank you all. Thank you, Mr. 
Chairman.
    Chairman Sanders. Thank you, Senator Van Hollen. And with 
that let me thank all of our panelists for your presentations. 
I found them very interesting. Thank you all very much.
    And now we are going to hear from Tom Costa with the GAO.
    [Pause.]
    Chairman Sanders. Mr. Costa, thanks very much for being 
with us. Tom Costa is the Director of the Education, Workforce, 
and Income Security team at the U.S. Government Accountability 
Office. Mr. Costa oversees GAO's work on worker protection, 
safety, employment, and training issues. He has worked at the 
GAO since 2005.
    Mr. Costa, thanks for being with us.

STATEMENT OF THOMAS COSTA, DIRECTOR, EDUCATION, WORKFORCE, AND 
       INCOME SECURITY, GOVERNMENT ACCOUNTABILITY OFFICE

    Mr. Costa. Thank you for having me, Senator. Chairman 
Sanders, members of the Committee, thank you for inviting me to 
testify about enforcement of the Service Contract Act, or SCA.
    The SCA was enacted to provide labor protections for 
Federal service contractor employees such as administrative 
staff, janitors, security guards, and mail haulers. Contracting 
agencies such as the Department of Defense (DoD) or the Postal 
Service are responsible for administering the SCA while the 
Department of Labor (DOL) enforces the law.
    Under the SCA, workers do not have a private right of 
action against employers. However, DOL can withhold funds from 
a contractor who is found to have violated the SCA to ensure 
that workers are paid what they are owed.
    My written testimony summarizes the information we reported 
in our 2020 report, including what available data revealed 
about past SCA cases, challenges the DOL faced in enforcing the 
SCA, and challenges contracting agencies faced in implementing 
it. Let me start with a high-level overview of what we found.
    DOL's Wage and Hour Division conducts investigations in 
response to complaints or on its own initiative, carrying out 
more than 5,000 investigations from fiscal year 2014 through 
2019. Just over half of these cases involved DoD, the largest 
Federal contractor, or the Postal Service. DOL found violations 
in 68 percent of these completed cases, most of which involved 
fringe benefits or wage violations.
    In 94 percent of the cases with violations, employers 
complied with DOL. And from fiscal year 2014 through 2019, 
employers agreed to pay back approximately $224 million in back 
wages. DOL also debarred 60 employers during that same time 
period, which prevented those employers from being awarded new 
contracts for three years.
    I will focus the remainder of my statement on the updates 
we received from both DOL and the Postal Service in response to 
our six recommendations. First, while DOL tracks SCA 
information in an enforcement database, we found inconsistent 
data entry on Federal agencies hindered its efforts to use the 
data for enforcement purposes. For example, the Postal Service 
had over 35 different namings in the database. And I am pleased 
to say that DOL has closed this recommendation by updating its 
database.
    Second, we found that DOL lacked a complete picture of the 
effectiveness of its enforcement efforts because it did not 
analyze the information on its use of enforcement tools such as 
compliance agreements or debarments. Without analyzing this 
information DOL may not know how best to utilize its resources 
in resolving SCA cases. In response, DOL has revised its 
tracking system and plans to issue a summary report at the end 
of each year. However, while this is a positive first step, DOL 
has not indicated how it will analyze that information to see 
how effective their efforts are.
    For our third and fourth recommendations we found 
communication gaps between the Postal Service and DOL. The 
Postal Service has the second-largest number of SCA cases of 
any agency and the largest number of debarments of any agency. 
We recommended that the DOL and the Postal Service develop 
written protocols to improve their communication. Both agencies 
agreed and have started working on a memorandum of 
understanding. However, after some back and forth, we heard 
from both agencies that they are waiting for the other to 
proceed forward, indicating that the communication gap still 
exists.
    Fifth, we found that contracting agencies such as DoD and 
the Postal Service may have incomplete information about SCA 
violations from DOL which could affect their ability to make 
fully informed decisions when awarding new contracts. For 
example, the contracting agencies might not know that a 
contractor had been debarred, and this could increase the 
chance that a debarred contractor would get a contract it 
should not.
    We recommended that DOL take steps to ensure that the 
unique contractor identifier be included in debarment records. 
According to DOL, it has developed a tool to link these numbers 
to both contracting and performance records. However, the 
government transitioned this past month to using a new, unique 
identifier, and we are not sure yet if DOL has adjusted its 
processes to accommodate the new system.
    Finally, we found that DOL did not always communicate 
enforcement findings in a way that was readily accessible to 
contracting agencies. Information on past violations may assist 
contracting agencies to determine whether a prospective 
contractor has a satisfactory performance record. We 
recommended that DOL develop written procedures for relaying 
SCA findings to the contracting agencies, and DOL indicated it 
is in the process of doing so.
    I am pleased that DOL and the Postal Service have taken our 
recommendations seriously and begun taking action. 
Nevertheless, more needs to be done, and we will continue to 
monitor both agencies' efforts.
    This completes my prepared statement. I would be happy to 
answer any questions.
    [The prepared statement of Mr. Costa appears on page 52]
    Chairman Sanders. Thank you very much, Mr. Costa.
    Let me begin by asking you, are companies with past labor 
law violations still getting government contracts? Why is the 
Department of Labor not using its debarment authority to 
prevent this?
    Mr. Costa. Yes. Contractors who get debarred are still 
getting contracts. We identified 622 contractors that had SCA 
violations that received subsequent Federal contracts worth $35 
billion. It is important to note that the SCA, unlike some 
other labor laws, does not grade on the scale of severity, so 
an honest mistake is treated the same as a willful violation.
    That said, DOL did identify 379 cases where there were 
previous SCA violations or other violations and the contractor 
still got additional contracts. In 19 of those cases, those 
contractors were subsequently debarred.
    Chairman Sanders. Give us some examples of serious 
violations of the law by companies that still have government 
contracts.
    Mr. Costa. We looked at aggregate data, sir. We did not 
look at specific contractors, so I do not know exactly. Under 
the SCA it would be wage violations so it would be 
misclassifying someone as a much lower-paying position or it 
could be denying people their fringe benefits, like paid leave, 
vacation time, health benefits, things like that.
    Chairman Sanders. How widespread is that?
    Mr. Costa. As I noted, there was not too much above there. 
Well, I should take that back. In over 5,000 cases DOL found 
violations in 68 percent of those cases.
    Chairman Sanders. That seems to be pretty widespread.
    Mr. Costa. Yes. I am sorry. It was pretty widespread. What 
we do not know is the severity of those cases. We know that 
only 60 were debarred.
    Chairman Sanders. What portion of SCA violations included 
violations of other acts such as the Fair Labor Standards Act?
    Mr. Costa. Yes. At least 379 cases included either prior 
violations of the SCA or violations of other acts like the Fair 
Labor Standards Act or the Occupational Safety and Health Act.
    Chairman Sanders. Well, let me just thank you for being 
here and thank you for the work you are doing. I think the 
taxpayers in this country want to know that when their tax 
dollars are going to contracts with companies that those 
companies obey the law. I do not think that is asking terribly 
much. Do you agree?
    Mr. Costa. Companies should obey the law. That is correct, 
sir.
    Chairman Sanders. All right. So I think we are making 
progress but we still have a very long way to go. And with 
that, Mr. Costa, thanks so much for being with us.
    Mr. Costa. Thank you, sir.
    Chairman Sanders. As information for all Senators, 
questions for the record are due by 12 noon tomorrow with 
signed hand copies delivered to the Committee clerk in Dirksen 
624. Email copies will also be accepted. Under our rules, the 
witnesses will have seven days from receipt of our questions to 
respond with answers.
    With no further business before the Committee, this hearing 
is adjourned.
    [Whereupon, at 12:29 p.m., the hearing was adjourned.]

          ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD

    [Prepared statements, responses to written questions, and 
additional material submitted for the record follow:]

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