[Congressional Record Volume 145, Number 78 (Thursday, May 27, 1999)]
[Extensions of Remarks]
[Pages E1119-E1120]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 INTRODUCTION OF THE FAIR ACCESS TO INDEMNITY AND REIMBURSEMENT (FAIR) 
                                  ACT

                                 ______
                                 

                        HON. WILLIAM F. GOODLING

                            of pennsylvania

                    in the house of representatives

                         Thursday, May 27, 1999

  Mr. GOODLING. Mr. Speaker, I rise today to introduce a bill that will 
level the playing field for small businesses as they face two 
aggressive federal agencies with vast expertise and resources--the 
National Labor Relations Board (NLRB) and the Occupational Safety and 
Health Administration (OSHA). The Fair Access to Indemnity and 
Reimbursement Act--the FAIR Act--is about being fair to small 
businesses. It is about giving small entities, including labor 
organizations, the incentive they need to fight meritless claims 
brought against them by intimidating bureaucracies that sometimes 
strong-arm those having limited resources to defend themselves.
  The FAIR Act is similar to Title IV of my Fairness for Small Business 
and Employees Act from last Congress, H.R. 3246, which passed the House 
last March. This new legislation, however, amends both the National 
Labor Relations Act (NLRA) and the Occupational Safety and Health Act 
(OSH Act) to provide that a small business or labor organization which 
prevails in an action against the Board or OSHA will automatically be 
allowed to recoup the attorney's fees it spent defending itself. The 
FAIR Act applies to any employer who has not more than 100 employees 
and a net worth of not more than $7 million. It is these small entities 
that are most in need of the FAIR Act's protection.
  Mr. Speaker, the FAIR Act ensures that those with modest means will 
not be forced to capitulate in the face of frivolous actions brought by 
the Board or OSHA, while making those agencies' bureaucrats think long 
and hard before they start an action against a small business. By 
granting attorney's fees and expenses to small businesses who know the 
case against them is a loser, who know that they have done nothing 
wrong, the FAIR Act gives these entities an effective means to fight 
against abusive and unwarranted intrusions by the Board and OSHA. 
Government agencies the size of the NLRB and OSHA--well-staffed, with 
numerous lawyers--should more carefully evaluate the merits of a case 
before bringing a complaint or citation against a small business, which 
is ill-equipped to defend itself against an opponent with such superior 
expertise and resources. The FAIR Act will provide protection for an 
employer who feels strongly that its case merits full consideration. It 
will ensure the fair presentation of the issues.
  The FAIR Act says to these two agencies that if they bring a case 
against a ``little guy'' they had better make sure the case is a 
winner, because if the Board or OSHA loses, if it puts the small entity 
through the time, expense and hardship of an action only to have the 
business or labor organization come out a winner in the end, then the 
Board or OSHA will have to reimburse the employer for its attorney's 
fees and expenses.
  The FAIR Act's 100-employee eligibility limit represents a mere 20 
percent of the 500-employee/$7 million net worth limit that is in the 
Equal Access to Justice Act (EAJA)--an Act passed in 1980 with strong 
bipartisan support to level the playing field for small businesses by 
awarding fees and expenses to parties prevailing against agencies. 
Under the EAJA, however, the Board or OSHA--even if it loses its case--
is able to escape paying fees and expenses to the winning party if the 
agency can show it was ``substantially justified'' in bringing the 
action.
  When the EAJA was made permanent law in 1985, the Congress made it 
clear in committee report language that federal agencies should have to 
meet a high burden in order to escape paying fees and expenses to 
winning parties. Congress said that for an agency to be considered 
``substantially justified'' it must have more than a ``reasonable 
basis'' for bringing the action. Unfortunately, however, courts have 
undermined that 1985 directive from Congress and have interpreted 
``substantially justified'' to mean that an agency does not have to 
reimburse the winner if it had any ``reasonable basis in law or fact'' 
for bringing the action. The result of all this is that an agency 
easily is able to win an EAJA claim and the prevailing business is 
often left high and dry. Even though the employer wins its case against 
the Board or OSHA, the agency can still avoid paying fees and expenses 
under the EAJA if it meets this lower burden. This low threshold has 
led to egregious cases in which the employer has won its case--or even 
where the NLRB, for example, has withdrawn its complaint after forcing 
the employer to endure a costly trial or changed its legal theory in 
the middle of its case--and the employer has lost its follow-up EAJA 
claim for fees and expenses.
  Since a prevailing employer faces such a difficult task when 
attempting to recover fees under the EAJA, very few even try to 
recover. For example, Mr. Speaker, in Fiscal Year 1996 for example, the 
NLRB received only eight EAJA fee applications, and awarded fees to a 
single applicant--for a little more than $11,000. Indeed, during the 
ten-year period from FY 1987 to FY 1996, the NLRB received a grand 
total of 100 applications for fees. This small number of EAJA 
applications and awards arises in an overall context of thousands of 
cases each year. In Fiscal Year 1996 alone, for example, the NLRB 
received nearly 33,000 unfair labor practice charges and issued more 
than 2,500 complaints, 2,204 of them settled at some point post-
complaint. Similarly, at the OSHRC, for the thirteen fiscal years 1982 
to 1994, only 79 EAJA applications were filed with 38 granted some 
relief. To put these numbers into context, of nearly 77,000 OSHA 
violations cited in Fiscal Year 1998, some 2,061 inspections resulting 
in citations were contested.
  Since it is clear the EAJA is underutilized at best, and at worst 
simply not working, the FAIR Act imposes a flat rule: If you are a 
small business, or a small labor organization, and you prevail against 
the Board or OSHA, then you will automatically get your attorney's fees 
and expenses.
  The FAIR Act adds new sections to the National Labor Relations Act 
and the Occupational Safety and Health Act. The new language simply 
states that a business or labor organization which has not more than 
100 employees and a net worth of not more than $7 million and is a 
``prevailing party'' against the NLRB or the OSHRC in administrative 
proceedings ``shall be'' awarded fees as a prevailing party under the 
EAJA ``without regard to whether the position'' of the Board or 
Commission was ``substantially justified.''
  The FAIR Act awards fees and expenses ``in accordance with the 
provisions'' of the EAJA and would thus require a party to file a fee 
application pursuant to existing NLRB and OSHRC EAJA regulations, but 
the prevailing party would not be precluded from receiving an award by 
any burden either agency could show. If the agency loses an action 
against the small entity, it pays the fees and expenses of the 
prevailing party.
  The FAIR Act applies the same rule regarding the awarding of fees and 
expenses to a small employer or labor organization engaged in a civil 
court action with the NLRB or OSHA. This covers situations in which the 
party wins a case against either agency in civil court, including a 
proceeding for judicial review of agency action. The Act also makes 
clear that fees and expenses incurred appealing an actual fee 
determination under the FAIR Act would also be awarded to a prevailing 
party without regard to whether or not the agency could show it was 
``substantially justified.''

[[Page E1120]]

  In adopting EAJA case law and regulations for counting number of 
employees and assessing net worth, an employer's eligibility under the 
FAIR Act is determined for Board actions as of the date of the 
complaint in an unfair labor practice proceeding or the date of the 
notice in a backpay proceeding. For Commission actions, eligibility is 
determined as of the date the notice of contest was filed, or in the 
case of a petition for modification of abatement period, the date the 
petition was received by the Commission. In addition, in determining 
the 100-employee limit, the FAIR Act adopts the NLRB and OSHRC EAJA 
regulations, which count part-time employees on a ``proportional 
basis.''
  Mr. Speaker, the FAIR Act will arm small entities--businesses and 
labor organizations alike--with the incentive to defend themselves 
against these two agencies. The FAIR Act will help prevent spurious 
lawsuits and ensure that small employers have the ability to 
effectively fight for themselves when they have actions brought against 
them by a vast bureaucracy with vast resources.
  If the NLRB or the OSHA wins its case against a small employer then 
it has nothing to fear from the FAIR Act. If, however, one of these 
agencies drags an innocent small employer through the burden, expense, 
heartache and intrusion of an action that the employer ultimately wins, 
reimbursing the employer for its attorney's fees and expenses is the 
very least that should be done. It's the FAIR thing to do. I urge my 
colleagues in the House to support this important legislation and look 
forward to working with all Members in both the House and Senate in 
passing this bill.

                          ____________________