[House Report 105-453]
[From the U.S. Government Publishing Office]



105th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 2d Session                                                     105-453
_______________________________________________________________________


 
         FAIRNESS FOR SMALL BUSINESS AND EMPLOYEES ACT OF 1998

                                _______
                                

 March 18, 1998.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

_______________________________________________________________________


   Mr. Goodling, from the Committee on Education and the Workforce, 
                        submitted the following

                              R E P O R T

                             together with

                             MINORITY VIEWS

                        [To accompany H.R. 3246]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Education and the Workforce, to whom was 
referred the bill (H.R. 3246) to assist small businesses and 
labor organizations in defending themselves against government 
bureaucracy; to ensure that employees entitled to reinstatement 
get their jobs back quickly; to protect the right of employers 
to have a hearing to present their case in certain 
representation cases; and to prevent the use of the National 
Labor Relations Act for the purpose of disrupting or inflicting 
economic harm on employers, having considered the same, report 
favorably thereon without amendment and recommend that the bill 
do pass.

                                Purpose

    The purpose of H.R. 3246, the Fairness for Small Business 
and Employees Act of 1998 (FSBEA), is to assist small 
businesses and labor organizations in defending themselves 
against government bureaucracy; to ensure that employees 
entitled to reinstatement get their jobs back quickly; to 
protect the right of employers to have a hearing to present 
their case in certain representation cases; and to prevent the 
use of the National Labor Relations Act for the purpose of 
disrupting or inflicting economic harm on employers.

                            Committee Action

    H.R. 3246, the Fairness for Small Business and Employees 
Act of 1998, was introduced by Representative Bill Goodling on 
February 24, 1998. Each of the four titles of H.R. 3246 is a 
bill previously introduced during the 1st Session of the 105th 
Congress. H.R. 3246 was marked-up in the Employer-Employee 
Relations Subcommittee on February 26, 1998, and was ordered 
reported to the Education and the Workforce Committee by a roll 
call vote of 7 to 3. H.R. 3246 was marked up in Full Committee 
on March 11, 1998, and ordered reported favorably by roll call 
vote (yeas 23, nays 18, not voting 4).
    Title I of the FSBEA is a narrowed version of H.R. 758, the 
Truth in Employment Act, which was introduced by Representative 
Harris Fawell on February 13, 1997. The bill currently has 120 
cosponsors. The Subcommittee on Employer-Employee Relations 
held a hearing on H.R. 758 on February 5, 1998, during which 
testimony was received on the legislation from Mr. Jay Krupin, 
partner, Krupin, Greenbaum & O'Brien, Washington, DC; Mr. 
Thomas J. Cook, employee, Omega Electric Construction Company, 
Williston, Vermont; Mr. Peter C. Rousos, director of corporate 
human resources, Gaylord Entertainment Company, Nashville, 
Tennessee, testifying on behalf of the U.S. Chamber of 
Commerce; Mr. Peter R. Kraft, partner, Kraft & Winger, 
Portland, Maine; and Mr. Patrick Parcell, member, Boilermakers 
Local 169, Dearborn, Michigan, testifying on behalf of the 
Building and Construction Trades Department, AFL-CIO.
    The Subcommittee on Employer-Employee Relations held a 
hearing on H.R. 758, the Truth in Employment Act of 1996, on 
October 9, 1997. Testimony was received on the legislation and 
on the unions' ``salting'' technique from Steven R. Weinstein, 
partner, Dunetz, Marcus, Brody & Weinstein, L.L.C., Livingston, 
New Jersey; Charles Fletcher, vice president, industrial 
relations and safety, Corey Delta Constructors, Benicia, 
California; Larry Cohen, senior partner, Sherman, Dunn, Cohen, 
Lifer & Yellig, Washington, DC, testifying on behalf of the 
AFL-CIO; Don Mailman, owner, Bay Electric Co., Inc., South 
Portland, Maine; Maurice Baskin, partner, the Venable Law Firm, 
Washington, DC, testifying on behalf of the Associated Builders 
and Contractors.
    The Committee on Economic and Educational Opportunities and 
the Committee on Small Business held a joint field hearing on 
April 12, 1996, in Overland Park, Kansas, on The Practice of 
``Salting'' and its Impact on Small Business, and heard 
testimony from Mr. BillLove, president, SKC Electric, Inc., 
Lenexa, Kansas, accompanied by SKC Electric, Inc. employee, Mr. Richard 
Oberlechner; Mr. Greg Hoberock, vice president, HTH, Co., Union, 
Missouri; Mr. Dave Meyer, vice president, secretary, Meyer Brothers 
Building Co., Blue Springs, Missouri; Mr. Robert Janowitz, esq., chair, 
labor and employment law, Group Practice, Shook, Hardy & Bacon, Kansas 
City, Missouri; Mr. William Creeden, director of organizing, 
International Brotherhood of Boilermakers, Iron Shipbuilders, 
Blacksmiths, Forgers and Helpers, Kansas City, Kansas; Mr. James K. 
Pease, Jr., Attorney-at-law, Pease & Ruhley, Madison, Wisconsin; and 
Mr. Lindell Lee, business manager, Local 124, International Brotherhood 
of Electrical Workers, Kansas City, Kansas.
    The Committee on Economic and Educational Opportunities' 
Subcommittee on Oversight and Investigations held a Hearing on 
Union Corporate Campaign Tactics, including the tactic of 
``salting,'' on October 31, 1995. Testimony was heard from Dr. 
Herbert R. Northrup, professor emeritus of management, The 
Wharton School, University of Pennsylvania, Haverford, 
Pennsylvania; Ms. Sharon Purdy, secretary/treasurer, Purdy 
Electric, Inc., Columbus, Ohio; Mr. Barry Kindt, president, 
SECCO, Inc., Camp Hill, Pennsylvania; Mr. John C. Gaylor, 
president, Gaylor Electric Co., Carmel, Indiana; Mr. Michael 
McCune, CEO, Contractors Labor Pool, Inc., Reno, Nevada; and 
Professor Risa Lieberwitz, School of Industrial and Labor 
Relations, Cornell University, Ithaca, New York.
    The Subcommittee on Employer-Employee Relations held a 
Hearing on the National Labor Relations Board (NLRB) Reform on 
September 27, 1995, which included testimony on ``salting'' and 
its impact, from Rosemary M. Collyer, former General Counsel, 
NLRB, attorney-at-law, Crowell & Moring, Washington, DC; 
Charles Craver, professor of law, George Washington University 
Law School, Washington, DC; Larry K. Durham, president and CEO, 
Durham Transportation, Inc., Austin, Texas; Mark R. Thierman, 
attorney-at-law, Theirman Law Firm, San Francisco, California; 
and David J. Tippeconnic, president and CEO, The UNO-VEN 
Company, Arlington Heights, Illinois.
    Title II of the FSBEA is formerly H.R. 1595, the Fair 
Hearing Act, introduced by Representative Harris Fawell on May 
14, 1997. The Act currently has 40 cosponsors. H.R. 1595 was 
addressed at the Employer-Employee Relations Subcommittee's 
February 5, 1998, hearing on Legislation to Provide Fairness 
for Small Businesses and Employees: H.R. 758, H.R. 1595, H.R. 
1598, H.R. 2449. Testimony on H.R. 1595 and the issue of single 
location bargaining unit determinations was heard from Mr. Jay 
Krupin, partner, Krupin, Greenbaum & O'Brien, Washington, DC; 
Mr. Peter C. Rousos, director of corporate human resources, 
Gaylord Entertainment Company, Nashville, Tennessee, testifying 
on behalf of the U.S. Chamber of Commerce; Ms. Arlene Goodman, 
president, Goodman & Company, Brentwood, Tennessee; and Mr. 
Richard Griffin, general counsel, International Union of 
Operating Engineers, Washington, DC.
    Title III of the FSBEA is formerly H.R. 1598, the Justice 
on Time Act, introduced by Representative Bill Goodling, on May 
14, 1997. The Act was addressed at the Employer-Employee 
Relations Subcommittee's February 5, 1998, hearing by witnesses 
Mr. Jay Krupin, partner, Krupin, Greenbaum & O'Brien, 
Washington, DC; Mr. Peter C. Rousos, director of corporate 
human resources, Gaylord Entertainment Company, Nashville, 
Tennessee, testifying on behalf of the U.S. Chamber of 
Commerce; and Mr. Richard Griffin, general counsel, 
International Union of Operating Engineers, Washington, DC.
    Title IV of the FSBEA is formerly H.R. 2449, the Fair 
Access to Indemnity and Reimbursement (FAIR) Act, introduced by 
Representative Harris Fawell on September 10, 1997. The Act 
currently has 38 cosponsors. H.R. 2449 was addressed at the 
Employer-Employee Relations Subcommittee's February 5, 1998, 
hearing by witnesses Mr. Jay Krupin, partner, Krupin, Greenbaum 
& O'Brien, Washington, DC; Mr. Peter C. Rousos, director of 
corporate human resources, Gaylord Entertainment Company, 
Nashville, Tennessee, testifying on behalf of the U.S. Chamber 
of Commerce; and Mr. Richard Griffin, general counsel, 
International Union of Operating Engineers, Washington, DC. 
H.R. 2449 was also brought into the discussions of labor issues 
by Employer-Employee Relations Subcommittee Chairman Harris 
Fawell at two earlier EER Subcommittee hearings: Hearing on 
H.R. 758, the Truth in Employment Act of 1996, on October 9, 
1997, and Hearing on Review of the National Labor Relations 
Board, on September 23, 1997.

                                Summary

    H.R. 3246, the Fairness for Small Business and Employees 
Act (FSBEA), is a bill containing four, narrowly-drafted titles 
addressing four specific problems with the National Labor 
Relations Act. H.R. 3246 recognizes that Congress should be 
doing everything in its power to create an environment where 
small employers can be successful in what they do best-creating 
jobs and being the engine that drives America's economic 
growth. The Act also recognizes that the National Labor 
Relations Board, which is supposed to be a neutral arbiter of 
labor disputes, is applying the NLRA in a way that not only 
harms small employers--businesses and unions--but also does a 
great disservice to hardworking men and women who may have been 
wrongly discharged.
    Title I of the FSBEA is a narrowed version of H.R. 758, the 
Truth in Employment Act, and addresses the practice of 
professional agents and union employees being sent into non-
union workplaces under the guise of seeking employment-commonly 
known as ``salting.'' This title amends the National Labor 
Relations Act to make clear that an employer is not required to 
hire someone who is not a ``bona fide'' employee applicant, in 
that the applicant's primary purpose in seeking the job is to 
further other employment or agency status. Simply put, if 
someone is not at least ``half'' motivated by a desire to be a 
genuine, hardworking employee, the employer should not have to 
hire them.
    Title II is formerly H.R. 1595, the Fair Hearing Act, which 
requires the NLRB to conduct hearings to determine when it is 
appropriate to certify a single location bargaining unit where 
a labor organization attempts to organize employees at one or 
more facilities of a multi-facility employer. This title simply 
requires the Board to consider all of the relevant factors-as 
the agency has done for decades-in making a unit determination. 
While the Board recentlywithdrew its proposed rule to implement 
a ``one-size-fits-all'' rule for determining the appropriateness of a 
single location bargaining unit, Title II would statutorily protect an 
employer's right to have a fair hearing to present evidence in support 
of its side of the case.
    Title III of the FSBEA is formerly H.R. 1598, the Justice 
on Time Act. Title III is intended to help remedy situations in 
which employees often wait more than a year for the Board to 
render a decision regarding their discharge. The legislation 
requires the NLRB to issue a final decision within one year on 
all unfair labor practice complaints where it is alleged that 
an employer has discharged an employee in an attempt to 
encourage or discourage union membership. Expeditious 
resolution of these complaints would benefit all parties not 
only by ensuring swift justice and timely reinstatement of a 
wronged employee, but also by reducing the costs of litigation 
and backpay awards. The title contains an exemption from the 
one-year time limit for ``extremely complex'' cases, and 
requires the Board to report annually to the House Education 
and the Workforce Committee and the Senate Labor and Human 
Resources Committee on cases not disposed of within one year, 
including reasons for the delay and the Board's recommendations 
for prompt resolution.
    Title IV of the Act is formerly H.R. 2449, the Fair Access 
to Indemnity and Reimbursement (FAIR) Act, which requires the 
NLRB to pay the attorney's fees and expenses to small employers 
of modest means--including businesses and labor organizations--
who prevail in cases before the NLRB. Title IV applies to 
employers having not more than 100 employees and a net worth of 
not more than $1.4 million. These eligibility limits represent 
a mere fifth of the 500 employee/$7 million net worth limits of 
the Equal Access to Justice Act (EAJA), legislation passed in 
1980 which was supposed to have leveled the playing field for 
small employers facing unwarranted actions brought by the 
federal government. However, the EAJA is underutilized at the 
Board and is simply not working for the nation's small 
employers.
    Title IV would make sure that the Board considers carefully 
the merits of an action before bringing it against a small 
entity with few resources, and would ensure that these smaller 
employers have an incentive to fight a case of questionable 
merit.

                            Committee Views

                      Title I--Truth in Employment

    ``Salting'' abuse is the placing of trained professional 
organizers and agents in a non-union facility to harass or 
disrupt company operations, apply economic pressure, increase 
operating and legal costs, and ultimately put the company out 
of business. The object of the union agents is accomplished 
through filing, among other charges, unfair labor practice 
charges with the National Labor Relations Board. As the five 
hearings the Committee held on this issue in the 104th and 
105th Congresses showed, ``salting'' is not merely an 
organizing tool, but has become an instrument of economic 
destruction aimed at non-union companies that often has nothing 
to do with organizing.
    As a former ``salt'' from Vermont testified before the 
subcommittee: \1\
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    \1\ February 5, 1998, written statement of Thomas J. Cook, before 
the Subcommittee on Employer-Employee Relations of the House Committee 
on Education and the Workforce, p. 1.

          [Salting] has become a method to stifle competition 
        in the marketplace, steal away employees, and to 
        inflict financial harm on the competition. Salting has 
        been practiced in Vermont for over six years, yet not a 
        single group of open shop electrical workers has 
        petitioned the local union for the right to 
        collectively bargain with their employers. In fact, as 
        salting techniques become more openly hostile (with the 
        appearance of paid organizers who willfully undermine 
        the flow of productivity), most workers view these 
        activities as a threat to their ability to work. In a 
        country where free enterprise and independence is so 
        highly valued, I find these activities nothing more 
---------------------------------------------------------------------------
        than legalized extortion.

    A former NLRB field attorney testified that, from his 
experience, ``salts have no intention of organizing a company 
by convincing the co-workers that unions are a good thing for 
them. Instead, once a salt enters the workplace, that 
individual engages in a pattern of conduct to disrupt the 
workplace; to gather information about the employer to feed to 
the union; to disrupt projects; and ultimately to file charges 
with the National Labor Relations Board.'' \2\ Another witness 
quoted directly from the International Brotherhood of 
Electrical Workers' organizing manual, which states that the 
goal of the union salt is to ``threaten or actually apply the 
economic pressure necessary to cause the employer to raise his 
prices, scale back his business activities, leave the union's 
jurisdiction, go out of business and so on.'' \3\
---------------------------------------------------------------------------
    \2\ Hearing on H.R. 758, the Truth in Employment Act of 1996, 
before the Subcommittee on Employer-Employee Relations, 105th Cong., 
1st Sess., p. 6 (October 9, 1997) (Serial No. 105-52).
    \3\ Ibid. See also, Hearing on the National Labor Relations Board 
Reform, before the Employer-Employee Relations Subcommittee of the 
House Committee on Economic and Educational Opportunities, 104th Cong., 
1st Sess., p. 44 (September 27, 1995) (Serial No. 104-44) (``The IBEW 
program is one bent on the involuntary submission of innocent and law-
abiding employers to the union, or the employer's financial 
destruction. By perverting the NLRB process in this manner, the IBEW is 
threatening two of the core beliefs that this country treasures: 
freedom and the entrepreneurial spirit''); Joint Hearing on the 
Practice of ``Salting'' and Its Impact on Small Business, before the 
Committee on Small Business and the Committee on Economic and 
Educational Opportunities, 104th Cong., 2nd Sess., p. 20 (April 12, 
1996) (Serial No. 104-71/104-51) (labor attorney testifying that ``I 
think that salts differ fundamentally from other employees. They are 
just temporarily there on an assignment, a mission for the union. They 
are working for the union. When they are done doing * * * what duties 
they have been given by the union, they either return to the work for 
the unionized employers or they are sent on to another salting 
assignment'').
---------------------------------------------------------------------------
    Hiding behind the shield of the National Labor Relations 
Act, unions ``salt'' employers by sending agents into non-union 
workplaces under the guise of seeking employment. These 
``salts'' often try to harm their employers or deliberately 
increase costs through various actions, including sabotage and 
frivolous discrimination complaints with the NLRB. When unions 
send ``salts'' into a workplace, these agents often state 
openly that their purpose is to advance union objectives by 
organizing the employer's workforce. If an employer refuses to 
hire the union agents or members, the union files unfair labor 
practice charges.
    Alternatively, if the ``salts'' are hired by the employer, 
they often attempt to persuade bona fide employees of the 
company to sign cards supporting the union. The union agents 
also often look for other reasons to file unfair labor practice 
charges, solely for purposes of imposing undue legal costs on 
the employer they are seeking to organize.
    As the U.S. Chamber of Commerce testified before the 
subcommittee, ``In Louisiana [for example], Tri-Parish 
Electric, a company with six employees, was forced out of 
business as a result of a salting campaign and the frivolous 
charges that ensued. Clearly, the drafters of the 1935 National 
Labor Relations Act did not intend this result. The Act was not 
intended as a device to circumvent the will of employees, to 
strangle businesses into submission to further a union's 
objectives, or to put nonunion employers out of business.'' \4\ 
One construction company testified that it had to spend more 
than $600,000 in legal fees from one salting campaign, with an 
average cost per charge of more than $8,500.\5\ Beyond legal 
fees, one employer testified, ``it would be impossible to put a 
dollar amount on the pain and suffering caused by the stress of 
the situation to a small company like ours who does not have 
the funds to fight these charges.'' \6\
---------------------------------------------------------------------------
    \4\ February 5, 1998, written testimony of Peter C. Rousos, on 
behalf of the U.S. Chamber of Commerce, before the Employer-Employee 
Relations Subcommittee of the House Education and the Workforce 
Committee, p. 3.
    \5\ Hearing on H.R. 758, the Truth in Employment Act of 1996, 
before the Subcommittee on Employer-Employee Relations, 105th Cong., 
1st Sess., p. 8 (October 9, 1997) (Serial No. 105-52).
    \6\ Hearing on Union Corporate Campaign Tactics, before the 
Subcommittee on Oversight and Investigations of the House Committee on 
Economic and Educational Opportunities, 104th Cong., 1st Sess., p. 88 
(October 31, 1995) (Serial No. 104-45).
---------------------------------------------------------------------------
    Thus, under current law, an employer must choose between 
two unpleasant options: either hire a union ``salt'' who is 
there to disrupt the workplace and file frivolous charges 
resulting in costly litigation, or deny the ``salt'' employment 
and risk being sued for discrimination under the NLRA.
    Title I of the Fairness for Small Business and Employees 
Act of 1998 (FSBEA) would protect the employer by making it 
clear that an employer is not required to hire any person who 
is not a ``bona fide'' employee applicant. The title states 
that someone is not a ``bona fide'' applicant if such person 
``seeks or sought employment with the employer with the primary 
purpose of furthering other employment or agency status.'' 
Simply put, it is the Committee's view that if someone wants a 
job, but at least 50 percent of their intent is not to work for 
the employer, then they should not get the job and the employer 
has not committed an unfair labor practice if they refuse to 
hire the person.
    As drafted, Title I is very narrow legislation simply 
removing from the protection of Section 8(a) of the NLRA a 
person who seeks a job without at least 50 percent motivation 
to work for the employer. At the same time, the legislation 
recognizes the legitimate role for organized labor, and it 
would not interfere with legitimate union activities. Title I 
has a proviso making clear that it does not affect the rights 
and responsibilities available under the NLRA to anyone, 
provided they are a bona fide employee applicant. Employees and 
bona fide applicants will continue to enjoy their right to 
organize or engage in other concerted activities under the 
NLRA, and, employers will still be prohibited from 
discriminating against employees on the basis of union 
membership or union activism.
    The legislation sets up a test that the NLRB general 
counsel must utilize before allowing a Section 8 ``salting'' 
charge to go forward. The test involves examining the intent of 
the individual who is seeking employment. So long as the 
``primary purpose'' of the individual is not to further 
employment or agency status with someone other than the 
employer with whom the individual is applying, then they are a 
``bona fide'' employee applicant and the charge should not be 
dismissed by the general counsel because of Title I. In 
testifying against the legislation, an active ``salt'' told the 
subcommittee, ``I do good work. I work hard,'' and that he is 
``a worker who knew his rights, did a good job, and urged other 
workers to organize and unionize.'' \7\ The legislation is not 
meant to impact individuals such as this, who are clearly at 
least half motivated to be a good employee.
---------------------------------------------------------------------------
    \7\ February 5, 1998, written testimony of Patrick Parcell, on 
behalf of the AFL-CIO's Building and Construction Trades Department, 
before the Employer-Employee Relations Subcommittee of the Education 
and the Workforce Committee, pp. 2-3.
---------------------------------------------------------------------------
    It has been alleged by some throughout the course of the 
many hearings on ``salting'' that this legislation overturns 
the Supreme Court's decision in NLRB v. Town & Country 
Electric, Inc.\8\ However, Title I in fact reinforces the 
narrow holding of Town & Country. The Court held only that paid 
union organizers can fall within the literal statutory 
definition of ``employee'' contained in Section 2(3) of the 
NLRA.\9\ The Court did not address any other legal issues, but 
the effect of the decision is to uphold policies of the NLRB 
which subject employers to unwarranted union harassment and 
frivolous complaints.
---------------------------------------------------------------------------
    \8\ 116 S.Ct. 450 (1995).
    \9\ Id. at 457.
---------------------------------------------------------------------------
    Title I does not change the definition of ``employee'' or 
``employee applicant'' under the NLRA, it simply would change 
the Board's enforcement of Section 8 ``salting'' cases by 
declaring that employers may refuse to hire individuals who are 
not at least half motivated to work for the employer. So long 
as even a paid union organizer is at least 50 percent motivated 
to work for the employer, he or she cannot be refused a job 
pursuant to Title I. As Maury Baskin, general counsel for 
Associated Builders and Contractors, testified before the 
subcommittee, the legislation ``does not seek to overrule the 
Supreme Court's Town & Country case. It would return 
enforcement of the Act to a policy consistent with the Lechmere 
case.'' \10\
---------------------------------------------------------------------------
    \10\ Hearing on H.R. 758, the Truth in Employment Act of 1996, 
before the Employer-Employee Relations Subcommittee, p. 14 (October 9, 
1997) (Serial No. 105-52). In Lechmere, Inc. v. NLRB, 502 U.S. 527 
(1992), the Supreme Court held that outside union representatives can 
be denied access to an employer's workplace, and reaffirmed that 
Section 7 of the NLRA was intended to protect the rights of bona fide 
employees, not outside union organizers.
---------------------------------------------------------------------------
    Thus, Title I establishes a test which does not seek to 
overrule Town & Country and does not infringe upon the 
legitimate rights of bona fide employees and employee 
applicants to organize on behalf of unions in the workplace. 
Indeed, the Supreme Court's holding that an individual can be 
the servant of two masters at the same time is similarly left 
untouched.\11\ In fact, it is the acknowledgment that an 
applicant may in fact be split in motivation between an 
employer and a union that gives rise to the need for examining 
an applicant's motivation--a ``primary purpose'' test that the 
NLRB general counsel and courts will apply. The test is 
intended to apply to the motivation of the individual at the 
time he or she attempted to secure employment.
---------------------------------------------------------------------------
    \11\ The Court cited Restatement (Second) of Agency, Section 226, 
at 498, for the proposition that a ``person may be the servant of two 
masters * * * at one time as to one act, if the service to one does not 
involve abandonment of the service to the other.'' Id., at 456.
---------------------------------------------------------------------------
    The focus of Title I is not on the individual's mere 
support for unionization, but on the individual's furtherance 
of employment or agency status with someone other than the 
employer with whom the individual is seeking a job. The term 
``employment or agency status'' is intended to refer to the 
common law definitions of employee or agency status, as the 
Supreme Court and the NLRB have repeatedly construed these 
terms over the course of decades. As the Court noted in Town & 
Country, the ordinary definition of ``employee'' refers to ``a 
person in the service of another under any contract of hire, 
express or implied, oral or written, where the employer has the 
power or right to control and direct the employee in the 
material details of how work is to be performed.'' \12\ 
Similarly, an ``agent'' is well defined by common law and NLRB 
decisions as ``one who agrees to act subject to a principal's 
control.'' \13\
---------------------------------------------------------------------------
    \12\ 116 S.Ct. at 454.
    \13\ Restatement (Second) of Agency, Section 226, Comment a (1957). 
See also, Cambridge Wire Cloth Co., Inc., 256 NLRB 1135, 1139 (1981) 
(mere participation in union activities such as card solicitation or 
organizing committee does not constitute one an agent of a union).
---------------------------------------------------------------------------
    Thus, only individuals who fall within these narrow 
categories due to a union's control over their activities could 
be denied employment by an employer, and only if they seek or 
sought employment with the ``primary purpose'' of furthering 
their union employment or agency status.
    Regarding the standard of proof involved in determining an 
individual's motivation under Title I, the test that the NLRB 
general counsel and courts would apply is not a new one. In 
Wright Line, Inc.,\14\ the NLRB established a uniform method of 
proving discriminatory motivation, in the context of Section 
8(a)(3) of the NLRA. The Board has held that an employer will 
not be found to have violated the NLRA if the employer's action 
towards an employee would have occurred even in the absence of 
protected conduct. Under Wright Line, the general counsel bears 
the burden of establishing a prima facie case that an 
employee's ``protected activity'' was a substantial or 
motivating factor for an employer's adverse action. The 
employer can rebut this showing, however, by demonstrating that 
it would have taken the same action against the employee even 
in the absence of the protected conduct.\15\
---------------------------------------------------------------------------
    \14\ 251 NLRB 1083 (1980), enforced 662 F.2d 899 (1st Cir. 1981), 
cert. denied, 455 U.S. 989 (1982).
    \15\ 662 F.2d at 905.
---------------------------------------------------------------------------
    Under Title I, the act of seeking employment with the 
``primary purpose'' of furthering another employment or agency 
status would not be ``protected activity'' under the NLRA. 
Therefore, the general counsel would bear the burden as part of 
his prima facie case or showing that the employee applicant on 
whose behalf the charge of discrimination has been filed is not 
a person who has sought employment with such a primary 
purpose--that the applicant would have sought the job even in 
the absence of his or her salting activity. In the event the 
general counsel does make out a prima facie case with the 
necessary element that the applicant still would have sought 
the job, the employer would still be entitled to rebut the 
prima facie case with contrary evidence.
    In sum, forcing employers to hire union business agents or 
employees, who are primarily intent on disrupting or even 
destroying employers' businesses, does not serve the interests 
of bona fide employees under the NLRA and hurts the 
competitiveness of small businesses. Title I does not prohibit 
organizers from getting jobs. Title I simply removes an 
incentive to use the NLRA as a weapon against an employer by 
persons who have little interest in employment. All the 
legislation does is give the employer some comfort that it is 
hiring someone who really wants to work for the employer. As 
long as the ``salt'' is applying to do a good job for the 
employer, Title I does nothing but protect the employee 
applicant, and theemployer who has a right to have a workforce 
that is going to work for the good of the company. Title I returns a 
sense of balance to the NLRA which is being undermined by the Board's 
current policies.

                         Title II--Fair Hearing

    When a labor organization attempts to organize employees at 
a single facility of an employer that has multiple facilities, 
the issue often arises as to whether the bargaining unit 
proposed by the union should include other employees at other 
facilities who share a ``community of interest'' with the 
employees at the separate facility.
    The current practice of the National Labor Relations Board 
is to presume that employees at a single facility form an 
appropriate unit, but to allow an employer to rebut that 
presumption by showing a functional integration so substantial 
as to negate the separate identity of the single-facility unit. 
In making its findings on this issue, the Board considers such 
factors as: central control over daily operations and labor 
relations, including the extent of local autonomy; similarity 
of skills, functions, and working conditions; degree of 
employee interchange; distance between locations; and 
bargaining history, if any.\16\ The Board applies these factors 
on a case-by-case basis in situations where the employer 
disputes the organizing union's contention that the bargaining 
unit should be confined to a single facility.
---------------------------------------------------------------------------
    \16\ J & L Plate, 310 NLRB 429 (1993).
---------------------------------------------------------------------------
    Title II of the FSBEA amends Section 9(c) of the National 
Labor Relations Act by adding a sentence at the end which 
requires the National Labor Relations Board to provide for a 
hearing upon due notice to determine the appropriateness of a 
bargaining unit when the Board receives a petition for an 
election requesting the Board to certify a unit which includes 
the employees employed at one or more facilities of a multi-
facility employer.
    The legislation directs the Board to consider ``functional 
integration, centralized control, common skills, function and 
working conditions, permanent and temporary employee 
interchange, geographical separation, local autonomy, the 
number of employees, bargaining history, and other such factors 
as the Board considers appropriate.''
    As made clear at the February 5, 1998, Employer-Employee 
Relations Subcommittee hearing,\17\ the current state of the 
law already gives organized labor a presumption in favor of the 
appropriateness of bargaining units at single site locations, 
and it is always the employer's burden to rebut that 
presumption by show a ``wider net'' should be cast by the 
National Labor Relations Board in making its bargaining unit 
determination.
---------------------------------------------------------------------------
    \17\ Hearing on Legislation to Provide Fairness to Small Business 
and Employees: H.R. 2449; H.R. 1598; H.R. 1595; and H.R. 758, before 
the Subcommittee on Employer-Employee Relations, 105th Cong., 2nd Sess. 
(February 5, 1998).
---------------------------------------------------------------------------
    Title II simply requires the NLRB to consider all of the 
relevant factors--as the Board has done for decades--in making 
its unit determination. The legislation recognizes that the 
only way to determine which bargaining unit fits which set of 
circumstances is to gather facts--and the only way to gather 
facts is to require the NLRB to hold a hearing.
    Thus, the legislation codifies an employer's ability to 
present evidence supporting its side of the case. As Arlene 
Goodman testified before the Employer-Employee Relations 
Subcommittee, Title II is ``equitable, simple, straightforward, 
and does nothing more than codify the decades-long practice of 
the NLRB in resolving, by hearing, disputes as to the 
appropriateness of the bargaining unit in cases involving 
multi-facility employers,'' and, ``would not change existing 
law, but would preserve the status quo.'' \18\ It is the 
Committee's view that bargaining unit determinations, by their 
nature, require the type of fact-specific analysis that only 
case-by-case adjudication allows. Title II recognizes both the 
realities of human resource management in today's competitive 
economic environment and the complexity of unit determinations. 
The legislation does not attempt to define when a single 
location bargaining unit is appropriate, rather, it merely 
requires the Board to consider all the relevant factors.
---------------------------------------------------------------------------
    \18\ February 5, 1998, written testimony of Arleen Goodman, 
president, Goodman & Company, franchise development and small business 
consultants, on behalf of the International Franchise Association, 
before the Employer-Employee Relations Subcommittee of the House 
Committee on Education and the Workforce, p. 2.
---------------------------------------------------------------------------
    While codifying an employer's right to a hearing, Title II 
is also a response to the NLRB's ill-conceived attempt to craft 
a ``one-size-fits-all'' rule that would have applied to 
virtually every industry, for determining the appropriateness 
of single location bargaining units. Board Chairman William 
Gould proposed on September 27, 1995, new regulations that 
further would tilt the playing field in favor of unions which 
attempt to organize a multi-location employer's workforce 
through incremental steps.\19\
---------------------------------------------------------------------------
    \19\ 60 FR 50146, Notice of Proposed Rulemaking, ``Appropriateness 
of Requested Single Location Bargaining Units in Representation Cases'' 
(September 28, 1995).
---------------------------------------------------------------------------
    While the NLRB voted 4 to 1 on February 18, 1998, to 
withdraw the proposed rule,\20\ there is nothing to prevent the 
agency from resurrecting the rule in the future, and under 
current law, there is no absolute guarantee the employer will 
be granted a hearing.
---------------------------------------------------------------------------
    \20\ Withdrawal of Proposed Rulemakings, NLRB Billing Code 7545-01 
(February 18, 1998).
---------------------------------------------------------------------------
    The Board's proposed rule would have established 
conclusively that employees at an unrepresented single location 
would be the appropriate bargaining unit as long as there are 
15 or more employees in the requested unit at the location; no 
other location of the employer is within one mile of the 
requested location; and at least one supervisor is present at 
the locationfor a regular and substantial period.\21\ As Ms. 
Goodman testified, ``If these three criteria are met, then absent 
highly exceptional circumstances, the employer would no longer be 
entitled to present evidence, testimony, and arguments in support of 
its position as to why the single facility should not be deemed the 
appropriate bargaining unit.'' \22\
---------------------------------------------------------------------------
    \21\ 60 FR 50146, 50157. As noted above, the NLRB's proposed rule 
would apply to ``all employers over which the Board asserts 
jurisdiction,'' but specifically exempts ``public utilities; employers 
engaged primarily in the construction industry; and employers in the 
maritime industry in regard to their ocean-going vessels.'' 60 FR 
50157.
    \22\ February 5, 1998, written testimony of Arleen Goodman, supra 
note 18, p. 3.
---------------------------------------------------------------------------
    Such a mechanistic rule would tilt the playing field even 
more in favor of organized labor than current law, would ignore 
realities of human resource policies central to business 
growth, and would simply create an unfair system for the sake 
of expediency.\23\ As attorney Jay Krupin testified before the 
Employer-Employee Relations Subcommittee: ``The single site 
rule assumes that all businesses operate the same cookie-cutter 
way with no consideration given to the important differences in 
practices, policies, hiring standards and benefits of each 
employer'' and is ``antithetical to a competitive economy which 
U.S. laws foster and encourage.'' \24\ It is the Committee's 
view that limiting a unit determination to the three factors 
proposed by the Board would ignore relevant factors and 
potentially undermine the ability of employers to develop 
flexible solutions to the needs and demands of their work 
forces, and would increase costs and complexity where 
centralized personnel policies are maintained by employers with 
numerous locations.\25\
---------------------------------------------------------------------------
    \23\ The notice of proposed rulemaking stated that ``were the Board 
to establish a rule specifying under which fact situations a single 
location unit will automatically be found appropriate, there would be 
considerably less litigation over the significance or lack of 
significance of these facts, and the factors to which they relate.'' 60 
FR 50146, 50147. Congress, however, wisely attached riders to the 
Labor-HHS appropriations bills during the 1996, 1997, and 1998 cycles 
to prevent the NLRB from spending any money to implement its proposed 
rule.
    \24\ February 5, 1998, written testimony of Jay P. Krupin, partner, 
Krupin Greenbaum & O'Brien, LLC, before the Employer-Employee Relations 
Subcommittee of the House Education and the Workforce Committee, p. 4.
    \25\ Even the NLRB admits a rule ``may not be appropriate for all 
representation cases.'' 60 FR 50146, 50147.
---------------------------------------------------------------------------
    As Ms. Goodman pointed out in her testimony before the 
subcommittee: \26\
---------------------------------------------------------------------------
    \26\ February 5, 1998, written testimony of Arlene Goodman, supra 
note 18, at 4-5.

          Most multi-facility employers, especially those in 
        the retail industry, utilize centralized wage and 
        benefit structures, hiring policies, training and other 
        personnel policies. Most multi-facility employers also 
        utilize centralized advertising, financial controls, 
        budgeting, operational policies, promotions, transfers, 
        and personnel, benefits and work rules policies. Under 
        these circumstances, a single facility is not a stand-
        alone, independent operation, rather it is but one 
        component of a multi-facility employer's business and 
        it is very much operated under centralized policies and 
        procedures. These very issues have been the focus of 
        the individualized case-by-case approach that the NLRB 
        has utilized for four decades in determining when a 
        single facility of a multi-facility employer is or is 
---------------------------------------------------------------------------
        not appropriate for bargaining unit purposes.

    The Board and those supportive of imposing a simplistic 
three-pronged approach argue that the rulemaking in the area of 
bargaining determinations was upheld by the Supreme Court in 
1991 and should therefore be expanded to the arena of single 
location unit determinations.\27\ However, the Supreme Court's 
decision in American Hospital Ass'n v. NLRB \28\ upheld a 
narrowly crafted rule applying only to acute care hospital 
units, while the proposed rule concerning single site units 
would apply to all industries currently under the Board's 
jurisdiction, excluding utilities, construction, and sea-going 
crews in the maritime industry. The rule would take away an 
employer's ability to present its side of the case, and, while 
it would reduce case load and NLRB expense, such would be 
achieved at the cost of shoehorning this nation's employers 
into a rigid rule ignoring realities of the workplace.
---------------------------------------------------------------------------
    \27\ February 5, 1998, written testimony of Richard Griffin, 
general counsel, International Union of Operating Engineers, before the 
Employer-Employee Relations Subcommittee of the House Committee on 
Education and the Workforce, p. 2.
    \28\ 499 U.S. 606 (1991).
---------------------------------------------------------------------------
    Supporters of the narrow rule also allege that it would 
streamline the process at little expense to substantive case 
law, arguing that the three factors included in the rule are 
the only ones which have made a material difference in the 
outcome of cases.\29\ This view is incorrect, and illustrates 
the need for considering all relevant factors as codified by 
Title II of the FSBEA. Indeed, the proposed rule would upset 
certain precedent, and ignoring certain factors in unit 
determinations would clearly change the outcome of unit 
determination cases. For example, in Globe Furniture Rental, 
Inc.,\30\ the Board ruled that an appropriate bargaining unit 
would have to include 75 employees at all five of the company's 
Detroit area facilities. The Board based its decision primarily 
on the fact that even though each facility had a store manager, 
the critical decisions regarding hiring and firing, discipline, 
wages, hours, inventory, financial transactions, and numerous 
other important matters were handled by the company's vice 
president and the central office staff.\31\
---------------------------------------------------------------------------
    \29\ 60 FR 50146, 50152.
    \30\ 298 NLRB 288 (1990).
    \31\ Id.
---------------------------------------------------------------------------
    Similarly, in NLRB v. Chicago Health & Tennis Clubs, Inc., 
\32\ the Seventh Circuit held that the NLRB erred when it 
determined the most relevant factors. The court found evidence 
that indicated the employer was highly integrated, and that 
personnel, labor-related policies, and actual operations were 
centrally located. Factors considered included functional 
integration, similarity of wages and working conditions, 
centralized management and bargaining history \33\--all factors 
not included in the Board's proposed rule.
---------------------------------------------------------------------------
    \32\ 567 F.2d 331 (7th Cir. 1977).
    \33\ Id., at 336-338. Significantly, the Court noted that the 
Board, in making unit determinations, ``must effect the policy of the 
[NLRA] to assure employees the fullest freedom in exercising their 
rights, yet at the same time respect the interest of an integrated 
multi-unit employer in maintaining enterprise-wide labor relations.' '' 
Id. at 335 [Emphasis added. Citations omitted].
---------------------------------------------------------------------------
    In addition to casting aside factors long considered 
relevant to unit determination, the NLRB's proposed rule is 
unfair as it is one-sided in its application. The NLRB 
expressly states that the new rule would only apply if it is 
invoked by the union. If a union seeks to organize multiple 
facilities, the employer is precluded from using the rule to 
limit the organizing to a single facility.\34\ Similarly, an 
employer could not invoke the rule in an attempt to decertify 
the employees at a single facility who are part of a multi-
facility bargaining unit.\35\ The reason unions prefer smaller 
units is because they are easier to organize, as it is easier 
to get members of the unit to agree on a mutually advantageous 
course of collective bargaining--which is why the proposed rule 
was so attractive to them. Unions, Mr. Krupin told the 
Employer-Employee Relations Subcommittee, ``are not so 
concerned with whether the unit is appropriate to meet the 
employees' interests in bargaining or its effect on the 
employer's operations, but are singularly focused on their 
ability to win representational status.'' \36\ Furthermore, Mr. 
Krupin testified, ``Experience has shown that unions' proposed 
units do not necessarily make practical business sense. Rather, 
unions focus on the size of the bargaining unit in the 
organizational process. Generally, the smaller the unit, the 
greater the chance for success in organizing, particularly in a 
service industry operation.'' \37\
---------------------------------------------------------------------------
    \34\ 60 FR 50146, 50151.
    \35\ Id.
    \36\ February 5, 1998, written testimony of Jay P. Krupin, supra 
note 24 at p. 3.
    \37\ Id.
---------------------------------------------------------------------------
    In a 10-page dissent to the NLRB's proposed rule authored 
before his departure, former-NLRB Board Member James M. 
Stephens stated that the Board has shown no serious problems 
with existing law, and no compelling reasons to change it.\38\ 
``I see more to be lost than gained by the proposed rule,'' 
Stephens said, adding that the ``NLRB's energies would be 
better directed elsewhere.'' \39\
---------------------------------------------------------------------------
    \38\ August 25, 1995, memorandum from James M. Stephens, former-
NLRB Member, to the Board, delivered to the NLRB's Office of the 
Executive Secretary for inclusion in the public rulemaking record.
    \39\ Id. at page 5.
---------------------------------------------------------------------------
    Title II simply writes into law the Board's decades-long 
practice of scrupulously analyzing a series of critical factors 
in unit determination.\40\ Title II ensures that the Board will 
not resurrect its proposed rule in the future, and guarantees 
an employer's right to a hearing to present factors supporting 
its side of a dispute over the appropriateness of a proposed 
single location bargaining unit.
---------------------------------------------------------------------------
    \40\ Significantly, NLRB Member Charles Cohen attached a statement 
to the proposed rule in which he pointed out that having reviewed the 
comments received in response to the Board's June 1, 1994, Advance 
Notice of Proposed Rulemaking (59 FR 28501), he was ``still not firmly 
persuaded that there is a need for a rule.'' 60 FR 50146, 50157. Cohen 
noted that the long-standing multi-factorial approach allows the well-
known relevant factors to be applied to accommodate the peculiarities 
of individual cases; that the Board decisions, with rare exceptions, 
have been upheld by the courts; that the stipulation rate remains high; 
and that even the litigated cases are usually resolved within a 
reasonably short period of time. Id.
---------------------------------------------------------------------------
    As Peter C. Rousos testified before the Employer-Employee 
Relations Subcommittee, ``Employers and employees should not be 
denied the due process right to have the NLRB consider, as 
intended by Congress, the unique aspects of each situation.'' 
\41\ Furthermore, ``It is incongruous to American ideals,'' Mr. 
Krupin told the subcommittee, ``to muzzle a party, such as 
employers, from presenting facts to support an appropriate unit 
determination.'' \42\
---------------------------------------------------------------------------
    \41\ February 5, 1998, written testimony of Peter C. Rousos, 
director of corporate human resources, Gaylord Entertainment 
Corporation, on behalf of the U.S. Chamber of Commerce, before the 
Employer-Employee Relations Subcommittee of the House Education and the 
Workforce Committee, p. 4.
    \42\ February 5, 1998, written testimony of Jay P. Krupin, supra 
note 24 at p. 4.
---------------------------------------------------------------------------

                       Title III--Justice on Time

    Section 8(a) of the National Labor Relations Act makes it 
an unfair labor practice for an employer to discharge or to 
otherwise discriminate against an employee in regard to hiring 
or tenure of employment or any term or condition of employment 
in order to encourage or discourage membership in a labor 
organization.\43\ Similarly, Section 8(b) makes it an unfair 
labor practice for a labor organization to ``cause or attempt 
to cause an employer to discriminate against an employee'' for 
the same purpose.\44\
---------------------------------------------------------------------------
    \43\ 29 U.S.C. 158(a).
    \44\ 29 U.S.C. 158(b).
---------------------------------------------------------------------------
    An employee who believes he or she has been discriminated 
against in violation of Section 8 may file a charge with the 
NLRB.\45\ From then on, the vindication of the individual's 
rights is in the hands of the federal government, in the form 
of the NLRB. How quickly the case is investigated and a 
decision is made, and therefore how soon the complainant may 
begin to put his or her life back together, and in many cases 
how soon the employer can remove the uncertain legal and 
financial liability associated with a pending charge, is in the 
hands of the NLRB. The old saying, ``justice delayed is justice 
denied'' remains as true today as ever.
---------------------------------------------------------------------------
    \45\ 29 U.S.C. 160.
---------------------------------------------------------------------------
    Unfortunately, the NLRB's record of timely resolution and 
decision of unfair labor practice cases is dismal. According to 
the NLRB's own figures, in each year since 1977, the median 
time the Board took to render a final decision in unfair labor 
practice cases has exceeded one year.\46\
---------------------------------------------------------------------------
    \46\ ``NLRB Justification of Appropriations Estimates for Committee 
on Appropriations for Fiscal Year 1998''.

------------------------------------------------------------------------
                                 Median time                 Median time
          Fiscal year              (days)      Fiscal year     (days)   
------------------------------------------------------------------------
1977..........................          397          1987           709 
1978..........................          429          1988           762 
1979..........................          483          1989           736 
1980..........................          484          1990           680 
1981..........................          490          1991           586 
1982..........................          633          1992           509 
1983..........................          658          1993           535 
1984..........................          660          1994           503 
1985..........................          720          1995           586 
1986..........................          769          1996           591 
------------------------------------------------------------------------

    Ironically, during that same time, the NLRB's workload has 
decreased substantially. This is true whether measured by the 
number of unfair labor practice charges filed with the Board, 
the number of complaints issued by the NLRB General Counsel, or 
the number of decisions in unfair labor practice cases issued 
by the NLRB. For example, in 1980, the NLRB received 44,063 
unfair labor practice charges and issued 6,230 unfair labor 
practice complaints. In 1996, the Board received 33,107 unfair 
labor practice charges and issued 3,154 unfair labor practice 
complaints.\47\
---------------------------------------------------------------------------
    \47\ NLRB Annual Reports; and ``NLRB: Agency in Crisis'', by Daniel 
Yager, pp. 17-21.
---------------------------------------------------------------------------
    Some (including representatives of the NLRB) have suggested 
that the slowness and delay in the Board's handling of unfair 
labor practice cases is due to the NLRB not being appropriated 
enough funding in recent years by Republican-controlled 
Congresses. In fact, the NLRB's funding has increased steadily, 
from $112 million in 1980 to $175 million in 1998. Even in 
inflation-adjusted dollars, the NLRB's funding has outpaced its 
caseload by a substantial amount. While the Board's funding 
decreased by 15 percent in inflation-adjusted dollars between 
1980 and 1995, the number of unfair labor practice charges it 
received during the same time frame decreased by 23 percent, 
and the number of unfair labor practice complaints the NLRB 
issued decreased by 42 percent.\48\ Simply put, the argument 
that the Board's slowness and delay in deciding unfair labor 
practice cases is due to recent years' appropriations is not 
credible.
---------------------------------------------------------------------------
    \48\ Ibid.
---------------------------------------------------------------------------
    The NLRB itself has recognized the need to improve the 
timeliness of decisions on unfair labor practice cases. The 
NLRB's ``Strategic Plan for Fiscal Years 1997-2002,'' submitted 
to Congress in September 1997, pursuant to the Government 
Performance and Results Act of 1993, describes the agency's 
goal to gradually reduce and eliminate the number of cases 
pending before the Board for more than 2 years.\49\ As of July 
1997, 49 unfair labor practice cases had been pending before 
the Board for more than 2 years, including 23 cases which had 
been pending for more than 3 years.\50\ The Board's goal, 
according to the strategic plan, is to gradually reduce the 
number of these cases so that by the end of FY 1999 no cases 
would be pending at the Board for more than 3 years, by the end 
of FY 2000 no cases would be pending before the Board for more 
than 30 months, and by the end of FY 2001, no cases would be 
pending before the Board for more than 2 years.\51\
---------------------------------------------------------------------------
    \49\ NLRB's ``Government Performance and Results Act of 1993 
Strategic Plan.''
    \50\ Ibid., p. 8.
    \51\ Ibid., p. 23.
---------------------------------------------------------------------------
    While the Committee acknowledges the Board's attention to 
the issue of delay in resolving unfair labor practice cases as 
part of its 5-year strategic plan under GPRA, the Committee 
simply must say that setting a goal of resolving unfair labor 
practice cases two years after they have been pending at the 
Board is not good enough. American workers and employers have a 
right to expect better, more timely, justice.
    Title III of H.R. 3246 establishes in law the goal that the 
NLRB must have with regard to certain unfair labor practice 
cases. In cases brought under Section 8(a)(3) or 8(b)(2) of the 
National Labor Relations Act, in which the charge alleges 
unlawful discharge of an employee, the Board must issue its 
findings of fact and order (either granting remedy to the 
employee or dismissing the complaint) within one year of the 
time that the charge is filed.
    The Committee believes that this is a reasonable goal and 
time limit for deciding cases in which an individual worker has 
been discharged, allegedly for illegal reasons. There are and 
will be, however, some cases in which the facts may be complex 
or difficult to discern, or where one or the other party to the 
case is not forthcoming with information necessary to resolve 
the case, which may make it impossible for the Board to reach 
this goal. In those cases, the bill requires that the Board 
report annually to this Committee and to the Senate Committee 
on Labor and Human Resources regarding any cases pending for 
more than one year, along with an explanation of the factors 
contributing to the delay and recommendations for reaching 
prompt resolution of the cases.
    During the February 5, 1998, hearing before the 
Subcommittee on Employer-Employee Relations, the General 
Counsel of the International Union of Operating Engineers, Mr. 
Richard Griffin, testifying on behalf of the AFL-CIO, testified 
that, ``We wholeheartedly agree with the premises of this bill 
* * * [but] In our view, while [Title III] is a step in the 
right direction, it does not go far enough to address the 
critical issue the bill identifies.'' Mr. Griffin went on to 
suggest several additional provisions, such as making NLRB 
orders self enforcing and broadening the NLRB's injunctive 
relief provisions to include unfair labor practice cases. 
Whether or not either of those changes would in fact produce 
less, rather than more, delay in resolving unfair labor 
practice cases is certainly debatable; it is not debatable that 
such changes would substantially tilt the balance between 
employer and employee rights under the National Labor Relations 
Act. Title III of the Committee bill does not try to, nor does 
it, tilt the balance between employer and employee rights under 
the NLRA. It simply seeks speedy, and therefore more just, 
resolution of disputes in unfair labor practice cases involving 
allegations of unlawful discharge.
    In short, Title III is an appropriate response to years of 
frustration on the part of employees and employers about the 
length of time and delay in having unfair labor practice 
charges resolved. Employees, employers, and taxpayers who fund 
the agency deserve and need more timely resolution of these 
cases.

                       Title IV--Attorneys' Fees

    Small businesses and labor organizations facing an action 
brought against them by the National Labor Relations Board are 
at a huge disadvantage. The NLRB has an army of lawyers well-
versed in labor law, while the small company--or labor 
organization--often does not have the resources to adequately 
defend itself. Small entities often are unable to fight a 
questionable case to its conclusion based on the merits because 
of a lack of resources, and end up having to settle the case 
with the Board because it is the only viable option.
    In Fiscal Year 1996, for example, the Board received nearly 
33,000 unfair labor practice charges, and 2,558 charges 
resulted in a complaint being issued by the Board's general 
counsel. Of these complaints, 2,204 were settled at some point 
post-complaint.\52\ In Fiscal Year 1995, the NLRB received 
34,004 unfair labor practice charges, issued 3,034 complaints, 
and settled 2,295 cases post-complaint.\53\
---------------------------------------------------------------------------
    \52\ Figures provided by the NLRB to the Committee in chart form--a 
summary of figures available in the NLRB's annual reports.
    \53\ Id.
---------------------------------------------------------------------------
    As labor attorney Jay P. Krupin aptly summarized the 
situation when testifying before the subcommittee: \54\
---------------------------------------------------------------------------
    \54\ February 5, 1998, written testimony of Jay P. Krupin, partner, 
Krupin Greenbaum & O'Brien, LLC, before the Employer-Employee Relations 
Subcommittee on the House Education and the Workforce Committee, pp. 8-
9. (Emphasis added.)
---------------------------------------------------------------------------
         When unions file unfair labor practice charges, the 
        Board in reality becomes the advocate for the union. 
        The union benefits from the Board's resources and 
        staff, and generally does not have to expend additional 
        significant funds to process their claims. 
        Unfortunately, smaller employers have no such aid. 
        Moreover, unions know this. Therefore, unions file 
        goading charges, exaggerating claims to such a degree 
        that the Board must investigate and cause employers to 
        defend themselves. Unions file multiple charges, hoping 
        to convince the Board that some impropriety must have 
        occurred if so many claims are alleged. Unions file 
        charges specifically and artfully based upon 
        credibility determinations, requiring the Board to 
        issue a complaint and seek a hearing because the 
        credibility of witnesses becomes crucial in the case. 
        As a result, even if an employer is correct on the 
        merits, the actions of the Board on behalf of unions as 
        the charging party virtually beat an employer into 
        submission. Such actions back small employers against 
        the wall into settling matters where no wrongdoing 
        occurred. Some employers stand on the verge of 
        bankruptcy to defend themselves. Recently, the NLRB has 
        become increasingly hostile to small employers with the 
        stress of limited resources and internal time limits 
        which may not be practical. The small employer is 
        trapped. This is not the purpose of the National Labor 
        Relations Act. It is not the mandate of the National 
        Labor Relations Board. Indeed, the Board must look more 
        closely at Labor's claims and must take greater 
        responsibility before issuing complaints and holding 
        hearings. To ensure that such abuses do not continue, 
        we fully support [Title IV].

    Under current law, small businesses and unions who have 
prevailed against the NLRB may use the Equal Access to Justice 
Act (EAJA) to attempt to recover the attorney's fees 
andexpenses they have incurred in defending the action they have 
won.\55\ The EAJA-passed in 1980 to provide small employers an 
effective means to fight unwarranted intrusions by federal agencies--is 
available to employers having not more than 500 employees and a net 
worth of not more than $7 million. Unfortunately, the EAJA is not often 
utilized against the NLRB and has proven ineffective.
---------------------------------------------------------------------------
    \55\ Sec. 5 U.S.C. 504 et seq.; 28 U.S.C. 2412 et seq. The EAJA 
provides that an agency, in any adversary adjudication, or a court, in 
any civil action (except tort actions and tax cases, but including 
judicial review of agency actions), shall award ``to a prevailing party 
other than the United States,'' fees and other litigation expenses 
unless the agency or court can demonstrate that its position was 
``substantially justified'' or that ``special circumstances make an 
award unjust.'' 5 U.S.C. Sec. 504(a)(1); 28 U.S.C. Sec. 2412(d). Viewed 
by Congress as a small business relief measure and as a regulatory 
reform bill, the EAJA was passed in 1980 on a three-year trial basis, 
expired in 1984, and was reenacted on a permanent basis is 1985, 
retroactive to 1984. Congress intended that litigants of modest 
resources would be encouraged to defend themselves against unjustified 
government action.
---------------------------------------------------------------------------
    Under the EAJA, a prevailing party \56\ will not get its 
fees if the losing agency can show its position was 
``substantially justified.'' The NLRB general counsel has 
easily met the ``substantially justified'' burden of proof 
because courts have interpreted the burden to actually be one 
of ``reasonable basis in law and fact.'' \57\ Despite Congress' 
effort in 1985 to clarify (in committee report language) that 
``substantially justified'' places a burden on the general 
counsel greater than ``reasonable basis,'' \58\ current law 
follows the 1988 Supreme Court ruling that the burden is in 
fact the lower ``reasonable basis'' standard.
---------------------------------------------------------------------------
    \56\ In addition to falling within the EAJA's net worth and 
employee limitations, an applicant must ``prevail'' against the Board 
in order to be eligible to recover fees and expenses. A party must be 
``a respondent in an adversary adjudication who prevails in that 
proceeding, or in a significant and discrete substantive portion of the 
proceeding.'' 29 CFR Section 102.142(b). The Board must actually issue 
a complaint in order to create the possibility of any potential EAJA 
claim. 29 CFR Section 102.143(a) (``the term adversary adjudication as 
use in this subpart, means unfair labor practice proceedings pending 
before the Board on complaint'').
    \57\ Pierce v. Underwood, 487 U.S. 552 (1988). In Pierce, the 
Supreme Court held that a ``more than mere reasonableness'' test would 
be ``out of accord with prior usage'' and ``unadministerable.'' 
``Between the test of reasonableness,'' the Court wrote, ``and a test 
such as `clearly and convincingly justified' . . . there is simply no 
accepted stopping-place, no ledge that can hold the anchor for steady 
and consistent judicial behavior.'' 487 U.S. at 568.
    \58\ H. Rept. 99-120, 99th Cong., 1st Sess. 9-10 (1985), reprinted 
in 1985 U.S.C.C.A.N. 132, 138.
---------------------------------------------------------------------------
    Given the NLRB's low burden, and since an EAJA claim itself 
can be as costly as the underlying action, not many EAJA 
applications are being filed with the Board. A GAO report 
prepared for the Committee and released in February 1998 \59\ 
showed that the number of EAJA applications received by the 
NLRB reached a high of 51 in 1984 and a low of six in 1994.\60\ 
As Table III.1 and Table III.2 below show, the number of EAJA 
applications for both Board and Circuit Court of Appeals 
decisions, and applications granted, has fallen 
drastically:\61\
---------------------------------------------------------------------------
    \59\ ``Equal Access to Justice Act: Its Use in Selected Agencies,'' 
B-278335, GAO/HEHS-98-58R (January 14, 1998).
    \60\ Id., at pp. 19-20.
    \61\ Ibid.

 TABLE III.1--BOARD DECISIONS ON EAJA APPLICATIONS AT NLRB, FISCAL YEARS
                                 1982-97                                
------------------------------------------------------------------------
                                         Number of                      
                                       applications      Amount of fees 
            Fiscal year            --------------------   and expenses  
                                     Decided   Granted       awarded    
------------------------------------------------------------------------
1982..............................        17         0                 0
1983..............................        37         0       \1\ $23,941
1984..............................        35         3            39,226
1985..............................        26         2            69,153
1986..............................        31         6           126,620
1987..............................         7         1           126,766
1988..............................         8         5           106,042
1989..............................        24         3            40,534
1990..............................        12         1            14,415
1991..............................         5         0        \1\ 28,400
1992..............................         9         3            60,822
1993..............................         4         0                 0
1994..............................         2         2            31,900
1995..............................         7         3            36,553
1996..............................         8         1            11,319
1997..............................         2         2            14,345
                                   -------------------------------------
Total.............................       234        32           730,036
                                                                        
------------------------------------------------------------------------
\1\ Although NLRB records showed these as fees and expenses awarded,    
  NLRB offficials explained that they were probably not amounts awarded 
  by NLRB but (1) may have represented settlements or cases decided by  
  ALJs and not appealed to NLRB but became orders of NLRB or (2) were   
  applications that were granted in one fiscal year but paid in another.


       TABLE III.2--CIRCUIT COURT OF APPEALS DECISIONS OF NLRB EAJA     
                   APPLICATIONS, FISCAL YEARS 1982-97                   
------------------------------------------------------------------------
                                         Number of                      
                                       applications      Amount of fees 
            Fiscal year            --------------------   and expenses  
                                     Decided   Granted       awarded    
------------------------------------------------------------------------
1982..............................         8         0                 0
1983..............................         8         1           $16,490
1984..............................        16         0                 0
1985..............................        12         1            13,264
1986..............................         9         3            43,652
1987..............................         7         1            25,000
1988..............................         5         2            70,952
1989..............................         6         2            43,957
1990..............................         6         1           150,000
1991..............................         3         2            32,532
1992..............................         5         4           107,428
1993..............................         4         3           100,423
1994..............................         4         2            35,500
1995..............................         0         0                 0
1996..............................         8         0                 0
1997..............................         6         3            57,585
                                   -------------------------------------
      Total.......................       111        24           696,783
------------------------------------------------------------------------

    Having decided 146 EAJA applications--and granting 11--
during fiscal years 1982 to 1986, the Board decided only 23--
granting 8--during fiscal years 1993 to 1997.\62\ NLRB EAJA 
applications have similarly fallen off with respect to circuit 
court of appeals decisions of NLRB EAJA applications. In fiscal 
years 1982 to 1986 there were 5 awards out of 56 decisions, 
while from fiscal years 1993 to 1997, there were 8 awards 
granted out of only 22 decisions.\63\
---------------------------------------------------------------------------
    \62\ Id., at p. 19.
    \63\ Id., at p. 20.
---------------------------------------------------------------------------
    It is the Committee's view that despite the EAJA, many 
small employers are intimidated by the labyrinth of rules, 
procedures, and politics involved in defending themselves when 
the NLRB brings a complaint, and believe it is easier--and far 
less expensive--to give up the fight. While the NLRB 
understandably would argue that the lack of successful EAJA 
claims is due to it carefully issuing only worthy complaints--
ones it is ``substantially justified'' in bringing--small 
employers and unions prevailing against the Board, however, 
recognize the long odds of winning, and high expense of 
undertaking, additional litigation to attempt to secure an 
award under the EAJA.\64\
---------------------------------------------------------------------------
    \64\ See, Lewis, Robert, ``NLRB Policy Under the Equal Access to 
Justice Act,'' Nat. L.J., April 9, 1984 (``[EAJA] applications are 
opposed as a matter of course on a variety of technical grounds, quite 
apart from the main issue of substantial justification or special 
circumstances. As a result, the respondent who wins the underlying 
unfair labor practice case may find that the expense involved in 
litigating his fee application exceeds the cost of the initial 
litigation, with no assurance of success'').
---------------------------------------------------------------------------
    As pointed out by the U.S. Chamber of Commerce, ``A 
prevailing small business must file a petition--another costly 
legal action--for reimbursement of its legal expenses under 
EAJA and then face the prospect that the Board will usually 
prevail in its claim of substantial justification. Accordingly, 
most prevailing small businesses do not even file for EAJA 
reimbursement. (An average of only 10 applications were 
received by the Board each year during the period 1987 to 
1996--a telling statistic).'' \65\
---------------------------------------------------------------------------
    \65\ February 5, 1998, written testimony of Peter C. Rousos, on 
behalf of the U.S. Chamber of Commerce, before the Employer-Employee 
Relations Subcommittee of the House Education and the Workforce 
Committee, p. 7.
---------------------------------------------------------------------------
    Since it is clear the EAJA is underutilized at best, and at 
worst simply not working, Title IV of the Fairness for Small 
Business and Employees Act of 1998 imposes a flat rule: If you 
are a small employer or small labor organization, and you 
prevail against the NLRB, then you will get your attorney's 
fees and expenses from the Board.\66\ Title IV would greatly 
assist small companies like Bay Electric Company, of Cape 
Elizabeth, Maine, a family-owned electrical contracting company 
employing 17 people. Founder Don O. Mailman, in urging the 
subcommittee to move forward with the legislation, described 
how his company has spent more than $100,000 to defend itself 
against 11 charges that were ultimately dismissed, and that he 
personally knows of several small contractors that have pled 
guilty to charges ``rather than face what we went through to 
prove their innocence.'' \67\
---------------------------------------------------------------------------
    \66\ For qualifying prevailing employers, i.e., up to 100 employees 
and a net worth of not more than $1.4 million, it is the Committee's 
intent that the award shall be paid by the NLRB out of its appropriated 
funds. The attorney's fee cap under the EAJA was raised from $75 per 
hour to $125 per hour by Public Law 104-121, Sections 231--233, signed 
into law March 29, 1996.
    \67\ Hearing on H.R. 758, the Truth in Employment Act of 1996, 
before the Subcommittee on Employer-Employee Relations, 105th Cong., 
1st Sess., at 99 (October 9, 1997) (Serial No. 105-52).
---------------------------------------------------------------------------
    Title IV of the FSBEA adds a new Section 20 to the National 
Labor Relations Act. Section 20(a) states that an employer or 
labor organization which has not more than 100employees and a 
net worth of not more than $1.4 million and is a ``prevailing party'' 
against the Board in administrative proceedings ``shall be'' awarded 
fees as a prevailing party under the EAJA ``without regard to whether 
the position of the Board was substantially justified or special 
circumstances make an award unjust.'' It is essentially an ``NLRB-loser 
pays'' rule applying to the Board in its actions against small 
employers or labor organizations.\68\
---------------------------------------------------------------------------
    \68\ Contrary to assertions of some Democrats at the February 5, 
1998, Employer-Employee Relations Subcommittee hearing on this 
legislation that the ``loser pays'' concept would be a novel concept 
since it flies in the face of our judicial system's ``American Rule,'' 
which holds that each side pays its own legal expenses, many ``loser 
pays'' concepts are in present law--Title VII, the Age Discrimination 
in Employment Act, and the Equal Pay Act, for example, all provide for 
attorney's fees to prevailing parties. As noted by the GAO, ``The 
Congressional Research Service identified about 180 fee-shifting 
statutes other than EAJA as of December 1996.'' GAO/HEHS-98-58R, supra 
note 59 at p. 25. Furthermore, the Black's Law Dictionary definition of 
the ``American Rule'' is that ``attorney fees are not awardable to the 
winning party unless statutorily or contractually authorized.'' 
(Emphasis added.)
---------------------------------------------------------------------------
    Title IV 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 the Board's existing EAJA 
regulations, but the prevailing party would not be precluded 
from receiving an award by the NLRB general counsel showing the 
Board was ``substantially justified'' in bringing the case or 
that ``special circumstances make an award unjust.'' If the 
Board loses, the Board pays the winner's fees and expenses.
    Section 20(b) of Title IV applies the same rule regarding 
the awarding of fees and expenses to a small business or labor 
organization engaged in a civil court action with the NLRB. 
This covers situations in which the party wins a case against 
the NLRB in civil court, including a proceeding for judicial 
review of Board action. Section 504(c)(2) of the EAJA allows a 
party to appeal a fee determination within 30 days to a United 
States court having jurisdiction. The new NLRA Section 20(b) of 
Title IV of the FSBEA makes clear that fees and expenses 
incurred appealing an actual fee determination under Section 
20(a) would also be awarded to a prevailing party without 
regard to the ``substantial justification'' burden of proof.
    Title IV levels the playing field for small employers 
against the Board. Title IV will cause the NLRB to more 
carefully evaluate the merits of a case before bringing a 
complaint against a small business or labor organization, and 
offers the small entity the incentive to fight a meritless case 
brought against it and see the case through to full 
consideration. Title IV of the FSBEA applies to employers--
businesses and unions--which have not more than 100 employees 
and a net worth of not more than $1.4 million. These limits are 
a mere 20 percent of the current 500 employee/$7 million net 
worth eligibility limits for employers under the EAJA. Title IV 
adopts the regulations and fee application procedures 
promulgated by the NLRB pursuant to the EAJA, except that the 
Board shall award fees and expenses to qualified applicants 
without regard to whether the position of the Board was 
substantially justified or special circumstances make an award 
unjust.\69\
---------------------------------------------------------------------------
    \69\ The Board's EAJA regulations, 29 CFR Sections102.143-102.155, 
define ``employees'' as ``all persons who regularly perform services 
for remuneration for the applicant under the applicant's direction and 
control. Part-time employees shall be included on a proportional 
basis.'' 29 CFR Part 102.143(f). See Also Model Rules for 
Implementation of the Equal Access to Justice Act in Agency 
Proceedings, 1 CFR Section 315.104(e). By coupling net worth with an 
employee-number eligibility standard, Congress viewed the size of an 
employer's workforce as a rough measure of an entity's available 
resources, but did not offer particular distinctions among employers 
based on status of employees or total hours worked.
    With respect to part-time employees, it is the Committee's intent 
that the employee eligibility standard be a basic pro-rate 
determination along the lines of the federal government's ``full-time-
equivalent'' (FTE) classification. For example, if the payroll on the 
date of the complaint has 10 full-time and 10 part-time employees, then 
you have 15 employees for purposes of Title IV of the FSBEA. See Sisk, 
Gregory C., ``The Essentials of the Equal Access to Justice Act: Court 
Awards of Attorney's Fees for Unreasonable Government Conduct (Part 
One)'', 55 La. L. Rev., 217, 305 (Nov. 1994) (``The full-time 
equivalent approach best conforms with the purpose of * * * excluding 
large employers from eligibility based on the likely assumption that an 
entity able to maintain a large payroll has sufficient resources to 
withstand unreasonable government conduct''). As under EAJA, it would 
be the prevailing party's burden to assert ``the number, category, and 
work location of employees of the applicant and its affiliates.'' 29 
CFR Part 102.147(a). Similarly, as the NLRB's regulations state, the 
determination of number of employees ``shall be determined as of the 
date of the complaint in an unfair labor practice proceeding or the 
date of the notice of hearing in a backpay proceeding.'' 29 CFR Part 
102.143(d). The above method of calculating part-time employees for 
purposes of Title IV is intended to put to rest what a NLRB general 
counsel memorandum issued soon after the EAJA was enacted stated was 
still undetermined: ``[T]here is a question of how to count part-time 
workers on a proportional basis. Does one compute the number of hours 
worked by a part-time employee on the date the complaint issued, during 
the week in which complaint issued, during the payroll period in which 
complaint issued, or during the year[?]'' Gen. Couns. Mem. 83-11 (April 
7, 1983), ``The Equal Access to Justice Act--The First Year'', 
reprinted in 1983 LAB. REL. Y.B. (BNA) 222.
---------------------------------------------------------------------------
    As stated above, an employer or labor organization with a 
net worth of more than $7 million is not eligible for an EAJA 
award. Under Title IV of the FSBEA, an employer, or labor 
organization, in addition to the eligibility requirement of 
having no more than 100 employees, is also subject at the same 
time to a net worth limit of $1.4 million.
    The EAJA and the Board's regulations do not define the term 
``net worth,'' and the EAJA's legislative history provides very 
little as to congressional intent. Congressional committee 
reports simply define ``net worth'' as total assets less total 
liabilities.\70\ Under the NLRB's EAJA regulations, the 
applicant must include with its application a statement 
attesting to its net worth and written verification under oath 
or under penalty or perjury that the information provided in 
the application is true.\71\ In addition, the applicant must 
provide ``a detailed exhibit'' showing the net worth of the 
applicant and any affiliates ``in any form convenient to the 
applicant that provides full disclosure of * * * assets and 
liabilities and is sufficient to determine whether the 
applicant qualifies under the standards of this part.'' \72\ 
Thus, under current law, the applicant must make the assertion 
of net worth in its fee application and it is up to the general 
counsel, or administrative law judge, to whom the application 
is submitted, to object.
---------------------------------------------------------------------------
    \70\ H. Rept. 96-1418, p. 15; S. Rept. 96-253, p. 17.
    \71\ 29 CFR Part 102.147(b) and 102.147(e).
    \72\ 29 CFR Part 102.147(f).
---------------------------------------------------------------------------
    The only guidance provided by the EAJA legislative history 
regarding the proper manner in which to determine net worth 
concerns valuation of assets: ``[I]n determining the value of 
assets, the cost of acquisition rather than fair market value 
should be used.'' \73\ Some courts, however, have differed with 
the Board by allowing accumulated depreciation to be deducted 
in calculating net worth, and it is the Committee's intention 
that for purposes of calculating net worth, the adoption of 
generally accepted accounting practices, as illustrated by the 
reasoning of these courts, should be followed.\74\
---------------------------------------------------------------------------
    \73\ H. Rept. 96-1418, p. 15.
    \74\ See, Continental Web Press v. NLRB, 767 F.2d 321 (7th Cir. 
1985) (holding depreciation properly subtracted when computing ``net 
worth'' of company seeking attorney's fees under the EAJA, since 
legislative history [regarding acquisition cost] ``means only that the 
net worth figure must be derived from company's books rather than from 
appraisal * * * there is no indication that Congress meant by `cost of 
acquisition' undepreciated cost of acquisition'' and subtracting 
accumulated depreciation from cost of acquisition is generally accepted 
accounting practice); See also Am Pac. Pipe Co., Inc. v. NLRB, 788 F.2d 
586 (9th Cir. 1986) (pointing to ``brief sketch of legislative 
history'' and holding that ``Congress would not have wanted us to 
create a whole new set of accounting principles just for use in cases 
under the [EAJA]'').
---------------------------------------------------------------------------
    With regard to Title IV specifically discounting 
consideration of ``special circumstances'' along with 
``substantial justification,'' it was alleged by one witness at 
the February 5, 1998, subcommittee hearing that the legislation 
``would reward those small businesses (and unions) who play 
cat-and-mouse with the Office of the General Counsel'' by 
frustrating the NLRB's investigation with such tactics as, for 
example, ``refusing to allow witnesses to be interviewed, 
withholding documents and substituting lawyers' submissions for 
hard evidence.'' \75\ However, the Committee's intent in 
explicitly discounting ``special circumstances'' as a 
consideration in denying a fee award to a prevailing party is 
not to allow entities with ``unclean hands'' to reap an 
undeserved award, rather, the intent is to prevent the Board 
from advancing ``novel'' theories which it could argue 
justifies denying a small business or union from receiving a 
fee award,\76\ and make inapplicable to entities qualifying 
under Title IV the line of EAJA cases allowing the Board to 
deny awards based on the agency pushing a novel theory of law. 
It is the Committee's view that the NLRB should not be using 
small entities of limited resources as guinea pigs to advance 
new legal theories. Indeed, if the Board wished to advance some 
novel theory of law, to ``push the envelope,'' then let it at 
least do so against those who are larger than 100 employees and 
have a net worth of more than $1.4 million.
---------------------------------------------------------------------------
    \75\ February 5, 1998, written testimony of Richard Griffin, 
general counsel, International Union of Operating Engineers, before the 
Employer-Employee Relations Subcommittee of the House Committee on 
Education and the Workforce, p. 8.
    \76\ See, Teamsters Local 741, 321 NLRB No. 125 (1996) (``the 
general counsel may carry its burden of proving that its position was 
substantially justified by showing its position advanced a novel but 
credible extension or interpretation of the law''); Lion Uniform, 285 
NLRB 249 (1987) (recognizing that ``the special circumstances defense 
available to the agencies is a safety valve' designed to protect the 
government from EAJA award where unusual circumstances dictate that the 
government is advancing in good faith a credible, though novel, rule of 
law,''' citing, H. Rept. 96-1418 at 14 (1980).
---------------------------------------------------------------------------
    As the National Grocers Association pointed out, allowing 
small entities to recoup their expenses when they prevail 
against the Board ``is particularly relevant and timely today, 
as more and more small businesses are being forced to defend 
against test cases' and novel theories that seek to change NLRB 
precedent in favor of organized labor.'' \77\
---------------------------------------------------------------------------
    \77\ Hearing on Review of the National Labor Relations Board, 
before the Subcommittee on Employer-Employee Relations, 105th Cong. 1st 
Sess., at 219 (September 23, 1997) (Serial No. 105-64).
---------------------------------------------------------------------------
    For circumstances in which the business or union has acted 
with ``unclean hands,'' i.e., has been uncooperative or 
unreasonably delayed the Board's investigation, the Committee 
intends that the Board's existing EAJA regulations would cover 
situations involving such equities: ``An award will be reduced 
or denied if the applicant has unduly or unreasonably 
protracted the adversary adjudication or if special 
circumstances make the award sought unjust.'' \78\
---------------------------------------------------------------------------
    \78\ 29 CFR Part 102.144(b).
---------------------------------------------------------------------------
    Title IV says to the NLRB that if it brings a case against 
a little guy it had better make sure the case is a winner, 
because if the Board loses, if it puts the small business or 
union through the time, expense and hardship of an action only 
to have the small entity come out awinner in the end, then the 
Board itself will have to reimburse the employer for its attorney's 
fees and expenses. As Sen. Ted Kennedy, D-MA, stated during floor 
debate on the EAJA, which the Committee views as directly germane to 
Title IV and the NLRB, ``We can no longer tolerate a legal system under 
which unreasonable government action affecting small businesses [and] 
other organizations * * * goes unchallenged because the victims are 
deterred by the legal expense involved.'' \79\ Also, as Sen. Wendell 
Ford, D-KY stated, ``If the agencies choose their cases carefully they 
will be completely unaffected by this legislation.'' \80\ While these 
two Senators supported the EAJA, which now applies to business and 
labor organizations having up to 500 employees and a net worth of no 
more than $7 million, the Committee emphasizes that Title IV seeks 
protection for the very small--those with no more than 100 employees 
and a net worth of no more than $1.4 million.
---------------------------------------------------------------------------
    \79\ July 31, 1979, debate on the EAJA, 125 Cong. Rec. at 21444.
    \80\ Id., at 21439.
---------------------------------------------------------------------------

                               Conclusion

    H.R. 3246 is a targeted bill that seeks to remedy in a 
narrow fashion four specific problems with the National Labor 
Relations Board's enforcement of the National Labor Relations 
Act. Title I simply says to employers that they will not 
violate the NLRA if they do not hire someone who is not a 
``bona fide'' applicant. While it does nothing to impinge upon 
the rights of those who are on the job to do a good job, Title 
I gives employers a certain level of comfort that an applicant 
is at least half motivated to be a loyal, hardworking employee.
    Title II simply codifies the Board's longstanding practice 
of letting an employer present its side of the case in disputes 
concerning single location bargaining units. It ensures that 
the Board will not again try to push its ``ill-conceived,'' 
mechanistic proposed rule which would ignore many factors 
germane to whether a certain bargaining unit is appropriate.
    Title III offers employees whose lives are hanging in the 
balance some assurance that the NLRB will render a decision 
within 365 days on their unfair labor practice charge. Congress 
did not intend that the Board endlessly drag its feet on 
enforcing the Act, and Title III tells the Board it must work 
more quickly to resolve cases in which a discharged employee 
may have been wronged under the NLRA.
    Finally, Title IV ensures that small businesses and small 
unions will have the incentive to fight meritless cases that 
the Board brings against them. If the Board is going to bring 
its vast resources and expertise to bear upon an entity with 
meager resources, then the Board should pay the prevailing 
party's attorney's fees and expense if the agency loses the 
case.

                      Section-by-Section Analysis

Section 1

    Contains the Short Title, ``Fairness for Small Business and 
Employees Act of 1998.''

                                Title I

Section 101

    Establishes the findings of the Committee related to the 
necessity of a healthy atmosphere of trust and civility in 
labor-management relations, the prevalence of ``salting'' 
tactics, and an employer's right to expect job applicants to be 
primarily interested in working for that employer.

Section 102

    Provides that the purpose of Title I is to preserve the 
balance of rights under the NLRA and to alleviate pressure on 
employers to hire individuals who seek or gain employment to 
disrupt the workplace or inflict economic harm to put the 
employer out of business.

Section 103

    Amends the National Labor Relations Act to provide that 
nothing in the NLRA shall require an employer to hire someone 
who is not a ``bona fide'' employee applicant, in that such a 
person seeks or sought employment with the primary purpose of 
furthering other employment or agency status. Also provides 
that this section does not affect any rights and 
responsibilities of any employee so long as they are or were a 
``bona fide'' employee applicant.

                                Title II

Section 201

    Establishes the findings of the Committee related to the 
necessity of fact-specific analysis and case-by-case 
adjudication to determine bargaining units, the longstanding 
practice of the NLRB in holding hearings for such unit 
determinations, and the imprecision and upsetting of labor 
relations stability resulting from any blanket rule which 
limits factors considered material to such single location 
bargaining unit determinations.

Section 202

    Provides that the purpose of Title II is to ensure that the 
NLRB conducts a hearing process and specific analysis of all 
relevant facts and circumstances of a particular case involving 
a single location bargaining unit determination.

Section 203

    Amends the National Labor Relations Act to require that 
when a petition for an election requests the NLRB to certify a 
unit including employees employed at one or more facilities of 
a multi-facility employer, in the absence of an agreement by 
the parties regarding the appropriateness of the bargaining 
unit at issue, that in making its determination the Board shall 
provide for a hearing to consider functional integration, 
centralized control, common skills, functions and working 
conditions, permanent and temporary employee interchange, 
geographical separation, local autonomy, the number of 
employees, bargaining history, if any, and such other factors 
as the Board considers appropriate.

                               Title III

Section 301

    Establishes the findings of the Committee related to the 
right of an employee to be free from discrimination with regard 
to hire or tenure of employment or any term or condition of 
employment to encourage or discourage membership in any labor 
organization, the chilling effect on Section 7 rights of 
discharges, the lengthy delays of the NLRB in rendering 
decisions on such discriminatory unfair labor practice cases, 
the need for the NLRB to resolve such cases in a timely manner, 
and the benefits that timely disposition to employees and to 
employers due to reducing the costs of litigation and backpay 
awards.

Section 302

    Provides that the purpose of Title III is to ensure that 
the NLRB resolves in a timely manner all unfair labor practice 
complaints alleging that an employee has been unlawfully 
discharged to encourage or discourage membership in a labor 
organization.

Section 303

    Amends the National Labor Relations Act to require that the 
NLRB resolve no later than 365 days after the filing of the 
charge any unfair labor practice charge alleging unlawful 
discharge. Also provides an exemption from the one-year time 
limit for cases of ``extreme complexity,'' and requires the 
Board to report annually to the House Committee on Education 
and the Workforce and to the Senate Committee on Labor and 
Human Resources on any such cases pending for more than one 
year, including an explanation of the factors contributing to 
such a delay and recommendations for prompt resolution of such 
cases.

Section 304

    Authorizes the Board to issue any necessary regulations to 
carry out the purposes of Title III.

                                Title IV

Section 401

    Establishes the findings of the Committee related to the 
disadvantage small businesses and labor organizations are at in 
terms of expertise and resources when facing actions brought 
against them by the NLRB, the ineffectiveness and 
underutilization of the Equal Access to Justice Act at the 
NLRB, and the necessity of a different standard that awards 
fees and costs to certain small entities prevailing against the 
Board. Also provides that the purpose of Title IV is to ensure 
that certain small businesses and small labor organizations 
will not be deterred from seeking review of, or defending 
against, Board actions because of the expense involved, to 
reduce the disparity in resources and expertise between certain 
small entities and the NLRB, and to make the Board more 
accountable for its enforcement actions.

Section 402

    Amends the National Labor Relations Act to require the 
Board to pay the attorney's fees and costs of parties who have 
not more than 100 employees and a net worth of not more than 
$1.4 million who prevail against the Board in both 
administrative proceedings or in court proceedings. Also makes 
clear that such fees and costs shall be awarded to such an 
entity as a prevailing party under 5 U.S.C. Sec. 504 and 28 
U.S.C. Sec. 2412(d) of the Equal Access to Justice Act without 
regard to whether the position of the Board or the United 
States was substantially justified or special circumstances 
make an award unjust.

Section 403

    Provides that Section 402 applies to agency proceedings and 
civil actions commenced on or after the date of the enactment 
of this Act.

                        Constitutional Authority

    Each of the four titles of H.R. 3246, the Fairness for 
Small Business and Employees Act, amends the National Labor 
Relations Act. The NLRA has been determined, by the Supreme 
Court, to be within Congress' Constitutional authority.\81\ The 
FSBEA amends the NLRA to provide additional protections for 
small businesses, small labor organizations, and employees, and 
is therefore similarly within the scope of Congressional powers 
under Article 1, Section 8, Clause 3 of the Constitution of the 
United States.
---------------------------------------------------------------------------
    \81\ National Labor Relations Board v. Jones & Laughlin Steel 
Corp., 301 U.S. 1 (1937).
---------------------------------------------------------------------------

                       Explanation of Amendments

    The bill was reported without amendment.

              Application of Law to the Legislative Branch

    Section 102(b)(3) of Public Law 104-1 requires a 
description of the application of this bill to the legislative 
branch. This bill amends the National Labor Relations Act by: 
making it clear that employers are not required to hire someone 
who is not a bona fide applicant; codifying factors used in 
bargaining unit determinations; requiring timely resolution of 
employee discharge cases; and, requiring the NLRB to pay the 
legal costs of small business when the NLRB has brought a 
meritless case against the small business. The bill does not 
prevent legislative branch employees from receiving the 
benefits of this legislation.

                       Unfunded Mandate Statement

    Section 423 of the Congressional Budget and Impoundment 
Control Act requires a statement of whether the provisions of 
the reported bill include unfunded mandates. This bill amends 
the National Labor Relations Act by: making it clear that 
employers are not required to hire someone who is not a bona 
fide applicant; codifying factors used in bargaining unit 
determinations; requiring timely resolution of employee 
discharge cases; and, requiring the NLRB to pay the legal costs 
of small business when the NLRB has brought a meritless case 
against the small business. As such, the bill does not contain 
any unfunded mandates.

  Statement of Oversight Findings and Recommendations of the Committee

    In compliance with clause 2(l)(3)(A) of rule XI and clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
the Committee's oversight findings and recommendations are 
reflected in the body of this report.

 Statement of Oversight Findings of the Committee on Government Reform 
                             and Oversight

    With respect to the requirement of clause 2(l)(3)(D) of 
rule XI of the Rules of the House of Representatives, the 
Committee has received no report of oversight findings and 
recommendations from the Committee on Government Reform and 
Oversight on the subject of H.R. 3246.

                           Committee Estimate

    Clause 7 of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison by the 
Committee of the costs that would be incurred in carrying out 
H.R. 3246. Clause 7(d) of that rule provides that this 
requirement does not apply when the Committee has included in 
its report a timely submitted cost estimate of the bill 
prepared by the Director of the Congressional Budget Office 
under section 403 of the Congressional Budget Act. The 
Committee therefore has not prepared a comprehensive estimate; 
but the Committee has following comments on the CBO estimate.
    It is the Committee's view that CBO's estimate that Title 
IV of H.R. 3246, addressing attorney's fees, will cost about $1 
million a year, is too high, extremely speculative and based 
upon assumptions that appear to be pulled out of thin air. The 
Committee notes that in arriving at its estimate of Title IV, 
CBO acknowledges that the NLRB itself does not keep net worth 
figures of those against whom it brings cases. Therefore, in 
estimating those prevailing parties meeting both Title IV 
eligibility limitations of up to 100 employees and a net worth 
of up to $1.4 million, CBO has simply imported some general 
data from Dun & Bradstreet estimates and apparently assumed 
that every entity with no more than 100 employees also has a 
net worth of no more than $1.4 million.
    Similarly, in light of the fact that fee applications filed 
under the Equal Access to Justice Act (EAJA) have cost the 
Board a total of roughly $1.42 million since 1982, and the fact 
that CBO was off on its original scoring of the EAJA by roughly 
10,000 percent (100 times), it is the Committee's view that an 
annual cost of $1 million for Title IV is too high.

     Budget Authority and Congressional Budget Office Cost Estimate

    With respect to the requirements of clause 2(l)(3)(B) of 
rule XI of the House of Representatives and section 308(a) of 
the Congressional Budget Act of 1974 and with respect to 
requirements of 2(l)(3)(C) of rule XI of the House of 
Representatives and section 403 of the Congressional Budget Act 
of 1974, the Committee has received the following cost estimate 
for H.R. 3246 from the Director of the Congressional Budget 
Act:

                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC, March 11, 1998.
Hon. William F. Goodling,
Chairman, Committee on Education and the Workforce,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 3246, the Fairness 
for Small Business and Employees Act of 1998.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Christina 
Hawley Sadoti.
            Sincerely,
                                         June E. O'Neill, Director.
    Enclosure.

H.R. 3246--Fairness for Small Business and Employees Act of 1988

    Summary: H.R. 3246 would increase spending by the National 
Labor Relations Board (NLRB) by allowing private parties with 
100 or fewer employees and a net worth of $1.4 million or less 
to be awarded attorney's fees and expenses if they do prevail 
against the NLRB in administrative or judicial proceedings. The 
additional spending, about $1 million in 1999, and $5 million 
over the 1999-2003 period, would be subject to the annual 
appropriations process.
    H.R. 3246 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act of 1995 
(UMRA).
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 3246 is shown in the following table.
    The costs of this legislation fall within budget function 
500 (education, training, employment, and social services).

                                    [By fiscal year, in millions of dollars]                                    
----------------------------------------------------------------------------------------------------------------
                                                              1998     1999     2000     2001     2002     2003 
----------------------------------------------------------------------------------------------------------------
                                        SPENDING SUBJECT TO APPROPRIATION                                       
                                                                                                                
Spending by the NLRB under current law:                                                                         
    Budget authority......................................      175      184      191      199      207      215
    Estimated outlays.....................................      175      184      191      198      206      215
                                                                                                                
                                         With Adjustments for Inflation                                         
                                                                                                                
Proposed changes:                                                                                               
    Estimated authorization levels........................  .......        1        1        1        1        1
    Estimated outlays.....................................  .......        1        1        1        1        1
Spending under H.R. 3246:                                                                                       
    Estimated authorization levels........................      175      185      192      200      208      216
    Estimated outlays.....................................      175      185      192      199      207      216
                                                                                                                
                                        Without Adjustments for Inflation                                       
                                                                                                                
Spending by the NLRB under current law:                                                                         
    Budget authority......................................      175      175      175      175      175      175
    Estimated outlays.....................................      175      175      175      175      175      175
Proposed changes:                                                                                               
    Estimated authorization levels........................  .......        1        1        1        1        1
    Estimated outlays.....................................  .......        1        1        1        1        1
Spending under H.R. 3246:                                                                                       
    Estimated authorization levels........................      175      176      176      176      176      176
    Estimated outlays.....................................      175      176      176      176      176      176
----------------------------------------------------------------------------------------------------------------

Basis of estimate

            Spending subject to appropriation
    H.R. 3246 would amend the National Labor Relations Act 
(NLRA) in four areas. First, the bill would make it easier for 
employers to deny employment to applicants who are not ``bona 
fide'' employee applicants. This provision would allow 
employers to refuse to hire union organizers who seek jobs with 
the intention of organizing workers. Current law prohibits 
employers from discriminating against prospective employees 
based on their union membership status. Second, the bill would 
require the National Labor Relations Board tohold hearings in 
some cases where employees petition for representation elections. 
Third, it would set time limits for the NLRB to resolve complaints, and 
would require the NLRB to report to Congress on cases that are pending 
for more than one year. Fourth, the bill would allow employers and 
labor organizations with fewer than 100 employees and less than $1.4 
million in net worth to be awarded attorneys fees and expenses if they 
prevail in an adversary adjudication or a court proceeding.
    The only provision with a significant budgetary impact is 
that allowing certain relatively small firms and labor 
organizations to recover their legal expenses following 
favorable rulings. The increase in spending due to this change 
would probably be small--about $1 million per year, on average. 
Under the Equal Access to Justice Act (EAJA), the payments of 
fees and expenses would be made from the agency's discretionary 
appropriations.
    The bill would allow employers and labor organizations that 
have fewer than 100 employees and a net worth of $1.4 million 
or less to be awarded attorney's fees and expenses in cases 
where they prevail against the NLRB, regardless of whether the 
position of the NLRB was substantially justified. Currently 
under the EAJA, a prevailing party with fewer than 500 
employees and less than $7 million in net worth may recover 
fees and expenses, but only if the party can prove that the 
position of the United States was substantially unjustified. In 
practice, it is very difficult for a prevailing party to prove 
that the U.S. government did not have substantial justification 
in bringing a claim forward. Since 1982, 345 parties involved 
in NLRB cases have filed applications under this provision. Of 
these applications, only 56 were granted, with total awards of 
approximately $1.4 million in fees and expenses. This bill 
would make it easier for very small businesses to recover fees 
and expenses by not requiring them to prove that the U.S. 
government was not substantially justified.
    About half of the unfair labor practice cases brought by 
the NLRB involve establishments with less than 100 employees. 
Although the NLRB does not keep data on the net worth of the 
business against which it brings cases, the business 
information services firm of Dun & Bradstreet estimates that 
the distribution of net worth is roughly similar to the 
distribution of the number of employees per establishment. For 
purposes of this estimate, CBO assumes that about half of the 
cases lost by the NLRB--or about 40 per year--involve 
establishments with fewer than 100 employees and a net worth of 
less than $1.4 million. Assuming an average cost per case of 
$25,000, enactment of H.R. 3246 would increase spending by the 
NLRB by about $1 million per year.
    Pay-as-you-go considerations: None.
    Intergovernmental and private-sector impact: H.R. 3246 
contains no intergovernmental or private-sector mandates as 
defined in the Unfunded Mandates Reform Act of 1995 and would 
not affect the budgets of state, local, or tribal governments.
    Estimate prepared by: Federal cost: Christina Hawley 
Sadoti; Impact on State, local, and tribal governments: Marc 
Nicole; Impact on the private sector; Nabeel Alsalam.
    Estimate approved by: Paul N. Van de Water, Assistant 
Director for Budget Analysis.

                             Rollcall Votes

    Rollcall: 1.
    Bill: H.R. 3246.
    Date: March 11, 1998.
    Amendment number: 1.
    Defeated: 15-19.
    Sponsor/Amendment: Mr. Payne/amendment to strike title I.

------------------------------------------------------------------------
                                                                  Not   
           Member                Aye         No      Present     voting 
------------------------------------------------------------------------
Mr. Goodling, Chairman......  .........         X   .........  .........
Mr. Petri, Vice Chairman....  .........         X   .........  .........
Mrs. Roukema................  .........  .........  .........         X 
Mr. Fawell..................  .........         X   .........  .........
Mr. Ballenger...............  .........         X   .........  .........
Mr. Barrett.................  .........         X   .........  .........
Mr. Hoekstra................  .........  .........  .........         X 
Mr. McKeon..................  .........         X   .........  .........
Mr. Castle..................  .........         X   .........  .........
Mr. Johnson.................  .........         X   .........  .........
Mr. Talent..................  .........         X   .........  .........
Mr. Greenwood...............  .........         X   .........  .........
Mr. Knollenberg.............  .........  .........  .........         X 
Mr. Riggs...................  .........  .........  .........         X 
Mr. Graham..................  .........         X   .........  .........
Mr. Souder..................  .........         X   .........  .........
Mr. McIntosh................  .........         X   .........  .........
Mr. Norwood.................  .........         X   .........  .........
Mr. Paul....................  .........         X   .........  .........
Mr. Schaffer................  .........  .........  .........         X 
Mr. Peterson................  .........         X   .........  .........
Mr. Upton...................  .........         X   .........  .........
Mr. Deal....................  .........         X   .........  .........
Mr. Hilleary................  .........         X   .........  .........
Mr. Scarborough.............  .........  .........  .........         X 
Mr. Clay....................         X   .........  .........  .........
Mr. Miller..................  .........  .........  .........         X 
Mr. Kildee..................         X   .........  .........  .........
Mr. Martinez................         X   .........  .........  .........
Mr. Owens...................         X   .........  .........  .........
Mr. Payne...................  .........  .........  .........         X 
Mrs. Mink...................         X   .........  .........  .........
Mr. Andrews.................         X   .........  .........  .........
Mr. Roemer..................         X   .........  .........  .........
Mr. Scott...................         X   .........  .........  .........
Ms. Woolsey.................         X   .........  .........  .........
Mr. Romero-Barcelo..........         X   .........  .........  .........
Mr. Fattah..................         X   .........  .........  .........
Mr. Hinojosa................  .........  .........  .........         X 
Mrs. McCarthy...............         X   .........  .........  .........
Mr. Tierney.................         X   .........  .........  .........
Mr. Kind....................         X   .........  .........  .........
Ms. Sanchez.................         X   .........  .........  .........
Mr. Ford....................  .........  .........  .........         X 
Mr. Kucinich................  .........  .........  .........         X 
                             -------------------------------------------
      Totals................        15         19   .........        11 
------------------------------------------------------------------------

    Rollcall: 2.
    Bill: H.R. 3246.
    Date: March 11, 1998.
    Amendment number: 2.
    Defeated: 17-20.
    Sponsor/Amendment: Mr. Clay/amendment to strike title II.

------------------------------------------------------------------------
                                                                  Not   
           Member                Aye         No      Present     voting 
------------------------------------------------------------------------
Mr. Goodling, Chairman......  .........         X   .........  .........
Mr. Petri, Vice Chairman....  .........         X   .........  .........
Mrs. Roukema................  .........  .........  .........         X 
Mr. Fawell..................  .........         X   .........  .........
Mr. Ballenger...............  .........         X   .........  .........
Mr. Barrett.................  .........         X   .........  .........
Mr. Hoekstra................  .........         X   .........  .........
Mr. McKeon..................  .........         X   .........  .........
Mr. Castle..................  .........         X   .........  .........
Mr. Johnson.................  .........         X   .........  .........
Mr. Talent..................  .........         X   .........  .........
Mr. Greenwood...............  .........         X   .........  .........
Mr. Knollenberg.............  .........         X   .........  .........
Mr. Riggs...................  .........  .........  .........         X 
Mr. Graham..................  .........  .........  .........         X 
Mr. Souder..................  .........         X   .........  .........
Mr. McIntosh................  .........         X   .........  .........
Mr. Norwood.................  .........         X   .........  .........
Mr. Paul....................  .........         X   .........  .........
Mr. Schaffer................  .........  .........  .........         X 
Mr. Peterson................  .........         X   .........  .........
Mr. Upton...................  .........         X   .........  .........
Mr. Deal....................  .........         X   .........  .........
Mr. Hilleary................  .........         X   .........  .........
Mr. Scarborough.............  .........  .........  .........         X 
Mr. Clay....................         X   .........  .........  .........
Mr. Miller..................  .........  .........  .........         X 
Mr. Kildee..................         X   .........  .........  .........
Mr. Martinez................         X   .........  .........  .........
Mr. Owens...................         X   .........  .........  .........
Mr. Payne...................  .........  .........  .........         X 
Mrs. Mink...................         X   .........  .........  .........
Mr. Andrews.................         X   .........  .........  .........
Mr. Roemer..................         X   .........  .........  .........
Mr. Scott...................         X   .........  .........  .........
Ms. Woolsey.................         X   .........  .........  .........
Mr. Romero-Barcelo..........         X   .........  .........  .........
Mr. Fattah..................         X   .........  .........  .........
Mr. Hinojosa................         X   .........  .........  .........
Mrs. McCarthy...............         X   .........  .........  .........
Mr. Tierney.................         X   .........  .........  .........
Mr. Kind....................         X   .........  .........  .........
Ms. Sanchez.................         X   .........  .........  .........
Mr. Ford....................  .........  .........  .........         X 
Mr. Kucinich................         X   .........  .........  .........
                             -------------------------------------------
      Totals................        17         20   .........         8 
------------------------------------------------------------------------

    Roll call: 3.
    Bill: H.R. 3246.
    Date: March 11, 1998.
    Amendment number: 4.
    Defeated: 18-22.
    Sponsor/Amendment: Mr. Scott/amendment to strike title IV.

------------------------------------------------------------------------
                                                                  Not   
           Member                Aye         No      Present     voting 
------------------------------------------------------------------------
Mr. Goodling, Chairman......  .........         X   .........  .........
Mr. Petri, Vice Chairman....  .........         X   .........  .........
Mrs. Roukema................  .........  .........  .........         X 
Mr. Fawell..................  .........         X   .........  .........
Mr. Ballenger...............  .........         X   .........  .........
Mr. Barrett.................  .........         X   .........  .........
Mr. Hoekstra................  .........         X   .........  .........
Mr. McKeon..................  .........         X   .........  .........
Mr. Castle..................  .........         X   .........  .........
Mr. Johnson.................  .........         X   .........  .........
Mr. Talent..................  .........         X   .........  .........
Mr. Greenwood...............  .........         X   .........  .........
Mr. Knollenberg.............  .........         X   .........  .........
Mr. Riggs...................  .........  .........  .........         X 
Mr. Graham..................  .........         X   .........  .........
Mr. Souder..................  .........         X   .........  .........
Mr. McIntosh................  .........         X   .........  .........
Mr. Norwood.................  .........         X   .........  .........
Mr. Paul....................  .........         X   .........  .........
Mr. Schaffer................  .........  .........  .........         X 
Mr. Peterson................  .........         X   .........  .........
Mr. Upton...................  .........         X   .........  .........
Mr. Deal....................  .........         X   .........  .........
Mr. Hilleary................  .........         X   .........  .........
Mr. Scarborough.............  .........         X   .........  .........
Mr. Clay....................         X   .........  .........  .........
Mr. Miller..................  .........  .........  .........         X 
Mr. Kildee..................         X   .........  .........  .........
Mr. Martinez................         X   .........  .........  .........
Mr. Owens...................         X   .........  .........  .........
Mr. Payne...................         X   .........  .........  .........
Mrs. Mink...................         X   .........  .........  .........
Mr. Andrews.................         X   .........  .........  .........
Mr. Roemer..................         X   .........  .........  .........
Mr. Scott...................         X   .........  .........  .........
Ms. Woolsey.................         X   .........  .........  .........
Mr. Romero-Barcelo..........         X   .........  .........  .........
Mr. Fattah..................         X   .........  .........  .........
Mr. Hinojosa................         X   .........  .........  .........
Mrs. McCarthy...............         X   .........  .........  .........
Mr. Tierney.................         X   .........  .........  .........
Mr. Kind....................         X   .........  .........  .........
Ms. Sanchez.................         X   .........  .........  .........
Mr. Ford....................  .........  .........  .........         X 
Mr. Kucinich................         X   .........  .........  .........
                             -------------------------------------------
      Totals................        18         22   .........         5 
------------------------------------------------------------------------

    Rollcall: 4
    Bill: H.R. 3246.
    Date: March 11, 1998.
    Passed 23-18.
    Sponsor/Amendment: Mr. Petri/motion to report the bill to 
the House with the recommendation that the bill do pass.

------------------------------------------------------------------------
                                                                  Not   
           Member                Aye         No      Present     voting 
------------------------------------------------------------------------
Mr. Goodling, Chairman......         X   .........  .........  .........
Mr. Petri, Vice Chairman....         X   .........  .........  .........
Mrs. Roukema................  .........  .........  .........         X 
Mr. Fawell..................         X   .........  .........  .........
Mr. Ballenger...............         X   .........  .........  .........
Mr. Barrett.................         X   .........  .........  .........
Mr. Hoekstra................         X   .........  .........  .........
Mr. McKeon..................         X   .........  .........  .........
Mr. Castle..................         X   .........  .........  .........
Mr. Johnson.................         X   .........  .........  .........
Mr. Talent..................         X   .........  .........  .........
Mr. Greenwood...............         X   .........  .........  .........
Mr. Knollenberg.............         X   .........  .........  .........
Mr. Riggs...................  .........  .........  .........         X 
Mr. Graham..................         X   .........  .........  .........
Mr. Souder..................         X   .........  .........  .........
Mr. McIntosh................         X   .........  .........  .........
Mr. Norwood.................         X   .........  .........  .........
Mr. Paul....................         X   .........  .........  .........
Mr. Schaffer................         X   .........  .........  .........
Mr. Peterson................         X   .........  .........  .........
Mr. Upton...................         X   .........  .........  .........
Mr. Hilleary................         X   .........  .........  .........
Mr. Scarborough.............         X   .........  .........  .........
Mr. Clay....................  .........         X   .........  .........
Mr. Miller..................  .........  .........  .........         X 
Mr. Kildee..................  .........         X   .........  .........
Mr. Martinez................  .........         X   .........  .........
Mr. Owens...................  .........         X   .........  .........
Mr. Payne...................  .........         X   .........  .........
Mrs. Mink...................  .........         X   .........  .........
Mr. Andrews.................  .........         X   .........  .........
Mr. Roemer..................  .........         X   .........  .........
Mr. Scott...................  .........         X   .........  .........
Ms. Woolsey.................  .........         X   .........  .........
Mr. Romero-Barcelo..........  .........         X   .........  .........
Mr. Fattah..................  .........         X   .........  .........
Mr. Hinojosa................  .........         X   .........  .........
Mrs. McCarthy...............  .........         X   .........  .........
Mr. Tierney.................  .........         X   .........  .........
Mr. Kind....................  .........         X   .........  .........
Ms. Sanchez.................  .........         X   .........  .........
Mr. Ford....................  .........  .........  .........         X 
Mr. Kucinich................  .........         X   .........  .........
                             -------------------------------------------
      Totals................        23         18   .........         4 
------------------------------------------------------------------------

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3 of rule XIII of the Rules of the 
House of Representatives, changes in existing law made by the 
bill, as reported, are shown as follows (new matter is printed 
in italic and existing law in which no change is proposed is 
shown in roman):

NATIONAL LABOR RELATIONS ACT

           *       *       *       *       *       *       *


                         unfair labor practices

  Sec. 8. (a) It shall be an unfair labor practice for an 
employer--
          (1) * * *

           *       *       *       *       *       *       *

          (5) to refuse to bargain collectively with the 
        representatives of his employees, subject to the 
        provisions of section 9(a).
Nothing in this subsection shall be construed as requiring an 
employer to employ any person who is not a bona fide employee 
applicant, in that such person seeks or has sought employment 
with the employer with the primary purpose of furthering 
another employment or agency status: Provided, That this 
sentence shall not affect the rights and responsibilities under 
this Act of any employee who is or was a bona fide employee 
applicant.

           *       *       *       *       *       *       *


                     representatives and elections

  Sec. 9. (a) * * *

           *       *       *       *       *       *       *

  (c)(1) * * *

           *       *       *       *       *       *       *

  (6) If a petition for an election requests the Board to 
certify a unit which includes the employees employed at one or 
more facilities of a multi-facility employer, and in the 
absence of an agreement by the parties (stipulation for 
certification upon consent election or agreement for consent 
election) regarding the appropriateness of the bargaining unit 
at issue for purposes of subsection (b), the Board shall 
provide for a hearing upon due notice to determine the 
appropriateness of the bargaining unit. In making its 
determination, the Board shall consider functional integration, 
centralized control, common skills, functions and working 
conditions, permanent and temporary employee interchange, 
geographical separation, local autonomy, the number of 
employees, bargaining history, and such other factors as the 
Board considers appropriate.

           *       *       *       *       *       *       *


                  prevention of unfair labor practices

  Sec. 10. (a) * * *

           *       *       *       *       *       *       *

  (m) Whenever it is charged that any person has engaged in an 
unfair labor practice within the meaning of subsection (a)(3) 
or (b)(2) of section 8, such charge shall be given priority 
over all other cases except cases of like character in the 
office where it is filed or to which it is referred and cases 
given priority under subsection (i). Whenever a complaint is 
issued as provided in subsection (b) upon a charge that any 
person has engaged in or is engaging in an unfair labor 
practice within the meaning of subsection (a)(3) or (b)(2) of 
section 8 involving an unlawful discharge, the Board shall 
state its findings of fact and issue and cause to be served on 
such person an order requiring such person to cease and desist 
from such unfair labor practice and to take such affirmative 
action, including reinstatement of an employee with or without 
backpay, as will effectuate the policies of this Act, or shall 
state its findings of fact and issue an order dismissing the 
said complaint, not later than 365 days after the filing of the 
unfair labor practice charge with the Board except in cases of 
extreme complexity. The Board shall submit a report annually to 
the Committee on Education and the Workforce of the House of 
Representatives and the Committee on Labor and Human Resources 
of the Senate regarding any cases pending for more than 1 year, 
including an explanation of the factors contributing to such a 
delay and recommendations for prompt resolution of such cases.

           *       *       *       *       *       *       *



                  awards of attorneys' fees and costs


  Sec. 20. (a) Administrative Proceedings.--An employer who, or 
a labor organization that--
          (1) is the prevailing party in an adversary 
        adjudication conducted by the Board under this or any 
        other Act, and
          (2) had not more than 100 employees and a net worth 
        of not more than $1,400,000 at the time the adversary 
        adjudication was initiated,
shall be awarded fees and other expenses as a prevailing party 
under section 504 of title 5, United States Code, in accordance 
with the provisions of that section, but without regard to 
whether the position of the Board was substantially justified 
or special circumstances make an award unjust. For purposes of 
this subsection, the term ``adversary adjudication'' has the 
meaning given that term in section 504(b)(1)(C) of title 5, 
United States Code.
  (b) Court Proceedings.--An employer who, or a labor 
organization that--
          (1) is the prevailing party in a civil action, 
        including proceedings for judicial review of agency 
        action by the Board, brought by or against the Board, 
        and
          (2) had not more than 100 employees and a net worth 
        of not more than $1,400,000 at the time the civil 
        action was filed,
 shall be awarded fees and other expenses as a prevailing party 
under section 2412(d) of title 28, United States Code, in 
accordance with the provisions of that section, but without 
regard to whether the position of the United States was 
substantially justified or special circumstances make an award 
unjust. Any appeal of a determination of fees pursuant to 
subsection (a) or this subsection shall be determined without 
regard to whether the position of the United States was 
substantially justified or special circumstances make an award 
unjust.

                             MINORITY VIEWS

            h.r. 3246 strikes at the very heart of the nlra

    Under the guise of ``[a]chieving [f]airness for [s]mall 
[b]usiness and [e]mployees,'' H.R. 3246 represents a major 
assault on the National Labor Relations Act (NLRA). Through its 
four disparate provisions, the entire bill undercuts the 
fundamental right of workers to choose a collective bargaining 
representative without employer coercion and prohibits 
effective use of the National Labor Relations Board's (NLRB) 
resources to enforce the Act.
    Title I, ``Truth in Employment,'' declares that job 
applicants who ``seek employment . . . with the primary purpose 
of furthering another employment or agency status'' fall 
outside of a newly-created class of ``bona fide employee 
applicant[s],'' and gives employers license to refuse to hire 
them. In so doing, Title I denies employment to those union 
supporters who seek jobs at non-union worksites, solely because 
they may exercise their right to engage in collective action.
    Title II, ``Fair Hearing,'' requires the Board to apply a 
confusing, subjective and multifactored test to determine the 
appropriateness of a single-location bargaining unit whenever 
it receives an election petition for a unit of employees ``at 
one or more facilities of a multi-facility employer,'' rather 
than to apply the rational test it has developed over the 
course of thirty years. Title II thus provides employers who 
oppose unionization a potent weapon to delay and challenge 
Board elections, despite the clear will of their employees to 
choose union representation.
    Title III, ``Justice on Time,'' requires the Board to issue 
findings and an order within 365 days of receiving an unfair 
labor practice charge alleging an unlawful discharge in 
violation of Section 8(a)(3) or 8(b)(2) of the Act, ``except in 
cases of extreme complexity.'' At the same time, Title III 
fails to provide for the necessary increase in Board resources 
to make this guarantee anything more than a drain on already 
overworked agency personnel. In addition, Title III fails to 
address two critical and related issues. First, the NLRA should 
provide for immediate reinstatement of an employee discharged 
for the exercise of protected rights during the period 
preceding a Board order. Second, the NLRA should make clear 
that Board orders take effect immediately, to remove the delay 
now attendant upon judicial review.
    Title IV, ``Attorneys Fees,'' seeks to reverse the American 
Rule with respect to attorneys' fees in a single class of 
cases, namely, those in which the NLRB does not prevail in 
administrative or judicial proceedings against an employer or 
labor organization with not more than 100 employees and a net 
worth of not more than $1.4 million. Not only has the Majority 
failed to provide any evidence whatsoever that the Board has 
abused its statutory authority in issuing and prosecuting 
complaints, but it has also failed to show why the Equal Access 
to Justice Act, 5 U.S.C. 504, provides insufficient redress to 
respondents who prevail in proceedings before the National 
Labor Relations.
    None of the measures contained in this bill are new, and as 
we discuss below, they have already failed to withstand the 
scrutiny of the NLRB, the courts, and the Congress. 
Nonetheless, the Committee, along party lines, has voted to 
bundle together these disparate proposals, and thereby report 
out a bill that threatens the right of employees to opt for 
collective representation free of employer interference, and 
the statutory responsibility of the Board to enforce that 
right.As such, H.R. 3246 reverses over 50 years of 
Congressional policy promoting workplace freedom of association ``as an 
instrument of peace rather than of strife.'' NLRB v. Jones & Laughlin 
Steel Corp., 301 U.S. 1, 34 (1937).

   Despite Its Title, This Bill Covers The Vast Majority of American 
                               Workplaces

    Although the Majority captions this bill the ``Fairness for 
Small Business and Employees Act of 1998,'' the enormous scope 
of the proposal belies such a misleading title. In fact, three 
out of four of the bill's provisions contain no limitations 
whatsoever on the size of the employers to which they apply. 
Thus, Title I provides universal protection to employers who 
refuse to hire union supporters; Title II imposes a universal 
requirement that the Board apply confusing and time-consuming 
factors in determining the appropriateness of single-facility 
units; and Title III imposes a 365-day limit on the Board's 
consideration of every 8(a)(3) or 8(b)(2) complaint. Only Title 
IV of the bill purports to limit itself to small businesses and 
labor organizations. Yet, by imposing a ceiling of 100 
employees, the bill would cover almost 40 percent of American 
workers. See U.S. Census Bureau, Statistics of U.S. Businesses, 
Chart A, internet: http://www.census.gov. In contrast, Congress 
traditionally defines ``small business'' for the purpose of 
establishing coverage under a wide range of employment-related 
laws by imposing a far smaller ceiling on the size of the 
workforce. The Age Discrimination in Employment Act, for 
example, applies to employers who have ``twenty or more 
employees for each working day in each of twenty or more 
calendar weeks in the current or preceding calendar year.'' 29 
U.S.C. 630(b). Similarly, 42 U.S.C. 2111(5), as does Title VII 
of the Civil Rights Act of 1964, 42 U.S.C. 2000e(b). Thus, the 
Majority's definition of ``small business'' in H.R. 3246 serves 
a rhetorical purpose only; in practice, it achieves nearly-
universal coverage.

        h.r. 3246 undermines the nlra's principle of free choice

    Nor is there anything ``fair'' to employees about the 
``Fairness to Small Business and Employees Act.'' The NLRA 
recognizes the ``fundamental right'' of employees ``to select 
representatives of their own choosing for collective bargaining 
* * * without restraint or coercion by their employer.'' Jones 
& Laughlin, 301 U.S. at 33. Indeed, ``such collective action 
would be a mockery if representation we were made futile by 
interference with freedom of choice.'' Id. at 34. Yet this is 
precisely what H.R. 3246 would accomplish, by creating a new 
class of job applicants who are not entitled to a job solely by 
virtue of their support for collective representation; 
prohibiting workers from exercising their statutory 
``initiative * * * [to] select [] an appropriate [bargaining] 
unit'' in any case in which they petition for an election 
(American Hospital Ass'n v. NLRB, 499 U.S. 606 (1991)); 
interfering with the Board's enforcement efforts by imposing 
strict deadlines on case adjudication without a corresponding 
increase in resources; and reducing the Board's extremely 
limited budget by making it pay opponents' costs in 
administrative and judicial proceedings.

    genuine labor law reform would strengthen, not gut, the nlra's 
                        guarantee of free choice

    The policy behind enactment of the NLRA was to 
``encourag[e] the practice and procedure of collective 
bargaining,'' 29 U.S.C. 151, because ``union[s] * * * [are] 
essential to give laborers opportunity to deal on an equality 
with their employer.'' Jones & Laughlin, 301 U.S. at 33. This 
continues to be the case. Unions give workers a voice in how 
best to get the work done. They help workers get fairly 
compensated for the contributions they make, as evidenced by 
thefact that union workers earn an average of 33% more than 
their nonunion counterparts and are much more likely to have health and 
pension benefits. Unions raise living standards, secure families' 
futures, and strengthen communities.
    Indeed, unions play a key role in eliminating America's 
economic disparities. As the unionized share of the workforce 
has declined, income inequality increased dramatically because 
unions are the primary mechanism for balancing labor and 
capital. Only a stronger labor movement will reverse these 
economic disparities. Unions help close the wage gaps of women 
and people of color. Unions fight discrimination and actively 
promote civil and human rights, equal treatment and 
opportunity, and affirmative action.
    Yet the long history of employers' attempts to influence 
and interfere with their employees' choice in favor of 
collective representation, aided by the development of the law, 
demonstrates that many employers have never stopped challenging 
the basic assumption on which the NLRA rests, that collective 
representation promotes America's economic and social good. Of 
the 3,154 complaints issued by the NLRB General Counsel in 
Fiscal year 1996, 92.6 percent were against employers. ``Sixty-
First Annual Report of the National Labor Relations Board for 
the Fiscal Year Ended September 30, 1996'' (FY `96 Report) at 
5. The majority of these charges alleged illegal discharge or 
other discrimination against employees: 56 percent of the total 
charges against employers contained such allegations. Id. at 6. 
Indeed, Professor Paul Weiler estimates that ten thousand 
working Americans lose their jobs every year, just for 
supporting the union.
    In countless organizing campaigns, a majority of workers 
sign authorization cards asserting their desire for union 
representation but are thwarted by their employer's anti-union 
campaign. Aided by a $300 million-a-year consulting industry, 
many employers have learned to circumvent and manipulate the 
law, stall the organizing process, and harass, threaten, and 
even fire workers for trying to organize, with minimal 
penalties at best. Under present law, for example, it is not 
considered coercion or discrimination for an employer to order 
all employees to listen to a speech or watch a video urging 
them to vote against representation Employees who refuse to 
attend, or who leave an employer's anti-union campaign meetings 
can be disciplined, including being fired. Employers may (and 
routinely do) exclude known union supporters from such 
meetings, not only to ensure no opposition to their anti-union 
message, but to create the impression of unanimous anti-union 
sentiment. While the employer cannot lawfully claim that it 
will close the plant or move the firm if the union wins the 
election, it can lawfully report on all of the other plants 
that have done so. Similarly, the law protects an employer's 
free speech right to comment on what has happened to employees 
at other firms who voted for a union.
    At the same time, the law gives employers almost exclusive 
control over access to employees during the campaign period 
leading up to a representation election. While they may hold 
potential voters as captive audiences for eight hours a day, 
employers may also lawfully exercise their property rights over 
their workplaces to prohibit union organizers from entering 
during the entire course of a representation campaign, and 
prohibit employees from discussing the union among themselves 
except at break times.
    Many of today's union organizing campaigns are thus 
characterized by the repeated employer message that if workers 
choose a union they will pay a price, both individually and 
collectively. An election conducted in a climate of fear in 
which one party has complete control over the other hardly 
meets the test of ``democratic'' process--although it may be a 
``legal'' election.
    A few examples drawn from the struggles of low-wage workers 
to exercise their right of self-organization demonstrate how 
the level playing field envisioned by the NLRA has turned into 
a hostile environment in which employers have a host of 
``lawful'' weapons at their disposal to defeat their employees' 
efforts. Even where employees overcome these hurdles, at 
tremendous personal cost, and win a representation election, 
they are a long way from achieving an initial collection 
bargaining agreement.
    Julia Lopez is a single mother of two daughters, ages 20 
and 22 years. Originally from Managua, Nicaragua, Julia 
immigrated to the United States in 1973, and lives in Los 
Angeles, California. In 1980, she began working as a janitor at 
a large university, cleaning classrooms, scrubbing toilets and 
mopping floors. She continues to work at the university, but no 
longer as an employee of the university. On March 1, 1996, 
Julia became an employee of a janitorial contractor of the 
university.
    The university is the largest private employer in the city, 
employing 17,170 people on its main and health campuses.
    On March 1, 1996, the university contracted out all its 
janitorial work to a national corporation which specializes in 
institutional cleaning and landscaping. The janitors, many of 
them long-term employees (10-30 years) of the university, were 
told that their jobs and wages would be maintained. Since then, 
however, they have seen their real wages decline, have had 
their benefits eliminated or eroded, and many (including a 
number of strong union supporters) have been fired or laid off.
    The university maintains it is no longer the employer of 
the janitors and is unable to stop the changes in working 
conditions brought on by its decision to subcontract the 
janitorial work on campus. Yet it has taken out full page ads 
in the campus newspaper supporting the contractor, obtained an 
injunction limiting union protests on its campus, and had union 
organizers arrested. Nonetheless, the campaign to organize a 
union for the the janitors continues in face of these odds.
    Elisa Lopez is a single parent, mother of two children, 
ages five and six years old. She is a native of Mexico and 
lives in the San Francisco Bay area. In the spring and early 
summer of 1994, Elisa worked as a telemarketing employee for 
the Spanish-language telemarketing arm of a large company. 
Elisa lost her job in July 1994, when this multinational 
corporation closed the doors of its San Francisco location 
during an effort by the workers to organize a union.
    In February of 1994, the 235 Latino/a employees in San 
Francisco, California, began their campaign to organize a 
union. Working in what came to be exposed as an ``electronic 
sweatshop,'' these Spanish-language telemarketers were 
organizing a union around issues of pay and unfair treatment. 
Within months of starting their campaign, 70% of the workers 
had signed union authorization cards indicating their desire to 
be represented by the Communications Workers of America (CWA). 
The CWA petitions the NLRB for a representation election and an 
election date was set.
    On July 14, 1994, eight days before the union 
representation election, the company shut the doors at the 
facility, throwing more than 200 workers out of work. The shut 
down was not the company's only violation of federal labor law. 
Its anti-union campaign was characterized by surveillance of 
union supporters, interrogation of workers about the campaign, 
open threats, and promises of benefits. During a hearing before 
an administrative law judge, the companyunashamedly admitted to 
50 such violations.
    About two and a half years later, on December 27, 1996, the 
NLRB affirmed that the closing violated federal law, and 
ordered the company to rehire the workers with full back pay. 
The company immediately filed an appeal of the ruling that will 
keep the case bogged down in the legal system for many years.
    Cathy Sharp is a single mother who has raised two sons 
alone since 1985. She and her boys live in San Diego beach 
community. A hospital in San Diego, California, has employed 
Cathy since 1976. She has worked in multiple roles, such as 
medical/surgical nursing, orthopedics, neurology, ICU, 
management and staff training. Cathy currently is a Clinical 
Nurse III, working in ICU specializing in heart and lung 
transplants.
    In February, 1994, 2,500 nurses across the hospital system 
in San Diego started organizing with the help of AFSCME's 
United Nurses Association of California, when nursing practice 
began to erode dramatically, having a negative impact on 
patients and nurses. Soon thereafter, the hospital, a non-
profit corporation, entered into a joint venture with the 
largest for-profit health care company in America.
    On June 20-21, 1996, the nurses voted in a National Labor 
Relations Board election by a 2-1 margin (1,114 to 622) for 
union representation. The NLRB vote came after an intense 
campaign of delay and intimidation waged by the hospital and 
the health-care company.
    Senior company executives have been quoted as saying they 
don't care whether their employees vote to unionize or not. The 
company will simply ignore the election results and refuse to 
bargain. The company, to date, has never negotiated a first 
collective bargaining agreement with employers who voted to 
form a union in an election conducted under the company's 
ownership. True to form, since the June 1966 election, the 
hospital has engaged in a series of delaying tactics aimed at 
denying indefinitely the nurses' right to collectively bargain 
with a duly elected representative.
    Genuine labor law reform would restore the balance Congress 
intended to achieve in passing the NLRA, not by legitimizing 
further encroachment on free choice, as H.R. 3246 does, but by 
restricting the ability of employers to defeat their employees 
who choose to exercise their guaranteed rights. In short, true 
reform would recognize that employers remain free to control 
their workplaces through non-discriminatory hiring and firing, 
and the promulgation of neutral rules of conduct, but would 
also ensure that employers do not ``under cover of th[at] right 
* * * intimidate or coerce * * * [their] employees.'' Jones & 
Laughlin, 301 U.S. at 45.

                    specific provisions of the bill

Title I--Truth in Employment

    Title I of H.R. 3246 would permit employers to discharge or 
refuse to hire any employee who sought or obtained employment 
in order to promote union organization. It would, for the first 
time since the enactment of the Wagner Act in 1935, permit 
employers to discharge and refuse to hire employees because 
they intended to engage in union organizing. It would thus 
seriously undermine a fundamental purpose of the National Labor 
Relations Act--to protect the right of employees to organize 
and bargain collectively.
    Title I is intended to end the practice of ``salting,'' 
whereby union members seek employment from nonunion employers 
to organize their employees. Salting is an organizingtactic 
that has been in use for many decades in many different industries. 
E.g. Baltimore Steamship Packet Co., 120 NLRB 1521, 1533 (1958); Elias 
Bros. Big Boy, Inc., 139 NLRB 1158, 1164-65 (1962); Sears Roebuck & 
Co., 170 NLRB 533, 533, 535 n.3 (1968). In recent years, its use in the 
construction industry has become widespread--not because the tactic is 
new--but to a large extent because recent legal developments have 
rendered other types of organizing in that industry less effective or 
more difficult.
    In the construction industry, organizing has always been a 
difficult undertaking. Because jobs are short-lived and work is 
intermittent, it is nearly impossible for unions to engage in 
that type of organizing common in other industries involving 
lengthy campaigns culminating in an NLRB representation 
election. Because of these difficulties, Congress enacted 
Section 8(f) of the NLRA in 1959, permitting unions to 
employers in the construction industry to enter into prehire 
collective bargaining agreements (agreements entered into 
before the union demonstrates majority support or even before 
any employees are hired). Recent developments, however, have 
made prehire agreements less valuable as a means of organizing 
nonunion employers. In John Deklewa & Sons, Inc., 282 NLRB 1375 
(1987), enf'd, 843 F.2d 770 (3d Cir. 1988), the Board held that 
an employer could terminate a prehire bargaining relationship 
when the prehire agreement expires, unless the union had either 
won an NLRB election or obtained voluntary recognition based on 
a showing of majority support. After Deklewa, it became 
apparent that the key to organizing in the construction 
industry was reaching the employees of nonunion contractors 
whose demonstrated support the union needed to establish 
permanent bargaining relationships.
    That task became far more difficult, however, after the 
Supreme Court decided Lechmere, Inc, v. NLRB, 502 U.S. 527 
(1992), holding that non-employee organizers had no right of 
access to an employer's property and that employers could 
invoke state trespass laws to exclude union organizers from 
their property. Thus Deklawa made access to non-union employees 
critical to union organizing and Lechmere denied that access to 
non-employees. In response to these developments unions in the 
construction industry have turned to ``salting''--using union 
members as volunteer organizers who seek employment with 
nonunion employers to organize their fellow employees during 
non-working time.
    Those who participate in salting programs apply for jobs 
with nonunion contractors to explain to unorganized employees 
the benefits of union organization and persuade them to support 
the union's efforts to obtain recognition and a collective 
bargaining agreement from their employer. The efforts to obtain 
recognition may include a representation election, a 
recognitional strike, an unfair labor practice strike (if the 
employer commits unfair labor practices), or other lawful 
tactics, all of which are traditional means of obtaining 
recognition that have heretofore been protected by the NLRA. 
Employees engaged in salting (salts) also file unfair labor 
practice charges, if the employer commits an unfair labor 
practice, file complaints with OSHA, if the employer violates 
applicable safety regulations, and notify the appropriate 
authorities of any other observed unlawful activities. 
Employers have never before been permitted to discharge 
employees because they had reported, or might report, unlawful 
conduct by the employer.
    Salts understand, when they apply for work, that they will 
be expected to fulfill the employer's legitimate expectations. 
Because union organizers do not want to give nonunion 
contractors an excuse to discharge them, and because they need 
to earn the respect of their coworkers,they are encouraged to 
be exemplary employees, to work efficiently and obey the employer's 
lawful work rules. The employer is free to promulgate work rules which 
all employees, including salts, must follow. Union activity can 
lawfully be prohibited in working areas during working times. Employees 
engaged in salting who do not comply with such rules or who are 
insubordinate or incompetent can be lawfully discharged on the same 
basis as other employees.
    Nevertheless, some employers who have been the object of 
salting campaigns have complained about what they contend is 
the unfairness of salting. Many of the employer witnesses who 
appeared before the committee to complain about salting had 
themselves committed a number of serious unfair labor 
practices. One employer witness, for example appeared on behalf 
of a company called Nordic Electric to complain about salting. 
Prior to his appearance, however, the NLRB had issued a 
complaint against Nordic and an Administrative Law Judge had 
found that Nordic had discharged and refused to hire employees 
because of their support for the union, unlawfully interrogated 
employees and even threatened employees with violence. Nordic 
Electric, Inc., NLRB Case No. 22-CA-20530. Another employer 
witness was a vice president of a company called Corey Delta, 
Inc. Prior to his appearance, the NLRB had issued a complaint 
against Corey Delta alleging that the company had committed 
numerous unfair labor practices. Among other things, it was 
alleged that Corey Delta had discharged 45 employees for 
engaging in union activities such as wearing union buttons, had 
unlawfully interrogated employees, told employees that the 
company's no-solicitation rule applied only to union 
activities, stated that the company intended to avoid hiring 
union members, and told employees that the company would 
``close its doors'' before it would ``go union.'' The witness 
himself was alleged to have promulgated an unlawful no-
solicitation rule. See also the employers' unlawful responses 
to salting in H.B. Zachry Co., 319 NLRB 967 (1995), enforced in 
pertinent part, 127 F.3d 1300 (11th Cir. 1997) and Tualatin 
Electric, Inc., 319 NLRB 1237 (1995).\1\
---------------------------------------------------------------------------
    \1\ In Tualatin, union organizers had been admonished by their 
union to ``work as hard for a nonunion contractor as they would for a 
union contractor, ``try to make a favorable impression,'' and in 
particular not to engage in ``sabotage . . . lying, stealing cheating, 
[or] obtaining information unlawfully.'' Nevertheless, the employer 
responded to the salting campaign by ``referring to [the union] as 
organized crime trying to put him out of business and attempted ``to 
eliminate wherever possible any personnel that were affiliated with the 
union.'' 319 NLRB at 1239.
---------------------------------------------------------------------------
    It is apparent that those employers who object to salting 
do not object to any inherent unfairness of the practice; 
rather, they object to the fact that the law permits their 
employees to organize and prohibits them from discharging those 
employees who would, or might promote union organizing among 
their employees. Accordingly, what is at stake is not whether 
employers should be allowed to run their own work places in 
accord with neutral rules designed to assure productivity and 
discipline. What is at sake is whether employers should be 
allowed to discriminate on the basis of suspected union 
membership and organizing activity. Congress settled that issue 
in 1935, and the law on that issue should not be changed now.
    Title I of H.R. 3246 would, unquestionably, destroy the 
right to organize in the construction industry. It would permit 
employers to refuse to hire any applicants who were suspected 
of being union supporters and discharge any employees who 
attempted to promote union organizing. Those applicants who 
were, or had been, union members could, and would, be 
``blacklisted'' by nonunion contractors. In short Title I would 
return construction industryemployees to their status prior to 
the enactment of the Wagner Act, when union membership frequently cost 
employees their jobs.
    The right of employees to engage in salting has been 
upheld, not only by the National Labor Relations Board, but 
also by the United States Supreme Court, which in NLRB v. Town 
& Country Electric, Inc., 116 S. Ct. 450 (1995), unanimously 
held that the NLRA protects those engaged in salting. In the 
decision, Justice Breyer, writing for the unanimous Supreme 
Court stated:

    Can a worker be a company's ``employee'' * * * if at the 
same time, a union pays that worker to help the union organize 
the company? We agree with the National Labor Relations Board 
that the answer is yes.
          * * * * *
    The employer has no legal right to require that, as part of 
his or her service to the company, a worker refrain from 
engaging in protected activity. 116 S. Ct. 450.

That principle, which has been a cornerstone of labor relations 
for several decades, would be undone by Title I.

Title II--Fair Hearing

            Title II's provision for a fair hearing creates confusion 
                    and delay in the representation process
    Under Section 9(c) of the Act, 29 U.S.C. 159(c) (as the 
Majority correctly notes in Section 201 of H.R. 3246), the NLRB 
must conduct a pre-election hearing in all cases in which its 
``investigation'' provides ``reasonable cause to believe'' a 
``question concerning representation exists'' and the parties 
have not stipulated to a consent election. However, tracing the 
development of the Board's expertise over the course of more 
than 30 years compels rejection of the Majority's confusing and 
uncertain test for the appropriateness of a single-location 
unit. First, the factors that this proposal requires the Board 
to consider when determining whether to allow an election in a 
single-location unit do not in any way measure the 
appropriateness of such a unit. Second, and in every way 
related to the preceding objection, these factors serve no 
other purpose than to cause delay and confusion in the Board's 
election procedures, thus providing employers with yet another 
weapon in their arsenal to defeat an organizing campaign.
    As the Supreme Court stated in American Hospital Ass'n v. 
NLRB, 499 U.S. 606, 610 (1991), ``[t]he central purpose of the 
[National Labor Relations] Act [is] to protect and facilitate 
employees' opportunity to organize unions to represent them in 
collective-bargaining negotiations.'' Thus, ``the initiative in 
selecting an appropriate unit resides with the employees * * * 
[who] may seek to organize `a unit' that is `appropriate'--not 
necessarily the single most appropriate unit.'' Ibid. (Emphasis 
in original). It follows that the Board's task in determining 
whether the employees' requested unit is appropriate is ``to 
insure to employees the full benefit of their right to self-
organization and to collective bargaining.'' Id. at 611.
    Given these principles, where employees take the 
``initiative in selecting an appropriate unit'' by requesting a 
representation election for the employee group working together 
at a discrete location, the Board has ``consistently found that 
a single-location unit in a multi-location enterprise is a 
presumptively appropriate unit for bargaining.'' Haag Drug 
Company, 169 NLRB 877, 878 (1968) (emphasis added). And while 
the Majority seeks to characterize this presumption as an 
``imprecis[e] blanket rule * * * [that] detracts from the * * * 
Act's goal ofpromoting stability in labor relations,'' Section 
201(3), nothing could be further from the truth. As the Supreme Court 
has recognized in AHA, ``rules that define in advance the portions of 
the work force in which organizing efforts may properly be conducted'' 
facilitate ``the Act's underlying policy, the goal of facilitating 
organization and recognition of unions.'' 499 U.S. at 613.
    To test the applicability of this presumption in any given 
case, the Board has, time and time again, relied on three 
factors: geographic distance from facilities of the same 
employer; degree of temporary employee interchange; and local 
autonomy, as measured by the on-site presence of a statutory 
supervisor for a regular and substantial period. See 60 Fed. 
Reg. 50152. Thus, where the location in question is more than a 
mile away from another of the employer's facilities, there is 
no appreciable degree of employee interchange, and a supervisor 
within the meaning of the Act is present at the facility, it is 
reasonable to presume that the single-location demarcates ``a 
natural or geographically based subdivision of an employer's 
employees,'' NLRB v. Living and Learning Centers, Inc., 652 
F.2d 209, 213 (1st Cir. 1981), and the employees who work there 
``form a homogeneous, identifiable, and distinct group.'' Haag 
Drug, 169 NLRB at 877.
    The multi-factor test mandated by Title II, inasmuch as it 
incorporates a host of additional factors, including the catch-
all ``such other factors as the Board considers appropriate,'' 
is fundamentally at odds with the presumption in favor of 
single-location units. Indeed, it is nothing more than a 
conglomeration of an indeterminate number of factors designed 
to allow employers to slow down the process of holding a 
representation election. For example, ``permanent employee 
interchange'' creates no relevant ties between the employees 
who remain behind and those at the transferred employees' new 
work site, and so has no place in a rule designed to test the 
appropriateness of a single-location unit. Similarly, 
``centralized control'' over labor relations has no logical 
place in the applicable test. In contrast to the factor of 
``local supervision,'' the structure of the employer's labor 
relations has ``little or no direct relation to the employees' 
day-to-day work and employee interests in the conditions of 
their employment.'' Haag Drug, 169 NLRB at 878. Nor does 
inclusion of ``common skills, functions and working 
conditions'' do anything more than invite confusion, without 
advancing the Board's inquiry in a particular case. This factor 
addresses itself primarily to the production processes of the 
employer, which are largely irrelevant unless they affect the 
day-to-day interests of the employees; and if they do so, this 
will likely result in the geographic proximity of one facility 
to another, or in a high degree of temporary employee 
interchange. These factors are already included in a clear and 
meaningful test of single-location appropriateness. Moreover, 
the fact that employees at two or more locations have common 
skills, functions, or working conditions says little about 
whether they have sufficiently cohesive day-to-day interests 
that they should be allowed to vote for union representation on 
that basis.
    At best, the multi-factor test set forth in H.R. 3246 sows 
legal confusion, defies consistent and principled application, 
generates needless litigation, and undermines the regulated 
parties' ability to conduct their affairs rationally and in 
accord with the law. It does, however, provide employers who 
are determined to resist the collective efforts of their 
workers with yet another weapon: the ability to cause delay and 
generate unnecessary complexity through the administrative 
process. An amendment that permits such tactics represents one 
more assault on the NLRA's fundamental guarantee of the right 
of organization, and has no place in the statute.

Title III--Justice on Time

    Chairman Goodling has claimed that Title III, ``Justice on 
Time,'' as well as the other three provisions of H.R. 3246 ``is 
a narrowly drafted response to a specfic problem at [the 
NLRB]'' and would ``inject a greater measure of fairness into 
the relationship between [the NLRB] and small employers, small 
unions, and employees who may have been wronged for their union 
activities.'' The unfortunate reality is that ``Justice on 
Time,'' as written, does little or nothing to speed up the pace 
of agency and judicial decision-making in illegal discharge 
cases, ignores the root causes of case-processing delays at the 
agency, and--as part of the Majority's ``wish list'' of 
amendments to the National Labor Relations Act--makes a mockery 
of the term ``fairness.''
    The stated premise of Title III is a laudatory one: namely, 
that in recent years most illegally discharged employees are 
forced to wait ``months and even years'' to obtain 
reinstatement to their jobs and back pay ``due to the lengthy 
delays in the processing of unfair labor practice charges,'' 
which causes a ``chilling effect on the exercise of rights 
provided under Section 7'' of the National Labor Relations Act 
and weakens ``the effectiveness of the remedies for unlawful 
discrimination.'' Section 301. It is widely recognized that the 
illegal discharge of known union supporters during an 
organizing campaign is one of the most successful tactics 
utilized by employers to defeat their employees' efforts to 
form a union in the workplace; indeed, studies have shown that 
one out of every four employers combat organizational efforts 
by resorting to such illegal discharges. Each year, about 
10,000 workers are illegally discharged for attempting to 
exercise their fundamental rights to form and join unions.
    But the majority's bill falls woefully short of achieving 
``Justice on Time'' for illegally discharged workers. A 
fundamental problem with the bill is that it only addresses 
delays in unfair labor practice case-processing at the NLRB, 
while it wholly ignores the problem that NLRB orders are not 
self-enforcing. When faced with a respondent who refuses to 
comply with an NLRB order directing the respondent to cease and 
desist from committing unfair labor practices and take 
appropriate affirmative action, the agency must obtain 
enforcement of its order from the appropriate federal court of 
appeals pursuant to Section 10(e) of the National Labor 
Relations Act, 20 U.S.C. Sec. 160(e). Thus, under the current 
statutory regime, even where the NLRB finds a violation of 
Section 8(a)(3) or Section 8(b)(2) of the Act and orders a 
remedy, the respondent may flout the NLRB's order with impunity 
until the court of appeals enforces the order one or two years 
later. Because the bill does not amend the National Labor 
Relations Act to make NLRB orders in cases involving illegal 
discharges self-enforcing, its ``Justice on Time'' label is a 
meaningless, inapt euphemism that will neither aid nor fool 
American workers.
    Even at the administrative level, the bill imposes 
significant new burdens on the NLRB that will only hinder the 
agency's ability to decide illegal discharge cases more 
quickly. Not only does the bill require the NLRB to decide all 
but the most extremely complex illegal discharge cases within 
one year after the filing of the unfair labor practice charge, 
but it imposes onerous new reporting requirements on the NLRB 
for those case which take more than one year to decide. The 
Majority does not explain how the NLRB can reasonably be 
expected to meet these requirements given the fact that the 
Majority has consistently fought, with a large measure of 
success, to reduce the NLRB's staff and funding in recent 
years. In fact, the NLRB has lacked full funding since 1962, 
while the agency's caseload has increased 60% during that 
period; onthe other hand, agency staff has decreased by more 
than one-third since Ronald Reagan was elected president. Obviously, 
the NLRB cannot continue to do more with less indefinitely, yet that is 
what this Majority proposal would require.
    Even if NLRB orders were self-enforcing, another serious 
flaw with the bill is that it would still allow illegally 
discharged workers to remain unemployed for up to one year. 
This is simply unacceptable, both because of the dire 
consequences suffered by many such unemployed workers and the 
chilling effect that illegal discharges have on co-workers who 
are deterred from exercising their own Section 7 rights. As the 
Dunlop Commission unanimously recognized, speedy interim relief 
pending the outcome of the unfair labor practice proceeding is 
essential in such cases:

          Prompt injunctive relief will remove the coercive 
        effect on employee free choice. The increased efficacy 
        of this remedy will deter discriminatory behavior as 
        well as rectify it, and will increase respect for the 
        NLRB among the general public and its primary 
        constituency--American workers.

    During consideration of H.R. 3246, Congressman Kildee 
offered an amendment to address this issue. By amending Section 
10(m) of the National Labor Relations Act to authorize the 
General Counsel, upon issuance of a complaint alleging an 
illegal discharge, to ``make expedited application to the Board 
for'' the employee's ``immediate reinstatement,'' and the NLRB 
to ``immediate[ly] reinstate[ ] * * * the employee, pending a 
final order disposing of the complaint,'' Congressman's 
Kildee's amendment would provide workers with the swift justice 
that has been so conspicuously absent under current procedures. 
Moreover, the requirement that the respondent employer or labor 
organization reinstate the victimized employee with treble back 
pay within 15 days after the NLRB issues its order would 
provide an effective deterrent to unlawful behavior. It likely 
would substantially reduce the number of American workers who 
are illegally fired each year for asserting their Section 7 
rights from the current scandalously high number to a more 
acceptable level. And it would accomplish these desirable 
results without imposing an undue additional burden on the 
NLRB's increasingly scarce resources.

Title IV--Attorneys' Fees

    Title IV requires that the NLRB pay the fees and expenses 
of small businesses (and unions) that prevail ``in an adversary 
adjudication conducted by the Board,'' or ``in a[n]y civil 
action, including proceedings for judicial review of agency 
action by the Board, brought by or against the Board.'' This 
provision would apply to employers or labor organizations with 
not more than 100 employees and a net worth of not more than 
$1.4 million.
    As discussed above, Title IV, despite its stated intent to 
apply to ``small businesses and labor organizations,'' achieves 
far broader coverage with its enlarged net worth and employee 
requirements. Moreover, there is not a scintilla of evidence to 
justify this radical departure from the American Rule, under 
which each party to litigation bears its own costs.
    First, the Majority has come forward with nothing to 
demonstrate that the NLRB's prosecutorial discretion should be 
changed in this manner. Indeed, the statistics demonstrate 
otherwise. In Fiscal year '96, the overwhelming majority of 
unfair labor practice cases filed with the NLRB in the agency's 
field offices were disposed of within a median of 77 days 
without the necessity of formal litigation: 30.4 percent 
through dismissal before complaint, 30.1 percent through 
withdrawals before complaint, and 35.3 percent through 
settlements and adjustments. NLRB's FY '96 Report at 7. 
Moreover, in FY '96, 147 cases involving the NLRB were 
decidedby the courts of appeals. Of these cases, the Board won 83.7 
percent in whole or in part (compared to 72.5 percent in the preceding 
fiscal year) the courts remanded 4.1 percent were remanded entirely 
(compared to 7.5 percent in FY '95); and the Board lost 12.2 percent of 
cases in their entirety (compared to 20.0 percent in FY' 95). Id. At 
17. This impressive record as a whole demonstrates the Board's careful 
selection of meritorious charges in which to proceed with issuance of a 
complaint, and the skill with which it prosecutes them. In addition, it 
refutes any notion that the Board has abused its statutory authority to 
enforce the Act through administrative and judicial proceedings.
    Moreover, while the Board resolves the vast majority of 
cases either before issuance of a complaint or initiation of 
formal proceedings, there is no evidence to suggest that 
parties are unduly pressured into foregoing action on their 
charges. Settlements are often achieved by the employer's 
posting of a notice at the workplace. Indeed, of the 11,245 
cases closed in Fiscal Year 1996, this remedial action was 
invoked in 3105 of them. FY '96 Report at 108.
    Not only is there a total lack of evidence as to Board 
abuses that would warrant this unprecedented shifting of fees 
in NLRA litigation, but there is already a remedy for parties 
that prevail in litigation involving the Board, namely the 
Equal Access to Justice Act. 5 U.S.C. at 504. But not even EAJA 
goes as far as to penalize a government agency every time it 
loses. Under EAJA, the government must pay the prevailing 
party's fees and costs only in those situations in which the 
government's position was not ``substantially justified,'' or 
where ``special circumstances'' would make fee-shifting unjust. 
Id. at 504(a)(1). Thus, Congress has never seen fit simply to 
shift the financial burdens of litigation to the government 
when it does not prevail, without regard to the merits of the 
government's position. Nor can it conjure up any 
reasonwhatsoever to single out proceedings involving the NLRB for 
imposition of such a rule.
    The only conceivable rationale for passage of Title IV is 
the blatant attempt to chill the Board's exercise of its 
statutory responsibility to enforce the NLRA, by taxing it for 
every instance in which it attempts to do so unsuccessfully. 
Indeed, the Majority's proposal differs in name only from an 
outright assault on the Board's budget.

                               amendments

    In an effort to highlight the flaws in H.R. 3246, Democrats 
offered several amendments during committee consideration of 
the bill: an amendment by Representative Payne to strike title 
I; an amendment by Representative Clay to strike title II; an 
amendment by Representative Kildee to title III to provide 
reinstatement and increased penalties for illegally firing an 
employee for exercising protected rights; an amendment by 
Representative Scott to strike Title IV, and an amendment by 
Representative Andrews to penalize employers who refuse to 
bargain in good faith for a first contract after a union wins a 
representational election.

                               conclusion

    Despite its euphemistic name, H.R. 3246, the so called 
``Fairness for Small business and Employees Act,'' is not 
limited to small businesses and it certainly is not fair to 
employees. For the reasons outlined above, the Committee should 
not have reported H.R. 3246 and instead should direct its 
attention to real flaws in the NLRA, like its failure to 
provide meaningful penalties when employers illegally fire 
workers who try to organize unions, or when employers refuse to 
bargain in good faith for first contracts when unions win 
organizational elections.

                                   William L. Clay,
                                   Dale E. Kildee,
                                   Major R. Owens,
                                   Patsy T. Mink,
                                   Tim Roemer,
                                   Lynn Woolsey,
                                   Chaka Fattah,
                                   Carolyn McCarthy,
                                   Ron Kind,
                                   Harold Ford, Jr.,
                                   George Miller,
                                   Matthew G. Martinez,
                                   Donald M. Payne,
                                   Robert E. Andrews,
                                   Bobby Scott,
                                   Carlos Romero-Barcelo,
                                   Ruben Hinojosa,
                                   John F. Tierney,
                                   Loretta Sanchez,
                                   Dennis J. Kucinich.

                                
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