[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
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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\
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\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'').
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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\
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\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).
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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.
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\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.
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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.
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\8\ 116 S.Ct. 450 (1995).
\9\ Id. at 457.
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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\
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\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.
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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.
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\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.
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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\
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\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).
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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\
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\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.
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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.
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\16\ J & L Plate, 310 NLRB 429 (1993).
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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.