[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]


                      PROTECTING WORKERS AND SMALL
                     BUSINESSES FROM BIDEN'S ATTACK
                       ON WORKER FREE CHOICE AND
                            ECONOMIC GROWTH

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

                                HEARING

                               Before The

                        SUBCOMMITTEE ON HEALTH, 
                      EMPLOYMENT, LABOR, AND PENSIONS

                                 OF THE

                       COMMITTEE ON EDUCATION AND THE 
                                 WORKFORCE
                     U.S. HOUSE OF REPRESENTATIVES

                    ONE HUNDRED EIGHTEENTH CONGRESS

                             FIRST SESSION

                               __________


           HEARING HELD IN WASHINGTON, DC, DECEMBER 13, 2023

                               __________

                           Serial No. 118-32

                               __________

  Printed for the use of the Committee on Education and the Workforce
  
 [GRAPHIC NOT AVAILABLE IN TIFF FORMAT] 


        Available via: edworkforce.house.gov or www.govinfo.gov
        
                               __________

                   U.S. GOVERNMENT PUBLISHING OFFICE                    
56-238 PDF                  WASHINGTON : 2024                    
          
-----------------------------------------------------------------------------------          
        
                COMMITTEE ON EDUCATION AND THE WORKFORCE

               VIRGINIA FOXX, North Carolina, Chairwoman

JOE WILSON, South Carolina           ROBERT C. ``BOBBY'' SCOTT, 
GLENN THOMPSON, Pennsylvania             Virginia,
TIM WALBERG, Michigan                  Ranking Member
GLENN GROTHMAN, Wisconsin            RAUL M. GRIJALVA, Arizona
ELISE M. STEFANIK, New York          JOE COURTNEY, Connecticut
RICK W. ALLEN, Georgia               GREGORIO KILILI CAMACHO SABLAN,
JIM BANKS, Indiana                     Northern Mariana Islands
JAMES COMER, Kentucky                FREDERICA S. WILSON, Florida
LLOYD SMUCKER, Pennsylvania          SUZANNE BONAMICI, Oregon
BURGESS OWENS, Utah                  MARK TAKANO, California
BOB GOOD, Virginia                   ALMA S. ADAMS, North Carolina
LISA McCLAIN, Michigan               MARK DeSAULNIER, California
MARY MILLER, Illinois                DONALD NORCROSS, New Jersey
MICHELLE STEEL, California           PRAMILA JAYAPAL, Washington
RON ESTES, Kansas                    SUSAN WILD, Pennsylvania
JULIA LETLOW, Louisiana              LUCY McBATH, Georgia
KEVIN KILEY, California              JAHANA HAYES, Connecticut
AARON BEAN, Florida                  ILHAN OMAR, Minnesota
ERIC BURLISON, Missouri              HALEY M. STEVENS, Michigan
NATHANIEL MORAN, Texas               TERESA LEGER FERNANDEZ, New Mexico
JOHN JAMES, Michigan                 KATHY MANNING, North Carolina
LORI CHAVEZ-DeREMER, Oregon          FRANK J. MRVAN, Indiana
BRANDON WILLIAMS, New York           JAMAAL BOWMAN, New York
ERIN HOUCHIN, Indiana

                       Cyrus Artz, Staff Director
              Veronique Pluviose, Minority Staff Director
                                 ------                                

        SUBCOMMITTEE ON HEALTH, EMPLOYMENT, LABOR, AND PENSIONS

                      BOB GOOD, Virginia, Chairman

JOE WILSON, South Carolina           MARK DeSAULNIER, California
TIM WALBERG, Michigan                  Ranking Member
RICK ALLEN, Georgia                  JOE COURTNEY, Connecticut
JIM BANKS, Indiana                   DONALD NORCROSS, New Jersey
JAMES COMER, Kentucky                SUSAN WILD, Pennsylvania
LLOYD SMUCKER, Pennsylvania          FRANK J. MRVAN, Indiana
MICHELLE STEEL, California           PRAMILA, JAYAPAL, Washington
AARON BEAN, Florida                  LUCY McBATH, Georgia
ERIC BURLISON, Missouri              JAHANA HAYES, Connecticut
LORI CHAVEZ-DeREMER, Oregon          ILHAN OMAR, Minnesota
ERIN HOUCHIN, Indiana                KATHY MANNING, North Carolina
                         
                         C  O  N  T  E  N  T  S

                              ----------                              
                                                                   Page

Hearing held on December 13, 2023................................     1

                           OPENING STATEMENTS

    Good, Hon. Bob, Chairman, Subcommittee on Health, Employment, 
      Labor, and Pensions........................................     1
        Prepared statement of....................................     4
    DeSaulnier, Hon. Mark, Ranking Member, Subcommittee on 
      Health, Employment, Labor, and Pensions....................     6
        Prepared statement of....................................     8

                               WITNESSES

    King, G. Roger, Senior Labor and Employment Counsel, HR 
      Policy Association.........................................    10
        Prepared statement of....................................    13
    Haller, Matthew, President and CEO, International Franchise 
      Association................................................    45
        Prepared statement of....................................    47
    Griffin, Richard F. Jr., Counsel, Bredhoff & Kaiser..........    61
        Prepared statement of....................................    63
    Vernuccio, F. Vincent, President and Co-Founder, Institute 
      for the American Worker....................................    80
        Prepared statement of....................................    82

                         ADDITIONAL SUBMISSIONS

    Chairman Good:
        Statement dated December 13, 2023 from Intermodal 
          Association of North America...........................   123
        Letter dated December 11, 2023 from Americans for 
          Prosperity.............................................   127
        Employee Rights Act comparison from Americans for 
          Prosperity.............................................   130
        Letter dated December 13, 2023 from American Hotel & 
          Lodging Association....................................   132
        Letter dated October 16, 2023 from Associated Builders 
          and Contractors........................................   133
        Letter dated December 13, 2023 from Flex.................   136
        Letter dated October 18, 2023 from TechNet...............   138
        Letter dated December 13, 2023 from Coalition for a 
          Democratic Workplace...................................   140
        Letter dated December 13, 2023 from National Association 
          of Manufacturers.......................................   146
        Letter dated December 13, 2023 from Direct Selling 
          Association and the National Association of REALTORS...   148
        Signed letter dated October 16, 2023 for Employee Rights 
          Act (ERA)..............................................   150
        Statement dated December 13, 2023 from Financial Services 
          Institute..............................................   153
    Pramila, Hon. Jayapal, a Representative in Congress from the 
      State of Washington:
        Letter dated December 12, 2023 from The Child Labor 
          Coalition..............................................   108

 
                      PROTECTING WORKERS AND SMALL
                     BUSINESSES FROM BIDEN'S ATTACK
                       ON WORKER FREE CHOICE AND
                            ECONOMIC GROWTH

                              ----------                              


                      Wednesday, December 13, 2023

                  House of Representatives,
    Subcommittee on Health, Employment, Labor, and 
                                          Pensions,
                  Committee on Education and the Workforce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call at 10:19 a.m., 2175 
Rayburn House Office Building, Hon. Bob Good [Chairman of the 
Subcommittee] presiding.
    Present: Representatives Good, Walberg, Allen, Smucker, 
Burlison, Foxx, DeSaulnier, Courtney, Norcross, Jayapal, and 
Scott.
    Also present: Moran.
    Staff present: Cyrus Artz, Staff Director; Nick Barley, 
Deputy Communications Director; Mindy Barry, General Counsel; 
Jackson Berryman, Speechwriter; Michael Davis, Legislative 
Assistant; Isabel Foster, Press Assistant; Daniel Fuenzalida, 
Staff Assistant; Sheila Havenner, Director of Information 
Technology; Taylor Hittle, Professional Staff Member; Alex 
Knorr, Legislative Assistant; Trey Kovacs, Professional Staff 
Member; Andrew Kuzy, Press Assistant; Georgie Littlefair, 
Clerk; John Martin, Deputy Director of Workforce Policy/
Counsel; Hannah Matesic, Deputy Staff Director; Audra McGeorge, 
Rebecca Powell, Staff Assistant; Kelly Tyroler, Professional 
Staff Member; Seth Waugh, Director of Workforce Policy; Maura 
Williams, Director of Operations; Savoy Brown, Minority Intern; 
Nekea Brown, Minority Director of Operations; Ilana Brunner, 
Minority General Counsel; Joan Hoyte, Minority NLRB Detailee; 
Carrie Hughes, Minority Director of Health & Human Services 
Policy; Stephanie Lalle, Minority Communications Director; 
Raiyana Malone, Minority Press Secretary; Kevin McDermott, 
Minority Director of Labor Policy; Kota Mizutani, Minority 
Deputy Communications Director; Veronique Pluviose, Minority 
Staff Director; Dhrtvan Sherman, Minority Committee Research 
Assistant; Bob Shull, Minority Senior Labor Policy Counsel; 
Clinton Spencer IV, Minority Staff Assistant; Banyon Vassar, 
Minority IT Administrator.
    Chairman Good. The Subcommittee on Health, Employment, 
Labor, and Pensions will come to order. I note that a quorum is 
present. Without objection, the Chair is authorized to call a 
recess at any time.
    Judging by recent events, President Biden is making good on 
his promise to be the most pro-union President, leading the 
most pro-union administration in American history. When 
President Biden joined the United Auto Workers picket line in 
Michigan last September, he put his thumb on the scale in favor 
of the union like no President has ever done before.
    Ironically, President Biden claimed to stand with the 
workers who are directly hurt by the Biden inflation, and the 
America last energy policies that are so harmful to that very 
auto industry. Biden's Federal bureaucrats regularly fall in 
line to promote union interests over workers and job creators, 
but the National Labor Relations Act does not play favorites 
between unions and business. The NLRA has two basic functions, 
first to determine whether employees wish to join a union, and 
second, to prevent and remedy unlawful actions of employers and 
unions.
    The U.S. Supreme Court recognized in Letter Carriers vs. 
Austin in 1974, that Federal law favors, ``uninhibited, robust 
and wide-open debate,'' between union and management. The law 
provides a level playing field for workers to decide whether to 
join a union and protect workers who decide to work for 
themselves. Somehow President Biden did not seem to get the 
memo.
    The Biden administration is attempting to micromanage every 
employer employee relationship in the country at the behest of 
big labor union bosses. To achieve its goal, the Biden 
administration has weaponized the anti-business National Labor 
Relations Board to target business owners across America.
    The NLRB serves as the pro-union litigation arm of the 
Biden administration. To this end, it targets job creators, 
adds burdensome red tape for small business owners, and 
severely reduces employee free choice. In two recent board 
decisions the NLRB drastically overstepped its mandate.
    In the Cemex case, it limited the long-standing right of 
employees to vote in secret ballot elections. Additionally, the 
Board decided that a union could simply claim majority support 
through the unreliable card check process. This makes it easier 
to impose union representation on workers and businesses.
    The Atlanta Opera decision further curtailed employee 
rights when it revived the Obama era standard for determining 
independent contractor status. Some estimate over 60 million 
workers across the U.S. enjoy independent contractor status and 
the freedom that self-employment brings.
    This disastrous decision by the NLRB will crush their 
ability to earn a living as they choose. Finally, the NLRB 
issued a final rule that undermines the franchise model for 
many beloved brands that Americans know and rely on. 
Franchisors or franchisees like 7-Eleven, Dunkin, and Great 
Clips are major economic actors comprising 11.4 percent of all 
businesses in America.
    One estimate found that a similar NLRB rule during the 
Obama administration would have cost the franchise model 33.3 
billion dollars annually and cut 376,000 jobs. This is the 
promise of a pro-union President. Businesses will suffer and 
American workers will lose their jobs.
    Republicans, on the other hand, side with employees who 
value their precious right to join, or just as importantly not 
to join a union. Legislation we will consider today the 
Employee Rights Act, Save Local Businesses Act, Modern Work 
Empowerment Act and Small Business Before Bureaucrats Act are 
all proposals that will affirm employee rights, not union 
rights, and the fight back against the Biden administration's 
big labor agenda.
    Make no mistake, when Biden brags about being pro-union, he 
intends to line the pockets of union bosses and inflict pain on 
business owners and their employees. With that, I look forward 
to today's hearing, and I yield to the Ranking Member for an 
opening statement.
    [The prepared statement of Chairman Good follows:]
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    Mr. DeSaulnier. Thank you, Mr. Chairman and I want to thank 
all the witnesses. Protecting workers' rights to organize and 
confronting worker misclassifications is crucial to ensuring 
workers succeed in the modern economy. As a former business 
owner, it is important that your workforce, whether they are 
unionized or not, are respected and have a voice for the 
success of the business. That is what the labor movement 
frequently does, often does, is helps the balance.
    When workers have the power to negotiate for higher wages, 
better benefits, and safer workplaces, we all share in those 
victories. As members of this Committee, we are charged with 
empowering workers. Instead, today we are meeting to push bills 
that favor wealthy special interests at the expense, all too 
often, of workers' rights. We cannot forget that workers in the 
labor movement built the middle class by giving employees a 
voice on the job.
    Some of our Nation's greatest advances stem from workers 
having a fair share of the profits that they helped create. The 
American people's support for unions has never been higher. 
Unlike on many issues facing this country right now, Americans 
across party lines are united in support of the labor 
movement's goals, according to a recent poll from Navigator 
Research.
    Just last week for the first time in Louisiana history, 
nurses at the University Medical Center, New Orleans, voted 
overwhelmingly to unionize, and many of them said they were 
inspired by the UAW's successful contract with Detroit 
automakers.
    They see the best impacts of union representation coming 
from better pay, more benefits, and stronger job security. 
Unfortunately, after reviewing the three bills discussed today, 
the Modern Worker Empowerment Act, Save Local Business Act, and 
Employee Rights Act, it is clear these bills do not share the 
same goal of supporting workers' rights to form a union.
    These bills limit workers' rights and protections by 
chipping away at the Fair Labor Standards Act and the National 
Labor Relations Act. Democratic Committee staff was initially 
told that H.R. 3400, the so-called Small Business before 
Bureaucrats Act would be part of today's legislative hearing.
    Our witness, Mr. Griffin, commented on it in his written 
testimony. I am disappointed that the Committee, my friends on 
the Republican side, opted to instead markup this bill 
yesterday and bypass this hearing. The agenda of today's 
hearing is also particularly troubling considering that the 
rise of aggressive union busting campaigns and worker 
misclassification by unscrupulous employers--not all 
employers--unscrupulous employers. Between 2016 and 2021 alone, 
more than 85 percent of employers conducted anti-union 
campaigns during union elections, including firing organizers, 
closing stores, and reducing pay.
    Further, the misclassification of workers allows employers 
to cut corners and skimp on worker pay. Again, not all 
employers, some employers make it more difficult for employers 
who respect their workforce, leaving taxpayers to foot the bill 
for lost tax revenue caused by misclassification.
    Thankfully, under President Biden, the National Labor 
Relations Board has taken key steps to hold bad actor employers 
accountable for violating workers' rights and undo the 
dangerous precedent set by the Board under the previous 
administration.
    For instance, the Board restored the long-standing process 
for determining whether a bargaining unit is appropriate after 
the Trump administration made it easier for employers to 
gerrymander elections against the workers and unions.
    Last, NLRB General Counsel is undertaking a historic effort 
to restore labor law's promise of full freedom of association. 
This includes ending the practice of captive audience meetings 
where employers force workers to listen to anti-union 
propaganda, or else face discipline and termination.
    Ultimately, the responsibility of protecting workers' 
rights also falls on us, Congress. That is why we must pass 
legislation that improves the lives of workers and their 
families while also boosting our economy and helping 
responsible employers.
    For example, the Protecting the Right to Organize Act, the 
PRO Act, levels the playing field for workers and strengthens 
their ability to form unions to bargain for higher pay, better 
benefits, and safer workplaces, without the fear of 
intimidation or retaliation.
    We should also advance the Wage Theft Prevention and Wage 
Recovery Act, which deters wage theft practices and helps 
workers recover lost wages. Finally, I hope my colleagues will 
help us finally put an end to child labor. The Fair Labor 
Standards Act was written with a broad definition of 
employment, precisely because businesses--too many businesses, 
exploited narrow definitions to turn a blind eye to child labor 
violations.
    The bills that are the subject of the hearing today will 
turn back the clock on child labor at a time when violations 
are on the rise. In contrast, the Democrats' Protecting 
Children Act would provide Federal worker protection agencies 
with the resources they need to deter violations and protect 
children from being forced to work in dangerous working 
conditions where they may be injured.
    In conclusion, workers are counting on us to stand up for 
them. The last thing they need or want is for us to chip away 
at essential worker protections. Thank you, Mr. Chairman I 
yield back.
    [The prepared statement of Ranking Member DeSaulnier 
follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    Chairman Good. Thank you, Mr. DeSaulnier, and pursuant to 
Committee Rule 8-C, all members who wish to insert written 
statements into the record may do so by submitting them to the 
Committee Clerk electronically in Microsoft Word format by 5 
p.m., 14 days after the date of this hearing, which is December 
27, 2023.
    Without objection, the hearing record will remain open for 
14 days to allow such statements and other extraneous material 
referenced during the hearing to be submitted to the official 
hearing record.
    I will now turn to the introduction of our distinguished 
witnesses. Our first witness is Mr. Roger King, who is a Senior 
Labor and Employment Counsel at the H.R. Policy Association in 
Washington, DC. Welcome, Mr. King.
    Our second witness is Mr. Matthew Haller, who is the 
President and CEO of the International Franchise Association, 
located in Washington, DC. Welcome Mr. Haller. Our third 
witness is Mr. Richard Griffin, who is Of Counsel to the firm 
Bredhoff and Kaiser, which is located in Washington, DC. 
Welcome Mr. Griffin.
    Our final witness is Mr. Vincent Vernuccio, who is the 
President and Co-Founder of the Institute for the American 
Worker, which is located in Hamilton, Virginia. Welcome Mr. 
Vernuccio. We thank all the witnesses for being here today. We 
look forward to your respective testimoneys.
    Pursuant to Committee Rules, I would ask that you each 
limit your oral presentation to a 5-minute summary of your 
written statements. I would like to also remind the witnesses 
to be aware of their responsibility to provide accurate 
information to the Subcommittee. With that, I would like to 
first recognize Mr. King for 5 minutes.

   STATEMENT OF MR. ROGER KING, SENIOR LABOR AND EMPLOYMENT 
       COUNSEL, H.R. POLICY ASSOCIATION, WASHINGTON, D.C.

    Mr. King. Chair Good, Ranking Minority Member DeSaulnier, 
and Mr. Scott I also see you in attendance. It is nice to see 
you again. Thank you for another opportunity to testify before 
this Committee. As noted, I serve as the Senior Labor and 
Employment Counsel for the H.R. Policy Association.
    The Association represents approximately 10 percent of the 
private sector workforce in the country, over 10 million 
employees work for members of our Association. We regularly 
interact with the Congress and the executive agencies on 
employment and labor law matters, and we welcome this 
opportunity this morning.
    I want to emphasize four points in my testimony at the 
beginning of our discussion today. First, the National Labor 
Relations Board statutorily is to have five members. It has 
only four members. It has had three Democrat members and only 
one Republican member now for almost a year. Indeed, on 
December 16 it will be a year that the Republican seat has 
remained vacant.
    The White House has been totally silent on a nominee for 
this Republican vacancy, despite inquiries, our Association has 
received no response. Correspondingly, when a Democrat vacancy 
occurred earlier this year the President moved expeditiously, 
and the Senate moved also expeditiously. That Democrat seat was 
filled in 14 days.
    We have a contrast of a year vacancy plus, and 14 days. 
That has adverse consequences on policy decisionmaking at the 
Board. When former member John Ring's term expired December 16 
of last year, his staff went to the three Democrat members. At 
present there are approximately 50 staff attorneys, five of the 
staff attorneys working for the three democrat members, and 
only 12 for the lone Republican on the Board.
    That certainly provides a significant advantage for the 
democrat members, and research and writing, and puts undue 
pressure on the lone Republican member, although Member Kaplan 
has done an excellent job.
    Second, because there is not another Republican on the 
Board, a second Republican, as there has been by tradition, the 
Board decides cases on a three panel--three member panel basis, 
so mathematically you can never have a Republican majority on 
the three member panel that would occur in that position.
    Third, and perhaps most importantly, the diversity or lack 
thereof of opinions in the board's decisionmaking, which Chair 
Good, I certainly agree with you has been quite imbalanced. 
Every major policy decision issued by this board has been 
unfavorable to employers and the employees.
    This needs to be corrected, and hopefully, this Committee 
can make inquiries of the White House to determine exactly when 
this vacancy will be filled. In my testimony, I have a 
suggestion I think could receive bipartisan support. When a 
Board member's term expires, that individual would continue to 
serve until she or he was replaced or renominated.
    There are a number of executive agencies, the Federal 
Mediation Board being one, that have that type of process. We 
have had way too many vacancies over the years in both 
Republican and Democratic administrations. The vacancy on the 
Board issue needs to be addressed.
    Second, the Board's credibility is entirely lacking at this 
point. As I note in my written testimony, over the last 15 
years the National Labor Relations Board has reversed precedent 
in 4,660 cases, 4,760. How can any business, any union, any 
group of employees keep up with the constant change of the law?
    Illustrative of this fact, the Biden Board just in the last 
2 months has reversed 124 years of precedent. There has been no 
study that countered these figures. I understand Mr. Griffin 
may not agree with them, but there has been absolutely no study 
that has come forward to contradict these figures.
    This agency is a perfect example of the executive branch 
being out of control. Executive agencies owe the Congress 
responsibilities, and the stakeholders and the general public a 
duty to conduct its business much more efficiently and fairly. 
That is not happening. The NLRB has become Exhibit A of why the 
courts should roll back or curtail the degree of deference 
given to executive agencies.
    My final point on this issue is small and independent 
businesses cannot keep up with this constant change.
    Chairman Good. I have given you an extra 30 seconds there, 
your time has expired.
    Mr. King. I will wrap up.
    Chairman Good. Hopefully, you will be able to make that 
point during the questioning period with one of our members.
    [The prepared statement of Mr. King follows:]
 [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Chairman Good. I now recognize Mr. Haller for 5 minutes.

      STATEMENT OF MR. MATTHEW HALLER, PRESIDENT AND CEO, 
     INTERNATIONAL FRANCHISE ASSOCIATION, WASHINGTON, D.C.

    Mr. Haller. Chairman Good, Ranking Member DeSaulnier, 
distinguished members of the Subcommittee, my name is Matt 
Haller, I am the President and CEO of the International 
Franchise Association. Today there are more than 3,000 
franchise brands in nearly 800,000 U.S. franchise locations, 
employing more than 8 million workers.
    Franchising is not an industry, nor is it a way, as some 
contend, to shirk responsibility for employees, or avoid 
unionization. Rather, franchising is a business model. It 
allows brands or franchisors to license their concepts to 
individual business owners, or franchisees.
    Brands use the franchise business model to reach new 
markets more quickly, delivering products or services 
consumers' desire. In doing so, franchising democratizes wealth 
creation. By enabling individuals to build the American dream, 
small business ownership at the local level, not simply 
enriching corporations and shareholders.
    In franchising, we say you go into business for yourself 
but not by yourself. Franchising is an opportunity for someone 
to join a system and learn how to be a successful small 
business owner. In fact, IFA research reveals one-third of 
franchisees would not own a business without the support of the 
franchise model.
    The use of franchising is wide and varied throughout the 
economy, from hotels to gyms, early childhood education and pet 
services, franchising is in more than 300 industries and 
growing. Franchising is not big business. Franchising is a 
small business. More than 80 percent of franchise owners 
operate a single location.
    More than 50 percent of franchisors have fewer than 20 
overall locations. Congress recognized this fact when it passed 
the bipartisan Paycheck Protection Program. It saves tens of 
thousands of franchises during the pandemic, classifying 
franchisees as the small businesses that they are.
    Franchising has nearly doubled the rate of business 
ownership among minorities, and higher rates of ownership by 
women and veterans than non-franchise businesses. Franchises 
offer countless opportunities for employees to become business 
owners. For example, more than 95 percent of Domino's 
franchisees started as part-time pizza makers or delivery 
drivers.
    In most companies employees cannot own the business, but in 
franchising you can. It is the difference between working at a 
Starbucks and a Dunkin. Starbucks is just one corporation, but 
at Dunkin, which has more than 9,000 U.S. franchise locations, 
an employee often works their way up and can own their own 
store.
    The NLRB's Final Joint Employer Rule threatens all of this. 
If you take one thing away from today it should be this. 
Congress must stop the Final Joint Employer Rule to protect 
franchising. That is what is at stake here. We have seen this 
joint employer movie before, and we do not need a sequel.
    The last time the NLRB expanded the definition of joint 
employer it cost franchises 33.3 billion dollars per year, 
eliminated more than 300,000 jobs, and increased lawsuits by 93 
percent. A survey of franchisees by Oxford Economics found an 
overwhelming number of franchises with the same consequences 
today. Only 14 percent of franchisees said they would 
definitively open a franchise if this rule were in effect.
    I commend Congress for taking swift action to address this 
issue, including the Save Local Business Act, sponsored by 
Congressman James Comer, and the bipartisan congressional 
Review Act Resolution, proposed by Congressman John James, 
which this Committee reported favorably yesterday.
    There is a broad-based coalition of more than 70 national 
organizations, and the impact goes far beyond franchising, 
including the American Trucking Associations, and the American 
Hotel and Lodging Association, and more than 50 State 
organizations from Montana to Maine supporting these bills. The 
coalition also includes people like Tamara Kennedy, who used 
franchising to create the American dream.
    Tam started at an entry level position at a Minnesota Taco 
Johns and went on to buy seven restaurants, and Courtney 
Escalante, a McDonalds owner operator in California, who said 
the Joint Employer Rule threatens to undermine our business's 
success, and in turn irreparably harm our team members and 
local communities.
    For those defending this rule, I challenge you to think 
about how you will answer the questions from your constituents 
about how to comply. Given the inherent ambiguity in the NLRB's 
new definition of what constitutes control. If you ask the NLRB 
for example, so the indirect and reserve control, they have no 
answers.
    Franchise businesses thought the Browning-Ferris Standard 
was as bad as joint employer policy can be, yet somehow the 
NLRB has created a policy that is even worse. The bottom line 
is that Congress has a choice to make, allow the NLRB to 
continue with a final rule that would upend franchising as we 
know it, or step in and preserve all the good franchising has 
created for so many. Thank you again for the opportunity to 
testify. I look forward to your questions.
    [The prepared statement of Mr. Haller follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Chairman Good. Thank you, Mr. Haller. I would now like to 
recognize Mr. Griffin for 5 minutes.

 STATEMENT OF MR. RICHARD F. GRIFFIN, OF COUNSEL, BREDHOFF AND 
                    KAISER, WASHINGTON, D.C.

    Mr. Griffin. Chairman Good, Ranking Member DeSaulnier, and 
members of the Subcommittee, thank you for the opportunity to 
testify before you today. These bills would move national labor 
and economic policy in the wrong direction. I strongly urge you 
not to adopt them.
    My name is Richard Griffin. I have practiced labor law for 
42 years. I am currently Of Counsel at the Washington, DC. law 
firm of Bredhoff and Kaiser. I previously served as a National 
Labor Relations Board member and as the agency's General 
Counsel. My testimony today draws upon my varied experiences as 
a labor lawyer and is specifically informed by my NLRB tenure.
    I start by strongly affirming the central importance of 
workers' right to join together to form unions, to act together 
for their mutual aid and protection, and to bargain 
collectively. These rights are protected by the National Labor 
Relations Act but often go unexercised out of fear or 
ignorance.
    As a result, the gap between what workers earn and what 
management takes home has grown ever wider, and our economic 
system fails those who do the real work of the enterprise. 
However, the bills before you will not work to workers' 
advantage or help the economy as a whole. Rather, these bills 
would strip many workers of fundamental protections, creating a 
group of second-class citizens.
    When so many workers are demanding the right to a union, 
and a more just economy, today's hearing ignores those voices. 
My written testimony addresses all the problematic provisions 
of the four bills. I will focus my testimony here on H.R. 2700, 
2826 and 5513.
    H.R. 2700 is the most extensive and most troubling of the 
bills under consideration. It would do damage to many 
provisions of the National Labor Relations Act and the Fair 
Labor Standards Act. First, contrary to years of precedent, it 
would eliminate voluntary recognition as a lawful means for 
unions to obtain exclusive representative status, thereby 
disrupting many existing voluntary agreements made by employers 
and unions.
    Second, it would limit the employee contact information 
employers are required to provide to unions during the NLRB 
representation election process and place limitations and 
penalties on the union's use of that contact information to 
communicate with employees.
    Employers already have a substantial election advantage 
because they can communicate throughout the workday with 
employees in the workplace, while under current precedent 
unions are denied access to the workplace. The bill would make 
the Board's election process more unfair.
    Third, H.R. 2700 would impose unprecedented and 
unconstitutional limitations on unions' use of member dues. 
Fourth, it would remove many employees from the overtime and 
minimum wage protections of the FLSA by applying the common law 
of agency employee definition to that statute, thereby opening 
the door to further exploitation of many of society's most 
vulnerable workers.
    Fifth, common to the common law right-to-control test, 
which allows for the consideration of both reserved and 
indirect control of employees' terms and conditions of 
employment, it would provide a narrow joint employer definition 
for both the NLRA and the FLSA and limit the factors that may 
be considered in making a franchisor-franchisee joint employer 
determination.
    This joint employer definition will allow large businesses 
like franchisors and users of temporary employees to escape 
responsibility for their involvement in determining employee 
terms and conditions of employment and leave small businesses, 
like franchisees and subcontractors, holding the bag.
    Sixth, H.R. 2700 would exclude tribal enterprises from NLRA 
jurisdiction, thereby depriving both tribal members and non-
tribal members who work in tribal enterprises of their rights 
under the National Labor Relations Act. In sum, the bill is a 
collection of harmful changes and ill-considered policy.
    Turning to H.R. 286, that bill limits itself to adopting a 
narrower standard for joint employer under the NLRA and FLSA 
and suffers from the same defect as H.R. 2700. The failure to 
allow for consideration under the common right, common law 
right of control of reserved and indirect control, such that 
all of the entities that co-determine workers' terms and 
conditions of employment will not be at the bargaining table, 
or responsible for payment of minimum wages and overtime.
    In order to conclude in a timely manner, I will address 
5513 in response to the questions, but I urge you to reject 
these bad pieces of legislation, and I look forward to the 
opportunity to respond to questions. Thank you, Mr. Chairman.
    [The prepared statement of Mr. Griffin follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Chairman Good. Thank you Mr. Griffin, and now we will go to 
Mr. Vernuccio, who is our last witness, for 5 minutes.

STATEMENT OF MR. F. VINCENT VERNUCCIO, PRESIDENT, INSTITUTE FOR 
            THE AMERICAN WORKER, HAMILTON, VIRGINIA

    Mr. Vernuccio. Mr. Chairman, Ranking Member and members of 
the Subcommittee, thank you for giving me the opportunity to 
testify here today. My name is Vincent Vernuccio, and I am 
President of the Institute for the American Worker. I4AW is a 
501(c)3 focused on the benefits of freedom and collaboration 
between workers and job creators.
    I am here to support the commonsense policies that will 
empower workers and their families to rise and thrive in the 
21st century. Congress has an opportunity to stand with workers 
by preserving the best of the status quo in labor policy, 
ensuring that tried and true worker protections and 
opportunities are maintained and standardized throughout the 
Federal Code, while taking small but impactful changes to 
advance worker self-determination.
    I will discuss four policies here today that put the 
individual worker at the center of labor law. They include the 
Employee Rights Act, the Save Local Business Act, the Modern 
Worker Empowerment Act, and the Small Business Before 
Bureaucrats Act.
    The legislation includes simple and narrow reforms that 
empower workers with more freedom and more flexibility. The ERA 
is about defending employee privacy and choice. In contrast, 
rules enacted by the NLRB and proposed provisions in the 
Protecting the Right to Organize Act. Card check is a mechanism 
of union organizing where a union collects cards to unionize 
employees.
    It bypasses the protections of a secret ballot election and 
can lead to coercion and deception of workers. The problems 
with card check in union organizing are well documented. In the 
past, this Committee has heard from former union organizers who 
have testified about manipulating workers to get cards signed.
    NLRB cases show intimidation, a card solicitor allegedly 
told another employee that, ``She had better get a card signed 
because if she did not the union would come and get her 
children and slash her car tires.'' Card check intimidation is 
not just limited to employees; unions go to great lengths to 
force companies to agree to card check by sophisticated anti-PR 
campaigns called corporate campaigns.
    These campaigns go after a company's reputation to try to 
drive away customers and harm their business. The goal is to 
have the company take away the secret ballot from their 
employees. The NLRB Cemex decision and the PRO Act allow for a 
back door version of card check, allowing employees to have the 
false notion of an election, then negating the vote and 
recognizing the unions by cards signed if the employer violates 
labor law.
    Additionally, even with an election, unions are given 
unfettered access to employee personal information, such as 
their personal email, their cell phone, and their home address. 
Employees are not free to opt out of giving the union this 
information. There has been testimony of unions refusing to 
take no for an answer and harassing workers at home.
    This is why the ERA's secret ballot provision and its 
privacy protections giving workers control over what 
information is given to a union is needed. The ERA and the 
Modern Worker Empowerment Act also safeguard the choice of 
independent workers to work for themselves. This is needed as 
the Department of Labor, the NLRB, and the PRO Act are all 
attacking independent contracting by varying degrees.
    We have numerous stories on our website, I4AW.org about 
entrepreneurs whose livelihoods have been shattered when their 
ability to freelance was attacked. The ERA and the Modern 
Worker Empowerment Act would defend independent contractors' 
ability to work for themselves or have side hustles, by 
standardizing a common law test for who is an employee, or 
giving more weight to entrepreneurial opportunity respectively.
    The ERA in the Save Local Business Act would defend small 
business and their employees from being forced to be subsumed 
into larger businesses. These are in response to efforts by the 
NLRB and provisions in the PRO Act to change the definition of 
who is a joint employer, something that before the Obama 
administration had been settled law for decades.
    The ERA would keep employees from subsidizing politics they 
disagree with. The ERA would give workers an annual opportunity 
to decide if they wanted to continue to fund union politics. 
Finally, the Small Business Before Bureaucrats Act would 
modernize the threshold of NLRB jurisdiction, essentially 
matching inflation to codify the standards of who the NLRB had 
jurisdiction over 65 years ago, the last time the thresholds 
were set forth.
    These reforms defend the best of current labor law, while 
enacting simple, yet powerful safeguards of worker rights. 
Workers deserve to make voluntary decisions about unionization 
free from intimidation and harassment. They deserve to have 
their privacy protected and to work in a way that is best for 
themselves and their families. Thank you.
    [The prepared statement of Mr. Vernuccio follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Chairman Good. Thank you, Mr. Vernuccio. Under Committee 
Rule 9, we will now question witnesses under the 5-minute rule. 
I will wait to ask my questions, and therefore recognize 
Chairman Foxx for 5 minutes.
    Ms. Foxx. Thank you, Mr. Chairman, and I want to thank our 
witnesses for being here today. Mr. King, in 2022, labor unions 
won 76.3 percent of representation elections. Despite labor 
unions success in elections, NLRB issued a decision in the 
Cemex case that upends the current union representation 
framework by greatly diminishing workers' right to vote by 
secret ballot.
    Since unions already win most representation elections, it 
appears this decision is a solution in search of a problem. 
What is the NLRB's ultimate goal in issuing the Cemex decision?
    Mr. King. Thank you. It is good to see you again, and I 
want to congratulate you and Mr. Scott on your leadership this 
year. This Committee has been one of the most productive 
Committees in Congress.
    Mrs. Foxx. Thank you.
    Mr. King. You have done great work. The NLRB is attempting 
to go to card recognition, taking secret ballots out of the 
equation. The secret ballot process by which members of this 
Committee are elected, the way we run our country is under 
attack, and the Cemex case is clearly wrong. It is going to be 
tested in the courts, and I think ultimately the NLRB position 
will not prevail.
    Mrs. Foxx. Let me ask a quick followup. In your opinion, 
what are the reasons for the long-term decline in private 
sector union membership, which is now 6 percent of workers?
    Mr. King.
    Mr. King. Well, there are so many different answers to that 
question. First of all, we have legislation at the State, 
local, and Federal level that really makes the union equation 
unwanted, unneeded. Second of all, workers want independence. 
Mr. Haller referenced the franchisee model.
    Workers, employees in this country want the flexibility to 
do as they please. They do not want to be dictated to. Finally, 
the unions have lost their way, frankly. They are not spending 
their resources on traditional organizing. They are spending 
them on political activity. They are spending on contentious 
UAW strikes that make no sense.
    Mrs. Foxx. I am going to get to some of that in a minute. 
Mr. Haller, from 2015 to 2020 the expanded joint employer 
standard from the Board's Browning-Ferris decision cost 
franchise businesses an estimated 33.3 billion per year and 
prevented the creation of 376,000 jobs. It also led to a 93 
percent increase in lawsuits against franchise businesses.
    The Biden NLRB recently resurrected the disastrous 
Browning-Ferris decision, via a final rule published in 
October. What can Congress do to restore certainty for the 
franchise industry and support local business owners' ability 
to provide jobs for American workers?
    Mr. Haller. Thank you, Chair Foxx, for the question. 
Franchising is the American dream, and franchise businesses are 
always in a unique position to help address our economic 
challenges if government doesn't get in the way. We applaud 
this Committee for considering the Save Local Business Act, 
introduced by Congressman James Comer.
    The bill would codify the permanent joint employer standard 
based on direct and immediate control of a business, not a 
vague, unworkable standard as now proposed and finalized by the 
NLRB. The Save Local Business Act is also part of Congressman 
Rick Allen's Employee Rights Act, another topic of today's 
hearing.
    IFA is proud to support both, as well as the congressional 
Review Act challenge proposed by Congressman John James, which 
this Committee reported favorably yesterday. Any of these would 
protect the franchise business model from the NLRB's harmful 
Joint Employment Rule.
    Mrs. Foxx. Thank you. Mr. Vernuccio, labor unions have 
become highly political. In the 2022 election cycle organized 
labor spent more than 1.67 billion dollars on political 
activity and lobbying, according to a report from the National 
Institute for Labor Relations Research. The overwhelming 
majority of big labor political spending goes to progressive 
causes and politicians.
    Do all workers represented by unions support union 
political spending and statements that promote progressive 
causes and politicians?
    Mr. Vernuccio. Thank you for the question, and the fast 
answer is no. 40 percent of union members survey after survey 
of union households, typically vote Republican, and it does not 
stop--the union politics does not stop with direct candidate 
giving. We have seen statements from unions, unfortunately 
recently supporting things like Palestine against Israel.
    Right after the October attacks a Starbucks Worker's United 
post on Twitter put solidarity with Palestine in front of a 
picture of a bulldozer. There was an NYU/UAW local that said 
that this past weekend's events did not occur in a vacuum, nor 
were they unprovoked. We hold Israeli regime and its Apartheid 
laws responsible for the painful death and destruction and 
despair of this past weekend.
    It is not just political giving that unfortunately these 
unions are advocating.
    Mrs. Foxx. Thank you again to our witnesses, and thank you, 
Mr. Chairman.
    Chairman Good. Thank you, Ms. Foxx, and now we will 
recognize my distinguished friend from Virginia, Mr. Scott for 
5 minutes.
    Mr. Scott. Thank you, Mr. Chairman. Mr. King, you were 
cutoff in your testimony. Did you want to make one last point 
before we get started with questions?
    Mr. King. I beg your pardon.
    Mr. Scott. You were cutoff on your testimony.
    Mr. King. I just had one additional point, yes, thank you 
Mr. Scott. The union movement in this country is sitting on 
approximately 40 billion dollars of assets, but yet the data 
shows it is not spending those resources for traditional union 
organizing, and I think it is a fair question to ask why not.
    The final point I wanted to make, Mr. Scott, was when you 
look at the number of eligible members in the private sector 
that come under a union contracted member, the union movement 
is attempting to organize less than one-tenth of 1 percent, so 
those are fair questions I think to ask why the PRO Act is even 
needed, but thank you for your courtesy.
    Mr. Scott. Thank you. Mr. Vernuccio, you indicated that you 
answered the question, unions had given so much to political 
campaigns. Do you know how much businesses have given to 
political campaigns and do shareholders have a say in where 
that money goes?
    Mr. Vernuccio. I believe if you look it up you see 
generally semi-even splits between both political parties and 
causes between business giving. Unfortunately, and I think the 
point that Chairman Foxx was trying to make is that the 
overwhelming majority of political giving of unions goes to one 
side of the aisle, or one point of view, while their 
membership, about 40 percent may disagree with that.
    Mr. Scott. You are saying business splits their 
contributions equally, but shareholders do not get a say in 
where that money goes. Is that right?
    Mr. Vernuccio. I believe businesses split it quite a bit 
more than unions split their political giving. If you look at 
election reports.
    Mr. Scott. It is basically a rhetorical question, anyway. 
Mr. Griffin, a question was made in changing precedent on the 
joint employer rule. Has precedent changed or restored in the 
Biden Joint Employment Rule?
    Mr. Griffin. Well, the precedent for many years prior to 
the TLI and Lerico cases took into account reserved control and 
indirect control. That was for the period up until the mid-
80's. Then there was this imposition of a requirement for 
direct and immediate control, without indicating that there was 
any overruling of precedent.
    When the Board looked in the Browning-Ferris case, when the 
general counsel's brief for example, urged the Board to return 
to restore the original understanding of the common law. The 
short answer to your question is it is a restoration of 
precedent, not an overturning.
    Mr. Scott. Thank you, and on the franchise situation, if 
the franchisor requires that pay cannot go over $15.00 an hour, 
but otherwise doesn't do anything, and if you do not have the 
Joint Employment Rule and the franchisee is the only 
``employer'', what good does it do to try to negotiate wages 
when it has already been set before the franchisee can have a 
say?
    Mr. Griffin. Well, to your point, the whole purpose of the 
Joint Employer Rule is to make sure that the entity that 
controls terms and conditions of employment is at the 
bargaining table and that does not mean they have to be 
physically present. They certainly, as in many multi-employer 
situations, can designate a common agent to negotiate on behalf 
of both the franchisee and the franchisor, but if the 
franchisor does have control over terms and conditions of 
employment, they ought to be at the bargaining table because 
otherwise the collective bargaining over that particular term 
and condition is going to be useless with the franchisee 
because they do not have discretion.
    Mr. Scott. Thank you. Today, if a company illegally fired 
someone for organizing a union, clearly an unfair labor 
practice, what happens?
    Mr. Griffin. The individual or someone on the individual's 
behalf would file a charge with the NLRB. The NLRB regional 
office would investigate the charge, and if there was merit 
found, and the case was not settled, the complaint would issue. 
The matter would be tried before an Administrative Law Judge. 
The Administrative Law Judge would issue a decision, that 
decision would be subject to appeal to the NLRB itself in 
Washington, and then that decision if it found a violation 
would be subject to review in the Circuit Courts of Appeals.
    Mr. Scott. Then how long does that take and what does the 
employee get at the end?
    Mr. Griffin. It very much depends on the circumstances. It 
could take a very long time because if you go through all the 
steps in that process, including going up to the Court of 
Appeals, sometimes it takes as long as a year or 2 years after 
the Board's decision for the Court of Appeals to have the case 
briefed, argued, and decided, so it could take several years.
    At the end, the employee gets back pay minus interim 
earnings and reinstatement.
    Mr. Scott. If they went and got a job at a better place--
    Chairman Good. The gentleman's time has expired.
    Mr. Scott. There would be no compensation. Is that right?
    Mr. Griffin. That would be counted against them. They would 
not get compensation. That is correct.
    Chairman Good. Thank you, Mr. Scott. Now we will recognize 
Mr. Walberg from Michigan for 5 minutes.
    Mr. Walberg. Here we go again. This morning as we deal with 
this issue it reminds me of the Groundhog Day movie, or Yogi 
Berra's deja vu all over again. This goes on and on, and it is 
frustrating because it is again clear evidence that the union 
wants a thumb on the scale because they cannot accomplish it 
themselves.
    I am not against unions, but franchises are successful 
because of choice. When you stop and think about it, 800,000 
franchises in this country, maybe more, that is what we are 
told. Thousands of those are owned by former employees who 
worked their way up, who are not asking--who are not asking to 
be controlled by a union but to have the freedom to be a 
franchisee.
    Here we go again with the efforts to change what is 
working. Why? The union wants to be big business as opposed to 
helping little people, little people, as they are often called. 
I call them free people making their own decisions, 
entrepreneurs who have a design that they can work with, and 
they can be successful, and they can help other people be 
successful as well, so it is frustrating.
    I want to keep my record of not being bombastic, but this 
does frustrate me. In September, I along with 80 of my 
colleagues, sent a bipartisan letter to the FTC on the 
importance of this rule, that being the FTC franchise rule. 
Stressing that any future changes continue to support the 
future sustainability of the franchise model.
    Mr. Haller, can you please tell us about the FTC franchise 
rule and how it would continue to foster small business 
creation in the franchise space?
    Mr. Haller. Thank you, Mr. Walberg, for your question, and 
also thank you for your bipartisan leadership on that issue. 
The FTC's franchise rule has served as an important tool to 
require franchisors to provide an extensive presale disclosure 
document to prospective franchisees. That policy decision in 
favor of presale disclosure instead of rigidly prescriptive 
regulation has led the franchise sector to flourish with 
thousands of franchise companies in more than 300 business 
sectors.
    Franchising has also provided an opportunity for countless 
veterans, minorities, women, immigrants, a pathway to wealth 
creation for their families, workers, and local communities, so 
thank you for your efforts leading this letter, along with your 
colleague Ms. Lesco, Mr. McGarvey, and Mr. Carter, along with 
many others in the House and the Senate.
    If I also may, I did want to take one moment to address the 
point that Mr. Scott made. There are no franchisors that set 
wages for franchisee employees, and if they do, they should be 
held accountable under a direct control standard.
    Mr. Walberg. Yes.
    Mr. Haller. That is not what we are facing here with the 
NLRB's Joint Employer Rule. We are facing a much more expanded 
standard, and as I mentioned in my testimony NLRB has not been 
able to define.
    Mr. Walberg. OK. I appreciate you responding to that. Like 
all sectors of the economy, dealing with Bidenomics, franchise 
businesses are navigating economic headwinds such as high 
inflation, labor shortages, and supply chain disruptions. 
Despite these challenges, the Franchise Business Review 
reported that franchisee satisfaction is at an all-time high, 
probably because they control their life to some degree.
    In your view, what is the biggest threat to the franchise 
business model besides just government?
    Mr. Haller. Well, government generally, but specifically 
today this greatly expanded Joint Employer Rule that goes into 
effect in February. 87 percent of franchisees are concerned 
about this because they do not want a franchisor coming and 
taking more control over their business.
    Alternatively, 82 percent of franchisees are concerned 
about reduced franchisor support. Either one of these outcomes 
is not good. As I mentioned in my testimony, only 14 percent of 
franchisees said that they would definitely open a franchise if 
this rule were in effect, that is 800,000 businesses.
    IFA represents franchising. We represent franchisors and 
franchisees, groups representing all sorts of industries, 
including franchisees strongly oppose this rule.
    Mr. Walberg. OK. Well, I see my time is about to expire. I 
want to ask a question, but I will not, Mr. Chairman, I yield 
back.
    Chairman Good. Thank you, Mr. Walberg. We will now 
recognize Mr. Courtney from Oregon for 5 minutes.
    Mr. Courtney. Thank you. Actually, the State of Connecticut 
is a little bit, you know, far away from Oregon, so--
    Chairman Good. Apologies.
    Mr. Courtney. Red Sox Nation is where I am from.
    Chairman Good. Oregon, Connecticut, what's 3,000 miles. I 
mean.
    Mr. Courtney. I am going to reclaim my 15 seconds I just 
gave up there, the geography lesson. Again, this is deja vu all 
over again. I agree with my friend from Minnesota, Michigan, 
Tim Walberg that you know, we are again talking about another 
set of bills before the Subcommittee that are headed for the 
shredder, and that are really aimed at doing nothing more than 
curtailing union rights at a time when as I mentioned last 
hearing, the Gallup Poll, which is conducted every year on 
approval of unions, again is well above the norm, 67 percent.
    It dipped a little bit from last year, which was pointed 
out at the last hearing, but I did get some of the cross tabs, 
and they actually asked about the recent strikes that occurred 
with the United Auto Workers and the Film and Screenwriters. In 
the case of the UAW strike, over 70 percent of the respondents 
supported the union, only about 19 percent supported the 
company, and those were basically the same figures for the 
Screenwriters.
    We are at a point right now where again, actually the 
American public has shown that they actually approve of unions 
and also think they are good for the economy. We saw this 
recently in Southeastern Connecticut when a metal trades 
council just signed an agreement with General Dynamics Electric 
Boat for an over 20 percent wage increase, it is a 5-year 
contract.
    The CEO commented afterwards that this contract is a key 
element of our strategy to rapidly grow our production rate to 
deliver more submarines faster to the U.S. Navy, showing that 
collective bargaining can be good for not only workers, but 
good for business and good for our national security. Again, 
because of the demand signaled from the Navy for those 
platforms is off the charts right now.
    Again Mr. Griffin, this package of proposals in sum, you 
know, really it is just about suppressing union membership, and 
again, what is your perspective in terms of what does that mean 
in terms of our economy getting again, you know, the middle 
class, where they need to be at a time when the cost of living 
is high?
    Mr. Griffin. Well, I think your point is 100 percent 
correct that the increases in wages, the increases in benefits, 
the health and safety protections, the protection from 
discharge not for just cause, all the parts of a collective 
bargaining agreement are what allow people to become members of 
the middle class, what allow people to have safety on the job, 
have protection on the job from unjust dismissal, and allow for 
them to have retirement security, job training, all these kinds 
of things come with a collective bargaining agreement.
    It is not just for the people that are represented by the 
union. The first thing that happened after the UAW settled 
those contracts was a number of non-union car manufacturers 
raised wages substantially in response to the wage increase 
that was achieved in the collective bargaining agreement, so 
that's the ripple effect.
    That is the union raise for non-union workers, and that is 
all good for employees, for workers, and for the economy.
    Mr. Courtney. One other aspect, and we again see it done at 
EB, is that the union management Fitzgerald Act apprenticeship 
programs, which again is the earn while you learn for people. 
It gives, you know, now really hundreds, and really in the 
coming years, thousands of people an avenue to get a good skill 
that is going to be comparable to what you could get with a 
higher education degree.
    Again, that union collaboration is key to making sure that 
that skilling up actually succeeds.
    Mr. Griffin. Well, you are kind of in my wheelhouse here 
because I worked for 28 years for a construction union that 
represented heavy equipment operators, and there is almost no 
way that an individual employer because of the capital expense 
in heavy equipment, there is no way an individual employer can 
train heavy equipment operators.
    You have to do it jointly, collaboratively, on a multi-
employer basis, and that is what the Joint Apprenticeship and 
Training Programs provide. They also provide journey person 
upgrading, which allows you to get additional skills so you are 
more employable in the course of your work life.
    Mr. Courtney. One last thing. On the provision in one of 
the bills here which limits the way people can be communicated 
or contacted by unions, again just two quick questions. No. 1, 
that does not apply to employers, correct?
    No. 2, coming from a body where we contact people by text, 
by email, by mail, I mean if you really care about elections 
and free choice, I mean you need to again, be able to have an 
opportunity to communicate with people. Is that correct?
    Mr. Griffin. Yes. You need a level playing field. The 
employer has access all day long in the workplace. The union is 
not allowed access to the workplace, so these bills will only 
exacerbate that problem.
    Mr. Good. Thank you. We will now recognize Mr. Allen from 
Georgia for 5 minutes.
    Mr. Allen. Thank you, Mr. Chairman, and I want to thank our 
guests here this morning, witnesses, for your testimony. 
Obviously, we are in a different world today is changing 
rapidly. It is changing drastically in my 40-year business 
career, and in fact, when I talk to, you know, heads of unions, 
the biggest problem they have is recruiting a workforce, which 
is the biggest problem we have as employers is recruiting a 
workforce.
    There is tremendous competition for workforce out there 
today. When I started in business, people were standing in line 
for a job, and I am talking union people were standing in line 
for a job. In fact, we would hire groups, and then if they did 
not perform, we would send them back and get somebody else. I 
mean it was, you always had several people there standing in 
line. That is not the case today.
    Of course, the franchise model has created tremendous 
wealth, and in fact in my experience in business where we self-
perform most of the work initially in the construction 
industry, now we subcontract 95 percent of the work to union 
members who are now entrepreneurs running their own businesses, 
every one of them came up through some type of apprenticeship 
program.
    They are not liberal arts graduates. They came up through 
the apprenticeship program, and they are entrepreneurs, and 
they are doing quite well. Mr. Haller, as you are well aware, 
the Biden Department of Labor is currently seeking to finalize 
an unclear and overly restrictive independent contractor rule 
that would make it significantly more difficult for individuals 
to work as independent contractors.
    It would have a devastating impact on millions of workers, 
and thousands of businesses. Additionally, we talked about this 
the radical NLRB has recently finalized a rule to adopt a more 
expansive definition of joint employment.
    How would the independent contracting and joint employment 
provisions that you had mentioned the Employee Rights Act, of 
which we authored, impact the ability of American entrepreneurs 
and workers to climb the socioeconomic ladder?
    Mr. Haller. Thank you, Mr. Allen, for the question, and 
thank you for your leadership on the Employee Rights Act. As 
you mentioned, the provision in that legislation that we 
strongly support would allow for franchising to continue to 
thrive, and we have countless stories in franchising where 
workers have gone on to eventually become franchise owners 
themselves.
    Our issue with this discussion, and these issues is really 
not with unionizing. You can have collective bargaining, 
without having a broad joint employer standard, right? You just 
cannot have joint employer and franchising. They cannot co-
exist.
    The joint employer provision in the Employee Rights Act, 
would allow people like Tam Kennedy, who I talked about in my 
testimony and countless others, to go from the entry level to 
become franchise business owners and get that support that 
franchisees say that they need from the franchisor to become 
and stay successful small business owners.
    We appreciate your leadership and the Committee's 
leadership on that issue.
    Mr. Allen. Mr. Vernuccio, did I pronounce that correctly?
    Mr. Vernuccio. You did, thank you.
    Mr. Allen. Good. All right. In August, President Biden's 
NLRB gutted workers' rights to decide union representation by 
secret ballot vote, by issuing a decision to make it easier to 
conduct card check union campaigns. Do you think card-check 
elections create an unfair election environment?
    Mr. Vernuccio. Thank you for the question, Mr. Allen, and 
thank you for your leadership on the Employee Rights Act. To 
answer your question, no, because there is no election 
environment. Card check bypasses an election and allows for 
unions to have an open basically petition process.
    Unfortunately, with the PRO Act and with the Cemex 
decision, unions still can tell employees you will have an 
election, but then the rug is pulled out from under the 
workers. Even though they have an election, unions can say 
well, there was an unfair labor practice, or the employer 
violated a portion of election law, and say recognize this via 
cards, and with the new Cemex decision.
    The NLRB could then recognize the union. This is why your 
provision in the Employer Rights Act is so important.
    Mr. Allen. Yes, and the secret ballot is a long-time 
important tool in our culture, and as far as currently labor 
unions have essentially unchecked access to workers personal 
information. Are you aware of the examples for labor unions 
misuse, workers private information, and how would the Employer 
Rights Act help to put a stop to this occurring? We have 9 
seconds.
    Mr. Vernuccio. Yes. There has been testimony in this 
Committee on unions harassing workers at home repeatedly coming 
even after the worker says please do not come to my house. The 
Employer Rights Act would protect workers privacy by giving 
them the option to choose what piece of personal information to 
give unions.
    For instance, if they did not want a union coming to their 
home, they could say just email me.
    Mr. Allen. Good. Thank you for your testimony. Chairman, I 
yield back.
    Chairman Good. Thank you, Mr. Allen, and now we will go to 
Representative Jayapal from Washington for 5 minutes.
    Ms. Jayapal. Thank you, Mr. Chair. Let us just talk about 
the State of the American workforce under the Biden 
administration. The administration has created over 14 million 
jobs, kept unemployment under 4 percent for the longest time in 
nearly 50 years, and delivered the most pro-worker agenda in 
modern history.
    This year we have seen a record number of workers standing 
up against corporate greed to fight for better rights on the 
job, good benefits, and fair wages. My Republican colleagues 
are doing everything they can to distract you from those very 
critical facts on the ground, and from the fact that they 
haven't done anything for workers or jobs this session.
    Instead, they are just planning to attack workers' rights. 
Well, I represent a very strong union town, the third most 
union-dense State in our country, and we know in our State that 
unionization is fundamentally about workplace democracy, about 
the right to organize and that worker power helps not just 
workers, but our whole economy.
    Our state's strong economic status tied to unionization is 
testament to that. Now I want to focus on the issue of 
misclassifying employees as independent contractors. This June, 
the NLRB issued a pro-worker decision that rightfully reversed 
a Trump era policy that allowed companies to misclassify their 
employees as independent contractors. Let us just get some 
facts on the table.
    Mr. Griffin, I want to ask you about specific protections 
and benefits that are at stake when workers are misclassified 
as independent contractors instead of employees, so a couple of 
quick, yes/no question. Are independent contractors guaranteed 
the minimum wage?
    Mr. Griffin. No.
    Ms. Jayapal. Are independent contractors covered by 
unemployment insurance?
    Mr. Griffin. No.
    Ms. Jayapal. Are independent contractors covered by family 
and medical leave?
    Mr. Griffin. No.
    Ms. Jayapal. Are independent contractors covered by health 
and safety protections?
    Mr. Griffin. No.
    Ms. Jayapal. Tell us briefly, what employers stand to gain 
by intentionally misclassifying workers and what does it cost 
Americans in terms of lost wages?
    Mr. Griffin. Well, there has been studies, the EPI study 
that has been before this Committee before that talks about the 
billions of dollars that are lost, not just in wages that ought 
to be paid to the individual but in revenues that ought to come 
to the government pursuant to those, the taxes supporting those 
benefits that you are talking about.
    The primary thing is that you do not have any rights at all 
to organize, bargain collectively, and improve your lot.
    Ms. Jayapal. That is right, so, there is an economic 
benefit, but there is also an overall benefit to what you do 
not have to provide for workers when they organize.
    It is clear that misclassifying benefits, and intentionally 
misclassifying their workers as independent contractors, allows 
employers to rob workers of critical benefits and protections 
that they are entitled to under the National Labor Relations 
Act. Mr. Griffin, can you elaborate on that?
    Mr. Griffin. Yes. It is very clear that the Act covers, 
gives rights to employees as defined in the statute, and there 
is an exception from the employee definition for independent 
contractors. If you are an independent contractor, you do not 
have the rights under the statute.
    Ms. Jayapal. From the United Auto Workers to Kaiser 
Healthcare employees, to writers and actors, nearly half a 
million workers across America have exercised their right to 
strike this year.
    Through their collective power, unionized workers have 
secured record contracts that have dramatically raised wages 
and increased benefits, ensuring that workers finally get their 
fair share of corporate profits, none of which would be 
possible without the workforce that generates those.
    Mr. Griffin, since misclassified workers lack protections 
to organize and strike, what impact would unchecked 
misclassification have on the labor movement and on the ability 
of the broader American workforce to secure better pay and 
benefits?
    Mr. Griffin. Well, at least as a legal matter, if you are 
an independent contractor as I said before, you are not 
protected by the rights to act concertedly, form a union, and 
bargain collectively. In fact, there are some anti-trust 
questions that arise if independent--real independent 
contractors, separate businesses, get together to collaborate, 
that raises anti-trust concerns.
    There is a labor exemption to the anti-trust laws, and if 
you are doing it as an employee, part of a union to achieve 
certain things, there is not the same anti-trust issue. 
People's rights are very much curtailed if they are 
misclassified.
    Ms. Jayapal. It is unacceptable that my Republican 
colleagues want to chip away at these pro-worker policies, and 
it is our duty to stand with workers who buildup our economy. 
Mr. Chairman, I request unanimous consent to enter into the 
record a letter from the Child Labor Coalition opposing the 
Employee Rights Act, the Modern Worker Empowerment Act, and the 
Save Local Business Act.
    Chairman Good. Without objection, and the gentlelady's time 
has expired.
    Ms. Jayapal. Thank you. I yield back.
    [The information of Ms. Jayapal follows:]
   [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Chairman Good. We will now recognize Mr. Burlison from 
Missouri for 5 minutes.
    Mr. Burlison. Thank you, Mr. Chairman. Mr. King, it has 
often been said that workers who are in the right to work 
states, if they are in a union that they are probably not 
happy, or they are less happy, but studies have indicated that 
actually union labor workers in right to work states are 
actually when surveyed, are more satisfied with their job than 
in the non-right to work states. Have you seen that data?
    Mr. King. Yes I have, Congressman, and just to also build 
on that point, 94 percent of the workers in this country that 
are working under a union contract today, never had the 
opportunity to vote whether they wanted that union to represent 
them, or any union to represent them.
    The problem we have here is this hierarchy of control, this 
confrontation strategy. UAW strike has been mentioned, it is 
going to add up to $900 to $1,000.00 per automobile on the 
consumer. Ask the question a few years from now whether the 
American public is going to accept that, so back to your basic 
question.
    Employees want flexibility. They want the right to choose. 
They do not want to be forced into any particular situation.
    Mr. Burlison. If they, you know, if they are not pleased 
with the union that is representing them, they have to take 
drastic steps to remove that union. The unions enjoy a 
privilege that most businesses do not.
    They enjoy the privilege of having a monopoly power when it 
comes to being the bargaining unit.
    Mr. King. Well, that is correct. Once a bargaining unit is 
certified by the National Labor Relations Board, that unit 
stays in place at that place of business for the life of that 
business essentially, so it is a lifetime decision. The worker, 
the employee, has no choice. She or he is stuck in that 
environment.
    It is not a good situation for anyone. If the union clearly 
has majority support, so be it, but do not force the decision 
on the employee.
    Mr. Burlison. Mr. Vernuccio, it is often talked about that 
when you hear the arguments from the other side of the aisle 
that union workers should be paying the dues because they are 
being represented. They have whether it is through bargaining 
or legal representation, you have heard these arguments before. 
Do you agree with these arguments?
    Mr. Vernuccio. I do not. It is unfair to force 
representation on a worker, and it is even more unfair to force 
that worker to pay for unwanted representation. As Mr. King 
just pointed out, even in right to work states they are forced 
to accept union representation, whether they want it or not, 
thank you for the question.
    Mr. Burlison. Yes, and if they want to negotiate on their 
own behalf, they are prohibited from doing that. Correct?
    Mr. Vernuccio. Under current law that is correct.
    Mr. Burlison. OK. Which is why I am filing a bill today 
called the Workers Choice Act, and to address this issue 
because I mean I think that an individual, and in fact, I know 
a family member who is in this situation that he is in, he is 
not pleased with his union. He sees the people outside of that 
organization able to negotiate and bargain, and get better pay, 
better you know conditions, and yet he does not have that 
authority to do that, but this bill will give that worker back 
the authority.
    Mr. Vernuccio. Mr. Burlison, thank you for the question, 
and thank you for your leadership on the Workers Choice Act. 
That is exactly what it would do, it would give individual 
workers, under a unionized contract in right to work states, 
the flexibility to represent themselves, something that over 93 
percent of the rest of private sector workers in the economy 
can do already if they are not under a unionized workplace.
    Mr. Burlison. This should dispel all the arguments that are 
said about, you know, the unions have to take the money because 
they have to represent that individual. Well, this--if you do 
not want to represent people that are not paying dues, this is 
your--this is the solution to your complaint.
    Mr. Vernuccio. It is more fair to workers and it is more 
fair to unions, and I applaud you on your leadership, thank 
you.
    Mr. Burlison. Thank you. You know, and I will say in our 
State we have seen a diminished number of union representation. 
I have seen that because of the economic growth in the nearby 
states, even union representation actually goes up, even in the 
right to work states.
    Mr. Vernuccio. That is correct. Right to work means unions 
have to provide better services to their membership to keep 
that dues money flowing.
    Mr. Burlison. Thank you, my time has expired.
    Chairman Good. Thank you, Mr. Burlison. We will now 
recognize Mr. Smucker from Pennsylvania for 5 minutes.
    Mr. Smucker. Thank you, Mr. Chairman, for holding this 
hearing today. Just by way of background, I was a construction 
company owner for 25 years. Non-union, but went through several 
union organizing campaigns. I am passionate about ensuring that 
those workers can earn a wage where they can provide for their 
family, and live their own American dream.
    I think unions have a role to play, but I think workers 
should have a choice, and too often what I have seen, and what 
you are hearing I think today is unions instead of convincing 
workers through having better opportunity, you are seeing 
massive donations going to politicians to try to gain the 
system to force workers to become part of unions, when most 
workers today do not want that.
    Back to that discussion on independent contractors that Ms. 
Jayapal was talking about. I really think that many folks just 
would want to do away with independent contractors to force 
more people into unions. I know in my area there are a lot of 
people to work in that way because they want to be able to 
negotiate, to do better for themselves, to decide who they want 
to work for, so the independent contractor--while I agree that 
it should be well-defined.
    In fact, I was in the State legislature in Pennsylvania, 
and one of the first things we did--Pennsylvania needed some 
updated definition to ensure that companies were treating 
independent contractors and classifying them similarly, so I 
worked with unions to help to advance a better definition of 
independent contractor, but we are about a free economy where 
everyone should have choice.
    What I saw in 25 years in the construction industry, there 
was sort of an inverse relationship with government 
interference in business, government interference in the 
economy over regulation. We need regulation, but over 
regulation and growth, the inverse relationship, the higher the 
regulation the harder it is to do business, the harder it is 
for workers to make decisions that for themselves, and the less 
economic growth and opportunity that we have.
    I want to talk just a little bit, Mr. Vernuccio. This issue 
has not been brought up here today yet, but that is the update 
to the Davis Bacon Act that is being proposed. I filed a 
joint--congressional joint resolution of disapproval, along 
with 23 members. Never made sense to me that in all of our free 
markets, you picked construction, and that is an industry where 
the wage should be set by the government.
    It makes no sense whatsoever, and what it does, not only it 
is not just about increasing wages, but there is so much more, 
so many more requirements for business, so it completely shuts 
out some smaller companies, maybe independent contractors who 
could work in those jobs, or bid for those jobs, whatever it 
may be.
    It is certainly a detriment to many smaller companies who 
are not able to comply with the regulations. It also increases 
costs, just the inefficiency of that system increases costs, so 
at a time when we are talking about record deficits, an 
increase in the Davis Bacon wages based on faulty promises will 
increase costs for the taxpayers.
    Studies show that the rule could increase a project's cost 
by as much as 7 percent, and like I said, it will stifle 
competition. Mr. Vernuccio, your organization has endorsed this 
regulation. I am grateful for that. Could you tell me why this 
is such a bad idea? Could you talk just a little bit more about 
that?
    Mr. Vernuccio. Sure, Mr. Smucker and thank you for your 
leadership on protecting small business, especially small 
construction business. Going back to the independent 
contracting relating to the Davis Bacon rule, there is a good 
study from the U.S. Chamber of Commerce, the Biden 
administration whole of government approach to promoting labor 
unions, and that's where really all of this is coming from.
    In relation to the Davis Bacon rule specifically, we do not 
approve of the regulation. It encourages bad survey data. It 
eliminates the distinction between rural and urban work. It 
harms small business. It puts its thumb on the scale for a 
small minority of construction firms.
    Mr. Smucker. Mr. Vernuccio, I am going to interrupt you. I 
only have 20 seconds. I just wanted to make one additional 
point on another issue, and this is in regards to the 
franchisees. The Joint Employer Rule, I have talked to the 
franchisees in my community, who are really concerned about 
this, and are concerned whether they can stay in business in 
this model.
    The question I had, Mr. Haller for you, and you probably 
will not have time to answer it, but this is going to really 
impact our communities if franchisees are forced to close as a 
result of the rule, and we do not know yet exactly what the 
outcome will be, but it is certainly one of concern.
    I am very concerned about the impact on our local 
communities, and the impact on our workers, and sorry you do 
not have a chance to respond to that, but thank you Mr. 
Chairman.
    Chairman Good. Thank you, Mr. Smucker. We will now 
recognize Mr. Moran from Texas for 5 minutes.
    Mr. Moran. Mr. Haller, I am going to pick up where Mr. 
Smucker just left off, and I am going to give you a chance to 
answer those questions because that is exactly what I wanted to 
talk to you about was the benefits of the franchise model, what 
this Joint Employer Rule that has been put in place by the NLRB 
is going to do to franchises, and frankly, other businesses as 
well.
    Let us start generally with the franchise model. Talk about 
some of the benefits about the franchise model, and why folks 
choose to become franchise owners?
    Mr. Haller. Well, I appreciate the question, Mr. Moran, 
thank you also, Mr. Smucker. Not everyone is going to be Elon 
Musk or Jeff Bezos. Some people may want support and still want 
to be a small business owner, and that is exactly what the 
franchise business model does.
    It allows anyone from anywhere to go into business for 
themselves, but not by themselves. The franchisor's job is to 
give that franchisee the tools and the resources and the 
support, marketing and a brand, and in exchange for a fee, and 
an ongoing royalty, the franchisee essentially has a playbook, 
and also a peer network of other franchisees running that same 
business in their local community.
    In franchising, generally 94 percent of the money stays in 
that local community, outside of the royalty that's sent back 
to the franchisor. Franchisor is not in the business of 
employing individuals at that business. The franchisee 
understands the local market, they support local charities and 
things like that. That is the essence of building the American 
dream through the franchise model.
    Mr. Moran. Yes. You used the term American dream there, and 
I was going to mention that. It really is one of the best ways, 
best pathway to the American dream, and a lot of folks access 
that because they do not have a whole lot of capital up front 
to invest and begin their businesses, but through the franchise 
model somebody that is already established kind of a way of 
doing business, and has it, bringing out there can help them 
get started, and then they can run it locally.
    As a result of that with those local connections, those 
local work, the local effort, and attention, they can become 
successful business owners in their own right, rather than 
having to have tons of capital upfront. Is that accurate?
    Mr. Haller. That is accurate.
    Mr. Moran. What are some of the major beneficiaries of the 
franchise business model?
    Mr. Haller. Well, as I mentioned in my testimony, 
franchising has greater rates of ownership among women, among 
veterans, among minorities on immigrants. It is given this 
incredible pathway for anybody from anywhere to come to this 
country or be in this country for a represented community, and 
own and operate a small business by partnering with the right 
brand.
    Mr. Moran. Those are folks that we want to provide a 
pathway to ownership in the business world, at least from my 
perspective. I want to see folks that maybe have had a 
disadvantaged opportunity in the past to be able to 
successfully move on and to climb the ladder of success in 
America, and achieve that American dream.
    I think the franchise model is a great way to do that. I 
know that Oxford Economics released research on franchising 
that said that nearly one-third, 26 percent of franchises are 
owned by minorities, compared with 17 percent of independent 
businesses on average.
    Black owned franchises earn 2.2 times more than black owned 
independent businesses. Hispanic owned franchises earn 1.6 
times more than Hispanic owned independent businesses, and 
Asian owned franchises earn 1.4 times more than Asian owned 
independent businesses. Those seem like good statistics to me. 
What do you think?
    Mr. Haller. I would agree those are good statistics, 
Congressman, and I think, as I mentioned in my testimony, these 
are all the things that are at risk with respect to this Joint 
Employer Rule that 800,000 franchise locations are facing in 
each and every one of your districts.
    Mr. Moran. Yes, this new Joint Employer Rule by the NLRB 
starts using what I believe are vague, ambiguous, kind of 
overly broad terms that are going to effectively make everybody 
a joint employer in a franchise relationship, and beyond that 
in a number of other relationships as well.
    It hurts the independent contractor relationship certainly, 
but tell me a little bit about what you see in the Joint 
Employer Rule that is going to ruin the franchise business 
model?
    Mr. Haller. Well, it moves the goalpost in the middle of a 
10-or 20-year franchise relationship between the brand and the 
franchisee. Businesses want a bright line test. The NLRB admits 
this rule will be applied on a case-by-case basis over God 
knows how long, and the NLRB has proposed a standard based on 
unexercised control of a non-exclusive list of actions.
    As I mentioned in my testimony, I encourage anybody to ask 
the NLRB what does this mean?
    Mr. Moran. Yes, and it is interesting, I was thinking about 
it yesterday because when one of these factors that may be an 
indirect control, and we do not even know how expansive that is 
going to be, or this new set of essential terms and conditions, 
which now is broader and broader and broader under the NLRB 
rule.
    When one of those exists, now the franchisor will be deemed 
to be the employer of record along with the franchisee. Well 
now the franchisor is going to have to exercise broad control 
over every little detail that goes on, and effectively that 
relationship is going to be severed between the franchisor and 
the franchisee is going to be combined.
    Mr. Haller. We call it move over, I will drive, and that is 
not why an individual got into the franchise business model.
    Mr. Moran. Yes, and I think it is contrary to the American 
dream. Contrary to the rules of capitalism, and with that, I 
would yield back.
    Chairman Good. Thank you, Mr. Moran. I will recognize the 
Ranking Member, Mr. DeSaulnier for 5 minutes.
    Mr. DeSaulnier. Thank you, Mr. Chairman. Excuse me, I am 
struggling with a cold. California and Washington with the cold 
weather. I should wear a hat when I go out. I just have one 
comment about where the money goes in campaigns. According to 
Open Secrets, business entities and wealthy people outspend 
unions 16 to 1, so this idea that unions are disproportionately 
affecting campaigns is just sort of strange.
    There should be a balance. I do not have a problem with a 
balance, but that is not the reality. 16 to 1, and just the 
Koch network spent 6.5 billion dollars in the last three 
elections as opposed to the union movement. That has to me, a 
direct correlation in line to our income inequality in this 
country, which is not good for anybody, including wealthy 
people.
    Mr. Griffin, we have heard a lot about flexibility and 
choice. Maybe you could talk about flexibility and choice if 
the union movement was weakened or is not strengthened further. 
What does a Walmart worker do when they do not have a 
bargaining unit as opposed to a Safeway worker or a Costco 
worker who has a bargaining unit who, granted by a democratic 
process, has people to bargain for them?
    Mr. Griffin. Well, the default option is that the employer 
dictates the terms and conditions of employment. The 
fundamental principle under the National Labor Relations Act, 
which is found in Section 1, is the individual worker is 
insufficiently powerful to bargain with a large corporate 
entity to improve his or her terms and conditions of 
employment. That's why people have to get together, form a 
union, so that they can jointly work to improve their economic 
situation and that the power of the group gets you there.
    I also, if I may, there has been a discussion about the 
exclusive representation principle, and I point out that this 
body is a perfect example of the exclusive representation 
principle. If a Democrat wins an election with 52, 48 percent 
of the people voting against them, that 48 percent of the 
people who did not get their choice live with their 
representative for the next 2 years, and they get another 
chance.
    Similarly, there is an opportunity, contrary to what has 
been said here. Every time that a contract comes up there is an 
open period during which a decertification petition can be 
filed and people can have an opportunity to vote. I wanted to 
dispel some representations that have been made here today that 
do not bear any relation to what the actual law is.
    Mr. DeSaulnier. We have also heard some comments about 
monopolies in the labor movement. Let us talk a little bit 
about the balance between global monopolies. Labor unions have 
to be stronger if they want to--the UAW has showed that and had 
impact on the manufacturers who do not have UAW contracts.
    Could you talk a little bit about the global economy has 
been beneficial in some ways, but it is clearly concentrated 
wealth and monopolistic power and unions have to balance it 
somehow.
    Mr. Griffin. The whole purpose of the National Labor 
Relations Act, the whole purpose of the labor movement is to 
improve the lot of working people, and the only way to do that 
is to be sufficiently powerful to be a counterbalance to the 
organized power of capital.
    If you have a small labor movement, and the statistics are 
very clear on that as the number of organized workers have gone 
down, the increase in wealth disparity in this country and the 
concentration of wealth in the top 1 percent has gone in the 
other direction. That is irrefutable.
    There really is no other force in society that works to 
distribute the wealth equally among the people who are 
responsible for producing it.
    Mr. DeSaulnier. Yes. That was Roosevelt, the Republican 
Roosevelt who talked about the malefactors of great wealth, and 
Franklin Roosevelt obviously, in spite of some other comments, 
was a great--both Roosevelts were great advocates for working 
people.
    Mr. Griffin let us talk a little bit about the PRO Act in 
the same context of both previous questions, flexibility, and 
the need to adapt an employer/employee relationship to this 
change because of the concentration of wealth.
    Mr. Griffin. Well, I think the PRO Act, one of the issues 
with respect to the NLRB's ability to enforce the law is that 
the remedies under the National Labor Relations Act are not 
sufficiently powerful, and so the PRO Act does a number of 
things in particular.
    It enhances the ability of the Board to seek injunctive 
relief for violations, and so I think the PRO Act would be a 
very effective piece of legislation in addressing some of the 
disparities that we see.
    Mr. DeSaulnier. Thank you, Mr. Chairman, I yield back with 
10 seconds over.
    Chairman Good. Thank you to our distinguished Ranking 
Member, and I now recognize myself for 5 minutes. Mr. 
Vernuccio, my Small Businesses Before Bureaucrats Act, which I 
know you are familiar with, and this Committee passed 
yesterday, would update the jurisdictional standards to reflect 
modern revenue levels, and allow these standards to adjust each 
year with the size of the economy.
    As you know well, those standards have not been updated 
since 1958, some 65 years ago. My bill would raise the 
threshold to $5 million for retail businesses, and $500,000.00 
for non-retail businesses, and those would grow with the 
economy in subsequent years.
    Ultimately this bill would decrease the number of 
businesses that would fall under the NLRB's jurisdiction and 
enable them to operate without the threat of the NLRB imposing 
mandates upon them. It is estimated that about 50 percent of 
retail and non-retail businesses would be exempt, and relieved 
from the NLRB's jurisdiction.
    As you also know, in absence of NLRB jurisdiction, a myriad 
of laws still covers small businesses and employee 
relationships, and without the NLRB employees and employers 
must work together to resolve any issues relating to 
compensation, benefits or safety and so forth.
    Would you say that there has been advances and changes in 
the way that businesses operate in our economy in the workforce 
since 1958, and maybe we should increase those thresholds?
    Mr. Vernuccio. Mr. Chairman, thank you for the question, 
and thank you for your leadership. Once again, protecting small 
businesses. I would absolutely say that between the rampant 
inflation that we are seeing now under Bidenomics, and advances 
in technology, and inflation in general, there have been 
drastic changes since 1958.
    Chairman Good. Yes. I would agree with that assessment. 
Well, given your background with working on helping employees 
of all businesses, and particularly those small businesses, do 
you think the NLRB intervention is necessary for the success of 
a small business?
    Mr. Vernuccio. For the success of a small business, 
especially those where you are recommending minimums of $5 
million in retail, $500,000.00 in non-retail, those are very 
small businesses. They would need armies of H.R. and attorneys 
to comply with, especially the new proposed rules, coming out 
of the NLRB, especially from some of the recommendations by the 
NLRB's General Counsel, and some of the memos that she has 
written, so exempting those small businesses would go a long 
way to alleviating some of that burden.
    Chairman Good. Thank you. Mr. King, you spoke earlier about 
how the current President has left vacant the position on the 
Board, actually the expiration of the Republican member's term 
from a year ago. What do you think that motivation might be for 
him to leave that open for a year?
    Mr. King. To push the NLRB's very radical agenda that can 
get cases out faster. They can bypass thoughtful thinking, that 
may not agree with the majority's opinion, and frankly, Mr. 
Good, the NLRB keeps coming back to the Congress asking for 
more money. Maybe it is time to put the onus on the 
administration to say no more money, and indeed maybe less 
money unless you equalize the representation of Republicans and 
Democrats on the Board.
    Chairman Good. The NLRB has become a more hyper partisan 
organization I would submit, and what would you say the impact 
has been for not having that additional Board member, that 
Republican member?
    Mr. King. It has permitted a much more aggressive agenda, a 
quicker agenda to go through because there is only one 
Republican to contest some of these very radical theories, and 
it also has permitted, I would suggest, a very, very radical 
approach to our labor laws, frankly.
    Chairman Good. How unusual was it for the President to come 
in on the first day in office, or 1 day after he took office, 
to fire the General Counsel Peter Robb, who still had 11 months 
left in his term?
    Mr. King. It was the first thing this President did. His 
first official act was to remove the Republican General 
Counsel. That had never happened in the history of the National 
Relations Act. The bottom line here, the NLRB has become a 
political arm of the White House. It is not adjudicating 
matters in a fair and neutral way, and the recent cases 
certainly support that conclusion.
    Chairman Good. Yes. I would agree, ultimately Jennifer 
Abruzzo came to fill the seat. In a political article, a former 
AFL-CIO official said that she is the best General Counsel we 
have seen in a very, very long time. She is trying to make sure 
that the NLRB takes on the activist role it is supposed to take 
on.
    The President is obviously, intentionally, as you noted, 
using the Board as an activist organization to make good on his 
labor promises, and I would submit that as hurting small 
businesses and employees across the country.
    Well with that, I will go to the Ranking Member for a 
closing statement.
    Mr. DeSaulnier. Thank you, Mr. Chairman. Mr. King, one 
thing I will agree with you, it is unfortunate that we cannot 
get appointees done, between the administration and the Senate, 
and I will point to the U.S. Supreme Court in the last 20 years 
where I do not feel like those appointments have been done 
traditionally, so I would agree with you in that instance. If 
the environment was better between our parties and our politics 
in this country, we would go back to an era where there would 
be respect for procedure and for ideological differences.
    I do want to--one point as, an interesting study from 
Brookings actually did with a journal about productivity and 
wages in Republican and Democratic districts, and heavy density 
union ones. One of the really key things, as a former small 
businessperson, productivity in dense union districts in 
Congress from 2008 went from 118,000 per unit to 139,000. This 
is Brookings and the Wall Street Journal.
    Whereas opposed in Republican districts that have low union 
density is stuck at about 110,000, so that we can argue 
statistics, but there is a good argument. As a former small 
businessperson, who has a cold, that in raising people's wages 
and benefits, look at--that is nice, the Chairman gave me 
water.
    Would one of our Democratic staffers test this, no, no, 
only kidding. No, no, no, might be bad for both of us Bob. 
Anyway, the context of this, as I said at the last hearing, is 
where do we get this balance between employers and capital, and 
concentration of wealth and workers.
    I would argue that unions as human institutions are 
imperfect, just like corporate entities, and right now, that 
balance is way disproportionate in my view and perspective. A 
lot of it too is around employers, whether they are union or 
non-union, who stick by the rules, and I wish we would get back 
to that discussion based on rational ideas--not ideological 
perspective, but as much research and analysis as possible that 
allows for differences in the regions as long and as well as 
personal experience.
    In my view, it is absolutely imperative right now that the 
labor movement, and it is encouraging to see that the Americans 
have responded in poll after poll, that they do not know the 
specifics, but they can see how it impacts their disposable 
income, and their ability to educate their kids, have a 
retirement, and have a house that they can live in and still 
have discretionary income.
    As a former retailer, a point-of-sale retailer, I can tell 
you when workers make more, employees and small businesses make 
more. There is more disposable income. We know through Stiglitz 
or Pikety, that working people spend more money and put more 
money into the economy, which benefits the middle class.
    If you have a lot of money that you cannot spend, as much 
money in the economy. All of that being said, you have to have 
that countervailing institution that we have known for some 
time, for wages, and that is the American labor movement.
    The labor movement is surging, but just as workers have 
urged their government to protect their rights, Committee 
Democrats have urged the majority in Congress to support the 
Protecting the Rights to Organize, or the PRO Act, and Theft 
Prevention Wage and Recovery Act, and Protecting Children Act 
to name a few.
    This is the kind of legislation that we could negotiate and 
talk about from our perspective and a healthier institution to 
benefit everybody and be respective of businesses. The Chairman 
and I both have a background in small business, but we approach 
this very differently.
    I think if we looked at those kinds of protections, we 
could do what we just did on the Workforce Investment Recovery 
Act that was a compromise, and was negotiated in good faith, 
particularly between the Ranking Member and the Chair to get a 
work product that would protect everybody and be more 
reflective of both of our districts and all of our districts, 
and with that I yield back.
    Chairman Good. Thank you, Mr. DeSaulnier. Today we have 
heard how the NLRB is chipping away at long-standing employee 
rights that reduce and limit freedom. Republicans are united in 
fighting for more freedom for Americans, including employees, 
gig workers, self-employed individuals and small business 
owners.
    We actually believe that the American people are on the 
experts on their vocation, their talents, their finances, and 
their family. Our laws and regulations are and must be centered 
on protecting the freedom of choice to work in the profession 
that Americans are called to, under the terms they choose to 
freely and independently build their lives.
    These principles are the underpinning of the American 
dream, and we must fight to preserve them. The alternate 
ideology suggests that employees are too dumb to know what they 
want, and they need the government to take care of them because 
all employers wake up in the morning seeking to abuse and 
exploit their employees.
    Americans do not want or need the Federal Government giving 
them advice on how a business should operate. I appreciate what 
Mr. Haller said earlier that only 14 percent of franchisees 
would open a business if the Joint Employer Rule was in effect. 
What a sobering statistic.
    Mr. King also noted the NLRB has reversed precedent in 
nearly 5,000 cases recently, and overturned 100 years of 
precedents, making it nearly impossible for employees or 
employers rather, to comply to know how to operate their 
business under this biased, hyper-radical NLRB.
    Under the Biden administration, the NLRB has damaged its 
reputation as independent and neutral, and again I appreciate 
the recommendation that Mr. King made of a policy change that a 
departing member from the Board should continue to serve until 
they are replaced so that we wouldn't suffer under the shortage 
that we suffer under today.
    The General Counsel for the NLRB, Ms. Abruzzo, has again 
made no effort to hide her extreme, pro-union agenda, and she 
has undermined the National Labor Relations Act and the 
process. I will repeat the quote that I said earlier from the 
AFL-CIO political director who said she is the best General 
Counsel they have seen in a very, very long time. She is trying 
to make sure that the NLRB takes on the activist role it is 
supposed to take on.
    After hearing the accounts today, I hope we can move 
forward with the legislative ideas that reduce invasive 
government overreach in the NLRB, and further diminish harmful 
union influence and facilitate, employ privacy and choice.
    I ask unanimous consent to submit the following letters of 
support into the record from the International, excuse me, 
Intermodal Association of North America, Americans for 
Prosperity, American Hotel Lodging Association, Associated 
Builders and Contractors, Flex, Tech Net, the National Retail 
Federation, and a letter from the Coalition for a Democratic 
Workplace, 72 organizations from various industries signed 
onto.
    Without objection, that is so ordered.
    [The information of Mr. Good follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Chairman Good. Without objection, there being no further 
business, the Committee stands adjourned.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    [Whereupon, at 11:58 a.m., the Committee was adjourned.]

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