[House Report 106-385]
[From the U.S. Government Publishing Office]



106th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    106-385

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



 
             FAIR ACCESS TO INDEMNITY AND REIMBURSEMENT ACT

                                _______
                                

October 14, 1999.--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. 1987]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Education and the Workforce, to whom was 
referred the bill (H.R. 1987) to allow the recovery of 
attorneys' fees and costs by certain employers and labor 
organizations who are prevailing parties in proceedings brought 
against them by the National Labor Relations Board or by the 
Occupational Safety and Health Administration, having 
considered the same, report favorably thereon with an amendment 
and recommend that the bill as amended do pass.
  The amendment is as follows:
  Strike out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Fair Access to Indemnity and 
Reimbursement Act''.

SEC. 2. FINDINGS AND PURPOSE.

  (a) Findings.--The Congress makes the following findings:
          (1) Certain small businesses and labor organizations are at a 
        great disadvantage in terms of expertise and resources when 
        facing actions brought by the National Labor Relations Board or 
        by the Occupational Safety and Health Administration.
          (2) The attempt to ``level the playing field'' for small 
        businesses and labor organizations by means of the Equal Access 
        to Justice Act has proven ineffective and has been 
        underutilized by these small entities in their actions before 
        the National Labor Relations Board and before the Occupational 
        Safety and Health Review Commission.
          (3) The greater expertise and resources of the National Labor 
        Relations Board and the Occupational Safety and Health 
        Administration as compared with those of small businesses and 
        labor organizations necessitate a standard that awards fees and 
        costs to certain small entities when they prevail against the 
        National Labor Relations Board or against the Occupational 
        Safety and Health Administration.
  (b) Purpose.--It is the purpose of this Act--
          (1) to ensure that certain small businesses and labor 
        organizations will not be deterred from seeking review of, or 
        defending against, actions brought against them by the National 
        Labor Relations Board or by the Occupational Safety and Health 
        Administration because of the expense involved in securing 
        vindication of their rights;
          (2) to reduce the disparity in resources and expertise 
        between certain small businesses and labor organizations and 
        the National Labor Relations Board and the Occupational Safety 
        and Health Administration; and
          (3) to make the National Labor Relations Board and the 
        Occupational Safety and Health Administration more accountable 
        for their enforcement actions against certain small businesses 
        and labor organizations by awarding fees and costs to these 
        entities when they prevail against the National Labor Relations 
        Board or in proceedings before the Occupational Safety and 
        Health Review Commission.

SEC. 3. AMENDMENT TO NATIONAL LABOR RELATIONS ACT.

  The National Labor Relations Act (29 U.S.C. 151 and following) is 
amended by adding at the end the following new section:
                 ``awards of attorneys' fees and costs
  ``Sec. 20. (a) Administrative Proceedings.--An employer who, or 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 $7,000,000 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 $7,000,000 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.''.

SEC. 4. APPLICABILITY OF NLRA AMENDMENT.

  (a) Agency Proceedings.--Subsection (a) of section 20 of the National 
Labor Relations Act, as added by section 3 of this Act, applies to 
agency proceedings commenced on or after the date of the enactment of 
this Act.
  (b) Court Proceedings.--Subsection (b) of section 20 of the National 
Labor Relations Act, as added by section 3 of this Act, applies to 
civil actions commenced on or after the date of the enactment of this 
Act.

SEC. 5. AMENDMENT TO OCCUPATIONAL SAFETY AND HEALTH ACT.

  The Occupational Safety and Health Act (29 U.S.C. 651 and following) 
is amended by inserting after section 12 at the end the following new 
section:
                 ``awards of attorneys' fees and costs
  ``Sec. 12A. (a) Administrative Proceedings.--An employer who--
          ``(1) is the prevailing party in an adversary adjudication 
        before the Occupational Safety and Health Review Commission 
        under this or any other Act, and
          ``(2) had not more than 100 employees and a net worth of not 
        more than $7,000,000 at the time the adversary adjudication was 
        initiated,
shall be awarded from the Secretary of Labor 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 Secretary of Labor 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--
          ``(1) is the prevailing party in a civil action, including 
        proceedings for judicial review of an action by the 
        Occupational Safety and Health Review Commission, brought by or 
        against the Secretary or the Commission, and
          ``(2) had not more than 100 employees and a net worth of not 
        more than $7,000,000 at the time the civil action was filed,
shall be awarded from the Secretary of Labor 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.''.

SEC. 6. APPLICABILITY OF OSHA AMENDMENT.

  (a) Agency Proceedings.--Subsection (a) of section 12A of the 
Occupational Safety and Health Act, as added by section 5 of this Act, 
applies to agency proceedings commenced on or after the date of the 
enactment of this Act.
  (b) Court Proceedings.--Subsection (b) of section 12A of the 
Occupational Safety and Health Act, as added by section 5 of this Act, 
applies to civil actions commenced on or after the date of the 
enactment of this Act.

                                Purpose

    The purpose of H.R. 1987, the Fair Access to Indemnity and 
Reimbursement (FAIR) Act, is to assist small businesses and 
labor organizations in defending themselves against government 
bureaucracy. By providing for the reimbursement of attorney's 
fees and expenses to certain prevailing small employers, the 
legislation is intended to help prevent spurious lawsuits and 
ensure that employers of modest means have an incentive to 
adequately represent themselves against the National Labor 
Relations Board (NLRB) and the Occupational Safety and Health 
Administration (OSHA).

                            Committee Action

    H.R. 1987, the FAIR Act, was introduced by Representative 
Bill Goodling on May 27, 1999. H.R. 1987 was marked up in Full 
Committee on July 29, 1999, and ordered favorably reported, as 
amended, by roll call vote (yeas 24, nays 19, not voting 6).
    The FAIR Act is an expanded version of Title IV of last 
Congress' H.R. 3246, the Fairness for Small Business and 
Employees Act of 1998, introduced by Representative Bill 
Goodling on February 24, 1998. H.R. 3246 was marked-up in the 
Employer-Employee Relations Subcommittee on February 26, 1998, 
marked up in Full Committee on March 11, 1998, and ordered 
reported favorably by roll call vote. H.R. 3246 passed the 
House last Congress on March 26, 1998 by a 202 to 200 vote. 
While Title IV of H.R. 3246 provided for reimbursement of fees 
for parties prevailing against the NLRB, H.R. 1987 applies to 
parties prevailing in proceedings before both the Board and the 
OSHA.
    H.R. 1987 currently has 28 cosponsors. The bill was 
addressed by the Employer-Employee Relations Subcommittee 
during a field hearing on May 10, 1999 in Indianapolis, 
Indiana, held jointly with the Senate Labor Committee's 
Subcommittee on Employment, Safety and Training. Testimony was 
heard from witnesses Mr. Harry C. Alford, president/CEO, 
National Black Chamber of Commerce, Inc., Washington, DC; Mr. 
Carl Shaffer, Indiana state organizer, International 
Brotherhood of Electrical Workers, Walkerton, Indiana; Mr. 
Charlie Farrell, president, C.R. Electric Company, 
Indianapolis, Indiana; Mr. Neil Gath, attorney, Fillenwarth, 
Dennerline, Groth & Towe, Indianapolis, Indiana; Mr. Randy 
Truckenbrodt, president, Randall Industries, Inc., Elmhurst, 
Illinois; and Mr. Larry Gordon, owner, G & N Fabrications, 
Franklin, Indiana.
    The Committee also addressed the concept of reimbursement 
for prevailing parties last Congress at the Employer-Employee 
Relations Subcommittee's February 5, 1998, hearing. Testimony 
was received from 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. The 
issue was also brought into the discussions of labor policies 
during 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. 1987 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 
legislation also recognizes that federal agencies are applying 
the law in ways that not only harm small employers--businesses 
and unions--but also does a great disservice to hardworking men 
and women who work for those employers.
    The FAIR Act would help prevent the NLRB and the OSHA from 
strong-arming small businesses. The bill would ensure that 
small businesses have the incentive to adequately represent 
themselves against both agencies by leveling the playing field. 
The legislation amends the National Labor Relations Act (NLRA) 
and the Occupational Safety and Health Act (OSH Act) to provide 
that a small employer that prevails in an action against the 
NLRB or the OSHA will automatically be allowed to recoup the 
attorney's fees and expenses it paid defending against the 
meritless claim.
    The bill would apply to an employer (including a labor 
organization) who has not more than 100 employees and a net 
worth of not more than $7,000,000. As explained below, the 
employee-eligibility limit represents a mere 20 percent of the 
current 500 employee/$7 million net worth eligibility limits 
for employers under the Equal Access to Justice Act (EAJA), a 
bill passed with strong bipartisan support in 1980 to provide 
small businesses with an effective means to fight against 
abusive and unwarranted intrusions by federal agencies. The 
EAJA--the vehicle by which employers prevailing against the 
Board or the OSHA must currently try to recover attorney's fees 
and costs--has proven ineffective and is not often utilized 
against either agency.
    The rationale for the FAIR Act is that government agencies 
the size of the NLRB and the OSHA--well-staffed, with numerous 
lawyers--should more carefully evaluate the merits of a case 
before bringing it against a small business, which is ill-
equipped to defend itself against an opponent with such 
superior expertise and resources. Furthermore, small businesses 
have been victimized by relatively frivolous lawsuits by these 
agencies, but have been unable to fight cases to their 
conclusions based on the merits due to lack of resources, and 
have had to settle the case. H.R. 1987 would provide some 
protection for an employer who feels strongly that its case 
merits full consideration. If the Board or the OSHA brings a 
losing case against a ``little guy,'' they should pay the 
attorney's fees and expenses the company had to spend to defend 
itself.

                            Committee Views

    Small businesses and labor organizations facing an action 
brought against them by the National Labor Relations Board or 
the Occupational Safety and Health Administration are at a huge 
disadvantage. Both agencies have armies 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 
or the OSHA because it is the only viable option.
    In fiscal year 1998, for example, the Board received and 
investigated more than 30,000 unfair labor practice charges, 
with 3,421 charges resulting in a complaint being issued by the 
Board's general counsel. Of these complaints, 2,814 were 
settled at some point post-complaint.\1\ At the OSHA, of nearly 
77,000 total violations cited in fiscal year 1998, some 2,061 
inspections resulting in citations were contested--1,081 
contested cases involving employers with 100 or fewer 
employees. As OSHA Assistant Secretary Charles Jeffress pointed 
out, most cases are settled or withdrawn before the 
Occupational Safety and Health Review Commission (OSHRC) issues 
a final decision.\2\
---------------------------------------------------------------------------
    \1\ Figures provided by the NLRB to the Committee in chart form--a 
summary of figures available in the NLRB's annual reports.
    \2\ OSHA statistics provided in April 16, 1999 letter from Jeffress 
to Sen. Michael B. Enzi, chairman, Subcommittee on Employment, Safety 
and Training of the Senate Committee on Health, Education, Labor and 
Pensions; See also 61 Am. Jur. 2d Plant and Job Safety s 95, fn. 44 
(1981) (citing OSHA study showing about 60 percent of contested 
citations settled before reaching the OSHRC or the courts).
    The OSHRC is an independent agency created by the Occupational 
Safety and Health Act of 1970, 29 U.S.C. Section 651 et seq. The sole 
function of the Commission is to carry out adjudicative functions under 
the OSH Act. The Commission is composed of three members, each of whom 
is appointed by the president by and with the advice and consent of the 
Senate. Cases coming before the Commission are first heard by an 
administrative law judge. The decision of the ALJ can be reviewed by 
the full Commission at the discretion of any single member. A decision 
of the full Commission may be appealed to an appropriate United States 
Court of Appeals either by the Secretary of Labor or by any person 
adversely affected or aggrieved.
---------------------------------------------------------------------------
    As labor attorney Jay P. Krupin aptly summarized the 
situation at the NLRB when testifying before the subcommittee: 
\3\

    \3\ Hearing on Legislation to Provide Fairness for Small Businesses 
and Employees, before the Employer-Employee Relations Subcommittee of 
the House Education and the Workforce Committee, 105th Cong., 2nd 
Sess., pp. 65-66. (February 5, 1998) (Serial No. 105-72) (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 [the attorney's fee legislation].

    In addition to unfair labor practices at the NLRB, other 
administrative actions, such as those at the OSHA, require an 
employer response. As pointed out by labor counsel Vincent T. 
Norwillo: \4\

    \4\ May 10, 1999, written testimony of Vincent T. Norwillo, labor 
counsel, Tradesmen International, Inc., before a joint field hearing of 
the House Subcommittee on Employer-Employee Relations and the Senate 
Subcommittee on Employment, Safety and Training, Indianapolis, Indiana, 
106th Cong., 1st Sess., p. 5.

          These responses mandate the reallocation of time, 
        money and other productive resources from marketing, 
        advertising, sales, market research, employee training 
        and other legitimate business pursuits. Invariably, 
        employer attorney's fees comprise the largest component 
        of this defense cost. These daunting figures compel 
        employers to settle contested charges on unfavorable 
        terms regardless of culpability. In addition, these 
        financial pressures impose an independent pecuniary 
        penalty on employers who resist the temptation to 
        settle and prevail on the charges, thus chilling the 
        resolve of employers to defend against a repeat barrage 
---------------------------------------------------------------------------
        in the future.

    Under current law, small businesses and unions who have 
prevailed against the NLRB or the OSHA may use the Equal Access 
to Justice Act (EAJA) to attempt to recover the attorney's fees 
and expenses they have incurred in defending the action they 
have won.\5\ 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 
or the OSHA and has proven ineffective.
---------------------------------------------------------------------------
    \5\ 5 U.S.C. Sec. 504 et seq.; 28 U.S.C. Sec. 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 \6\ will not get its 
fees if the losing agency can show its position was 
``substantially justified.'' Agencies have 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.'' \7\ 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,'' \8\ current law follows the 1988 Supreme 
Court ruling that the burden is in fact the lower ``reasonable 
basis'' standard.
---------------------------------------------------------------------------
    \6\ Under current law, 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 102.143(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'').
    With respect to the OSHA, the EAJA applies to adversary 
adjudication before the Occupational Safety and Health Review 
Commission (OSHRC). 29 CFR Section 2204.103. Under the OSHRC's EAJA 
regulations, adversary adjudication includes contests of citations, 
notifications, penalties, or abatement periods by an employer; contests 
of abatement periods by an affected employee or authorized employee 
representative; and petitions for modifications of the abatement 
periods by an employer. 29 CFR Section 2204.104. As with NLRB 
proceedings, a prevailing applicant before the OSHRC may receive an 
award for fees and expenses in connection with a proceeding, or in ``a 
discrete substantive portion of the proceedings.'' 29 CFR Section 
2204.106(a).
    \7\ 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.
    \8\ H. Rept. 99-120, 99th Cong., 1st Sess. 9-10 (1985), reprinted 
in 1985 U.S.C.C.A.N. 132, 138.
---------------------------------------------------------------------------
    Given the low burden before the NLRB and the OSHA, and 
since an EAJA claim itself can be as costly as the underlying 
action, not many EAJA applications are being filed with either 
agency. A GAO report prepared for the Committee and released in 
February 1998 \9\ 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.\10\ As Table 1 and Table 2 below show, the number 
of EAJA applications for both Board and Circuit Court of 
Appeals decisions, and applications granted, has fallen 
significantly:\11\
---------------------------------------------------------------------------
    \9\ ``Equal Access to Justice Act: Its Use in Selected Agencies,'' 
B-278335, GAO/HEHS-98-58R (January 14, 1998).
    \10\ Id., at pp. 19-20.
    \11\ Ibid.

  TABLE 1.--BOARD DECISIONS ON EAJA APPLICATIONS AT NLRB, FISCAL YEARS
                                 1982-98
------------------------------------------------------------------------
                                              Number of       Amount of
                                            applications       fees and
              Fiscal year               --------------------   expenses
                                          Decided   Granted    awarded
------------------------------------------------------------------------
1982...................................        17         0            0
1983...................................        37         0    a $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     a 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
1998...................................         2         0            0
                                        --------------------------------
      Total............................       236        32     730,036
------------------------------------------------------------------------
a Although NLRB records show these as fees and expenses awarded, NLRB
  officials 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 2.--CIRCUIT COURT OF APPEALS DECISIONS OF NLRB EAJA APPLICATIONS,
                          FISCAL YEARS 1982-98
------------------------------------------------------------------------
                                              Number of       Amount of
                                            applications       fees and
              Fiscal year               --------------------   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
1998...................................         7         6      167,385
                                        --------------------------------
      Total............................       118        30      864,168
------------------------------------------------------------------------

    Having decided 146 EAJA applications--and granting 11--
during fiscal years 1982 to 1986, the Board decided only 25--
granting 8--during fiscal years 1993 to 1998.\12\ 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 53 decisions, 
while from fiscal years 1993 to 1998, there were 14 awards 
granted out of only 29 decisions.\13\
---------------------------------------------------------------------------
    \12\ Id., at p. 19. Statistics for EAJA applications and awards for 
fiscal year 1998 were provided to the Committee on July 29, 1999.
    \13\ Id., at p. 20, supplemented by the NLRB statistics provided 
July 29, 1999.
---------------------------------------------------------------------------
    As Table 3 shows, in the 19 fiscal years 1981 to 1999, the 
OSHRC received only 82 EAJA applications. Out of 75 total 
decisions, a mere 30 awards have been made in these 19 years--
approximately 1.5 awards a year--for a total of slightly more 
than $200,000 with the average award being $10,729.\14\
---------------------------------------------------------------------------
    \14\ With respect to OSHA cases granted EAJA awards through the 
courts, the Government Accounting Office provided information to the 
Committee on March 19, 1999, indicating that from years 1982 to 1997, 
only two applicants received awards--one award for $7,194 in fiscal 
year 1984 and another for $15,065 in fiscal year 1986.

       TABLE 3.--EAJA APPLICATIONS AT OSHRC, FISCAL YEARS 1981-99
------------------------------------------------------------------------
                                 Number of applications a     Amount of
                              ------------------------------   fees and
         Fiscal year                                           expenses
                                 File     Decided   Granted    awarded
------------------------------------------------------------------------
1981.........................         0         0         0            0
1982.........................         2         2         0            0
1983.........................         4         4         0            0
1984.........................         2         2         1       $2,969
1985.........................         6         6         0            0
1986.........................         4         4         1        8,392
1987.........................         6         6         3       14,533
1988.........................         4         4         3       18,831
1989.........................         5         5         3        5,461
1990.........................         4         4         2       12,423
1991.........................         8         8         5       40,678
1992.........................         1         1         1       10,281
1993.........................         2         2         1       14,158
1994.........................         5         5         0            0
1995.........................         5         5         3        5,583
1996.........................         2         2         0            0
1997.........................         6         6         2       28,876
1998.........................         4         4         2        5,000
1999.........................        12       b 5         3       36,671
                              ------------------------------------------
      Total..................        82        75        30      203,856
------------------------------------------------------------------------
a Information provided to the Committee by the Office of the General
  Counsel, OSHRC, on June 17, 1999. The Commission indicated that it is
  computerized case tracking system only goes back two to three years.
  Lexis searches were used to supplement that information. Furthermore,
  the General Counsel noted there probably exist EAJA cases that were
  disposed of by administrative law judges' orders that were never
  included in the Lexis database, and that, therefore, the numbers were
  probably low, but that there are probably not ``many'' more.
b Seven EAJA Applications pending, as of June 17, 1999.

    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 
against the NLRB or the OSHA, and believe it is easier--and far 
less expensive--to give up the fight. While these agencies 
understandably would argue that the lack of successful EAJA 
claims is due to them carefully moving forward only when they 
are ``substantially justified'' in bringing their actions, 
small employers and unions prevailing against either agency, 
however, recognize the long odds of winning, and high expense 
of undertaking, additional litigation to attempt to secure an 
award under the EAJA.\15\
---------------------------------------------------------------------------
    \15\  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).'' \16\ As indicated in Table 3, the 
OSHRC receives, on average, only 4 EAJA applications a year.
---------------------------------------------------------------------------
    \16\ Hearing on Legislation to Provide Fairness for Small 
Businesses and Employees, before the Employer-Employee Relations 
Subcommittee of the House Education and the Workforce Committee, 
written testimony of Peter C. Rousos, on behalf of the U.S. Chamber of 
Commerce, 105th Cong., 2nd Sess., p. 105 (February 5, 1998) (Serial No. 
105-72).
---------------------------------------------------------------------------
    The EAJA has proven particularly ineffective in providing 
the intended protection to small entities facing unjustified 
government action under the NLRA and the OSH Act. Since it is 
clear the EAJA is underutilized at best, and at worst simply 
not working, H.R. 1987 imposes a flat rule: If you are a small 
employer or small labor organization, and you prevail against 
either agency, then you will get your attorney's fees and 
expenses from the agency.\17\ The FAIR Act 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.'' \18\
---------------------------------------------------------------------------
    \17\ For qualifying prevailing employers, i.e., up to 100 employees 
and a net worth of not more than $7 million, it is the Committee's 
intent that the award shall be paid by the NLRB or the OSHA out of 
their 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. The Committee-passed 
version of H.R. 1987--Chairman Goodling's Amendment in the Nature of a 
Substitute to H.R. 1987--was offered specifically to make clear with 
respect to OSHA cases that fees and expenses are to be awarded ``from 
the Secretary of Labor'' and not from the OSHRC. See Sec. 5, Amendment 
in the Nature of a Substitute to H.R. 1987. See also, In Re Perry, 882 
F.2d 534, 545 (1st Cir. 1989) (Court found ``no clear indication of 
congressional intent to extend EAJA liability to purely adjudicative 
entities * * * OSHRC is such a creature: a purely adjudicative 
board'').
    \18\ 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); See also, May 
10, 1999 written testimony of Randall R. Truckenbrodt, president, 
Randall Industries, before joint field hearing of the House 
Subcommittee on Employer-Employee Relations and the Senate Subcommittee 
on Employment, Safety and Training, Indianapolis, Indiana, 106th Cong., 
1st Sess., p. 4 ($80,000 spent by employer on attorney's fees to 
prevail on 35 of 36 unfair labor practice charges. ``That amount could 
have been triple had [Truckenbrodt] not represented [himself] through 
most of those charges'').
---------------------------------------------------------------------------
    Filing administrative actions solely to force small 
employers to hire attorneys and defend themselves, in the 
words, of Larry Gordon, owner of three-employee G & N 
Fabrications in Franklin, Indiana, ``is not right. It hurts all 
American employers and employees and their families. It will 
ultimately drive small operations like mine out of business.'' 
\19\
---------------------------------------------------------------------------
    \19\ May 10, 1999 written testimony of Larry Gordon, before joint 
field hearing of the House Subcommittee on Employer-Employee Relations 
and the Senate Subcommittee on Employment, Safety and Training, 
Indianapolis, Indiana, 106th Cong., 1st Sess., p. 3.
---------------------------------------------------------------------------
    H.R. 1987 adds language to the NLRA and the OSH Act stating 
that an employer or labor organization who has not more than 
100 employees and a net worth of not more than $7 million and 
is a ``prevailing party'' against the Board or the OSHA in 
administrative proceedings ``shall be'' awarded fees as a 
prevailing party under the EAJA ``without regard to whether the 
position of [the Board or the Secretary of Labor] was 
substantially justified or special circumstances make an award 
unjust.'' It is essentially a ``loser pays'' rule applying to 
both agencies in their actions against small employers or labor 
organizations.\20\
---------------------------------------------------------------------------
    \20\ Contrary to assertions of some during Committee hearings 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 9 at p. 25. Furthermore, the Black's Law Dictionary 
definition of the ``American Rule'' states that ``attorney fees are not 
awardable to the winning party unless statutorily or contractually 
authorized'' (Emphasis added.)
---------------------------------------------------------------------------
    The FAIR Act awards fees and expenses ``in accordance with 
the provisions'' of the EAJA and would thus require a party to 
file a fee application pursuant to the Board's or the OSHRC's 
existing EAJA regulations, but the prevailing party would not 
be precluded from receiving an award by either agency showing 
it was ``substantially justified'' in bringing the case or that 
``special circumstances make an award unjust.'' If the agency 
loses, it pays the winner's fees and expenses.
    H.R. 1987 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 or the OSHA. This 
covers situations in which the party wins a case against either 
agency in civil court, including a proceeding for judicial 
review of agency action. 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. H.R. 1987 makes clear that 
fees and expenses incurred appealing an actual fee 
determination under the FAIR Act would also be awarded to a 
prevailing party without regard to the ``substantial 
justification'' burden of proof.
    This legislation levels the playing field for small 
employers against the Board and the OSHA because it will cause 
both agencies to more carefully evaluate the merits of a case 
before bringing it forward against a small business or labor 
organization. It also offers the small entity the incentive to 
fight a meritless case brought against it and see the case 
through to full consideration. H.R. 1987 applies to employers--
businesses and unions--which have not more than 100 employees 
and a net worth of not more than $7 million. The employee-
eligibility limit is a mere 20 percent of the current 500 
employee limit for employers under the EAJA. The FAIR Act 
adopts the regulations and fee application procedures 
promulgated by the NLRB and the OSHRC pursuant to the EAJA, 
except that either agency shall award fees and expenses to 
qualified applicants without regard to whether the Board or the 
Secretary of Labor was substantially justified or special 
circumstances make an award unjust.\21\
---------------------------------------------------------------------------
    \21\ The Board's and the OSHRC's EAJA regulations, 29 CFR Part 
102.143-102.155; 29 CFR Part 2204.101-2204.311, 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); 29 CFR Part 2204.105(e). 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-rata 
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 the FAIR Act. 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''). Under the FAIR Act, it still would 
be the prevailing party's burden to assert the number of employees of 
the applicant. 29 CFR Part 102.147(a); 29 CFR Part 2204.201(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 H.R. 1987 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 the OSHRC's EAJA regulations state, the number of employees 
``shall be determined as of the date the notice of contest was filed 
or, in the case of a petition for modification of abatement period, the 
date the petition was received by the Commission.'' 29 CFR Part 
2204.105(c).
---------------------------------------------------------------------------
    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 H.R. 1987, 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 $7 million.
    Neither the EAJA nor either agency's EAJA regulations 
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.\22\ Under the NLRB's and 
the OSHRC'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.\23\ 
In addition, the applicant must provide ``a detailed exhibit'' 
showing the net worth of the applicant ``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.'' \24\ 
Thus, under current law, the applicant must make the assertion 
of net worth in its fee application and it is up to the agency, 
or administrative law judge, to whom the application is 
submitted, to object.
---------------------------------------------------------------------------
    \22\ H. Rept. 96-1418, p. 15; S. Rept. 96-253, p. 17.
    \23\ 29 CFR Part 102.147(b) and 102.147(e); 29 CFR Part 2204.201(b) 
and 2204.201(e).
    \24\ 29 CFR Part 102.147(f); 29 CFR Part 2204.202(a).
---------------------------------------------------------------------------
    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.'' \25\ Some courts, however, have differed 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.\26\
---------------------------------------------------------------------------
    \25\ H. Rept. 96-1418, p. 15.
    \26\ 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 the FAIR Act 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 [agency] by frustrating the 
investigation with such tactics as, for example, ``refusing to 
allow witnesses to be interviewed, withholding documents and 
substituting lawyers' submissions for hard evidence.'' \27\ 
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 either agency from advancing ``novel'' 
theories which they could argue justifies denying a small 
business or union from receiving a fee award,\28\ and to make 
inapplicable to entities qualifying under H.R. 1987 the line of 
EAJA cases allowing an agency to deny awards based on the 
agency pushing a novel theory of law. It is the Committee's 
view that these two agencies should not be using small entities 
of limited resources as guinea pigs to advance new legal 
theories. Indeed, if either agency wishes to advance some novel 
theory of law, to ``push the envelope,'' then let they at least 
do so against those who are larger than 100 employees and have 
a net worth of more than $7 million.
---------------------------------------------------------------------------
    \27\ Hearing on Legislation to Provide Fairness for Small 
Businesses and Employees, 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, 105th Cong., 2nd Sess., p. 116 (February 
5, 1998) (Serial No. 105-72).
    \28\ 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); Tri-State 
Steel Construction Co. v. Herman, 164 F.3d 973, 979 (6th Cir. 
1999)(OSHA EAJA case wherein court rejected notion that asset 
aggregation constitutes ``special circumstances;'' rather, ``We have, 
as the Secretary acknowledges, rejected this approach * * * and held 
that `special circumstances' implicates substantive issues such as 
close or novel questions of law'').
---------------------------------------------------------------------------
    As the National Grocers Association pointed out, allowing 
small entities to recoup their expenses when they prevail ``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 * * * precedent.'' \29\
---------------------------------------------------------------------------
    \29\ 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 agency's investigation, the Committee 
intends that the Board's and the OSHRC's existing EAJA 
regulations would cover situations involving such equities: 
``An award [will/shall] be reduced or denied if the applicant 
has unduly or unreasonably protracted the [adversary 
adjudication/proceeding].'' \30\
---------------------------------------------------------------------------
    \30\ 29 CFR Part 102.144(b); 29 CFR Part 2204.106(b).
---------------------------------------------------------------------------
    The FAIR Act says to the NLRB and to the OSHA that if they 
bring a case against a little guy they had better make sure the 
case is a winner, because if they lose, if they put the small 
business or union through the time, expense and hardship of an 
action only to have the small entity come out a winner in the 
end, then the agency 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 the FAIR Act and to the NLRB and 
the OSHA, ``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.'' \31\ 
Also, as Sen. Wendell Ford, D-KY stated, ``If the agencies 
choose their cases carefully they will be completely unaffected 
by this legislation.'' \32\ 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 H.R. 1987 seeks 
protection for the very small--those with no more than 100 
employees and a net worth of no more than $7 million.
---------------------------------------------------------------------------
    \31\ July 31, 1979, debate on the EAJA, 125 Cong. Rec. at 21444.
    \32\ Id., at 21439.
---------------------------------------------------------------------------

                               Conclusion

    The FAIR Act ensures that small businesses and small unions 
will have the incentive to fight meritless cases that the Board 
or the OSHA brings against them. If either agency decides to 
bring its vast resources and expertise to bear upon an entity 
with meager resources, then the agency should pay the 
prevailing party's attorney's fees and expense if the agency 
loses the case. Current law and practice under the EAJA has 
proven ineffective in leveling the playing field as Congress 
intended. The FAIR Act would return this needed balance.

                      Section-by-Section Analysis


Section 1

    Contains the Short Title, ``Fair Access to Indemnity and 
Reimbursement Act.''

Section 2

    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 and the OSHA; the ineffectiveness and 
underutilization of the Equal Access to Justice Act at both 
agencies; and the necessity of a different standard that awards 
fees and costs to certain small entities prevailing against the 
Board or the OSHA. Also provides that the purpose of H.R. 1987 
is to ensure that certain small businesses and small labor 
organizations will not be deterred from seeking review of, or 
defending against, Board or OSHA actions because of the expense 
involved; to reduce the disparity in resources and expertise 
between certain small entities and the NLRB and the OSHA, and 
to make both agencies more accountable for their enforcement 
actions.

Section 3

    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 $7 
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 4

    Provides that Section 3 applies to agency proceedings and 
civil actions commenced on or after the date of the enactment 
of this Act.

Section 5

    Amends the Occupational Safety and Health Act to require 
the Secretary of Labor 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 $7 million who prevail against the OSHA 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 Secretary of Labor or the 
United States was substantially justified or special 
circumstances make an award unjust.

Section 6

    Provides that Section 5 applies to agency proceedings and 
civil actions commenced on or after the date of the enactment 
of this Act.

                       Explanation of Amendments

    The Amendment in the Nature of a Substitute is explained in 
the body of this report.

              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 provides for the reimbursement of attorney's 
fees and expenses to certain prevailing small employers, the 
legislation is intended to help prevent spurious lawsuits and 
ensure that employers of modest means have an incentive to 
adequately represent themselves against the National Labor 
Relations Board (NLRB) and the Occupational Safety and Health 
Administration (OSHA). 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 (as amended by Section 101(a)(2) of the Unfunded 
Mandates Reform Act, P.L. 104-4) requires a statement of 
whether the provisions of the reported bill include unfunded 
mandates. This bill provides for the reimbursement of 
attorney's fees and expenses to certain prevailing small 
employers. As such, the bill does not contain any unfunded 
mandates.

                             Rollcall Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee Report to include for 
each record vote on a motion to report the measure or matter 
and on any amendments offered to the measure or matter the 
total number of votes for and against and the names of the 
Members voting for and against.


                             Correspondence

                                  House of Representatives,
                                    Washington, DC, August 3, 1999.
Hon. William Goodling,
Committee on Education and the Workforce,
Rayburn House Office Building, Washington, DC.
    Dear Mr. Chairman: On roll call vote number one, regarding 
reporting H.R. 1987 to the House floor, I was unavoidably 
detained due to legislative duties. Had I been present, I would 
have voted aye.
    I would appreciate this letter being inserted into the 
Committee's report. Thank you for your attention to this 
matter.
            Sincerely,
                                 Howard P. ``Buck'' McKeon,
                                                Member of Congress.
                                ------                                

                                  House of Representatives,
                                Washington, DC, September 27, 1999.
Hon. Bill Goodling,
Chairman, Education and the Workforce Committee,
Rayburn House Office Building, Washington, DC.
    Dear Chairman Goodling: Due to a conflict in my legislative 
responsibilities I was unavoidably detained from voting during 
the Committee on Education and the Workforce's consideration of 
Roll Call Vote number 1, the motion to report favorably the 
bill H.R. 1987, the ``Fair Access to Indemnity and 
Reimbursement Act'', to the House of Representatives.
    Had I been present I would have voted ``aye''. I would 
appreciate this letter being included in the Committee Report 
to accompany this bill. Thank you for your attention to this 
matter.
            Sincerely,
                                           Charlie Norwood,
                                                Member of Congress.
                                ------                                

                                  House of Representatives,
                                Washington, DC, September 21, 1999.
Hon. William F. Goodling,
Chairman, Education and the Workforce Committee,
Rayburn House Office Building, Washington, DC.
    Dear Mr. Chairman: Due to other legislative 
responsibilities, I was unable to be present for the House 
Education and the Workforce Committee vote on H.R. 1987, the 
Fair Access to Indemnity and Reimbursement Act of 1999. Had I 
been present I would have voted in the affirmative. Please 
include this in the full committee report. Thank you.
            Sincerely,
                                               Matt Salmon,
                                                Member of Congress.

  Statement of Oversight Findings and Recommendations of the Committee

    In compliance with clause 3(c)(1) of rule XIII 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.

   New Budget Authority and Congressional Budget Office Cost Estimate

    With respect to the requirements of clause 3(c)(2) of rule 
XIII of the House of Representatives and section 308(a) of the 
Congressional Budget Act of 1974 and with respect to 
requirements of 3(c)(3) of rule XIII of the House of 
Representatives and section 402 of the Congressional Budget Act 
of 1974, the Committee has received the following cost estimate 
for H.R. 1987 from the Director of the Congressional Budget 
Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                   Washington, DC, October 5, 1999.
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. 1987, the Fair 
Access to Indemnity and Reimbursement Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Christina 
Hawley Sadoti and Cyndi Dudzinski.
            Sincerely,
                                          Barry B. Anderson
                                    (For Dan L. Crippen, Director).
    Enclosure.

H.R. 1987--Fair Access to Indemnity and Reimbursement Act

    Summary: H.R. 1987 would increase spending by the National 
Labor Relations Board (NLRB) and the Occupational Safety and 
Health Administration (OSHA) by allowing small businesses to be 
awarded attorney's fees and expenses when they prevail against 
the NLRB or OSHA in administrative or judicial proceedings. By 
enabling those businesses to be reimbursed regardless of 
whether the position of the NLRB or OSHA was substantially 
justified, H.R. 1987 would increase spending by about $4 
million in 2000, and $20 million over the 2000-2004 period, 
subject to annual appropriations.
    In addition, enactment of H.R. 1987 could affect fines 
collected by the federal government from companies that violate 
employment health and safety laws. Although the reduction in 
the amount of fines is likely to be insignificant, the bill 
would be subject to pay-as-you-go procedures.
    H.R. 1987 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would impose no costs on the budgets of state, local, or 
tribal governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 1987 is shown in the following table. 
The costs of this legislation fall within budget functions 500 
(education, training, employment, and social services) and 550 
(health).

------------------------------------------------------------------------
                                By fiscal years, in millions of dollars--

                               -----------------------------------------
                                 1999   2000   2001   2002   2003   2004
------------------------------------------------------------------------
                    SPENDING SUBJECT TO APPROPRIATION

Spending by the NLRB and OSHA
 Under Current Law: \1\
    Estimated Authorization       528    549    567    586    605    624
     Level....................
    Estimated Outlays.........    527    547    565    583    602    622
Proposed Changes:
    Estimated Authorization         0      4      4      4      4      4
     Level....................
    Estimated Outlays.........      0      4      4      4      4      4
Spending by the NLRB and OSHA
 Under H.R. 1987:
    Estimated Authorization       528    553    571    590    609    628
     Level....................
    Estimated Outlays.........    527    551    569    587    606   626
------------------------------------------------------------------------
\1\ Amounts shown are CBO's baseline projections, assuming adjustments
  for anticipated inflation. Without such inflation adjustments, the
  estimates under current law would be $528 million each year, and the
  estimates of spending under H.R.. 1987 would be $532 million for each
  year over the 2000-2004 period.

Basis of estimate

            Spending subject to appropriation
    H.R. 1987 would amend the statutes governing the NLRB and 
OSHA to change the situations in which these agencies make 
payments under the Equal Access to Justice Act (EAJA). 
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, that is difficult to prove. Between 1982 and 1997, 
345 parties involved in NLRB cases filed applications under 
EAJA. Those claims represent about 4 percent of the NLRB cases 
which went to adjudication. Of those applications, only 59 of 
NLRB petitions (about 17 percent of those that had applied) 
were granted. Over the same period, 82 parties involved in OSHA 
cases filed applications under EAJA, which represented less 
than 1 percent of OSHA cases that went to adjudication. Of 
those applications, 37 percent were granted EAJA reimbursement. 
A total of $1.6 million in fees and expenses was awarded under 
EAJA from cases involving the two agencies.
    Enacting H.R. 1987 would make it easier for very small 
businesses to recover fees and expenses by eliminating the 
requirement that they prove the U.S. government was not 
substantially justified in bringing its case. The increase in 
spending by the NLRB and OSHA due to that change would be about 
$4 million annually. In accordance with provisions of EAJA, the 
payments of fees and expenses would be made from each agency's 
discretionary appropriations.
    Of the roughly 30,000 unfair labor practice cases brought 
annually by the NLRB, about half involve firms with fewer than 
100 employees, and less than 2 percent of those cases go to 
adjudication. The NLRB generally prevails in over 80 percent of 
cases brought before an administrative law judge. Although the 
NLRB does not keep data on the net worth of the businesses 
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 company. This 
estimate assumes that about half of the cases lost by the 
NLRB--or about 40 per year--involve establishments that meet 
the size and net worth tests under H.R. 1987. Using the average 
amount paid by the NLRB under EAJA, CBO estimates that the NLRB 
would pay an additional $1 million per year.
    In regard to OSHA cases under EAJA, the prevailing party is 
determined on a per citation basis. If a fine or penalty out of 
the several fines that may be contested in a case is removed or 
significantly reduced, OSHA reimburses the employer for the 
attorney's fees attributable to that portion of the case. In 
almost all of the OSHA cases that have been contested by the 
employer in adjudication, the judges have reduced the fines to 
be collected from the employer. Based on data from the 
Occupational Safety and Health Review Commission through 1998, 
the amount awarded for attorney's fees under EAJA has varied, 
but averages around $8,000 per case. In 1998, 350 of the OSHA 
cases that went to adjudication involved employers with 100 or 
fewer employees. Based on this information, CBO estimates that, 
under H.R. 1987, OSHA would pay an additional $3 million per 
year in attorney's fees.
    Pay-as-you-go consideration: The Balanced Budget and 
Emergency Deficit Control Act sets up pay-as-you-go procedures 
for legislation affecting direct spending or receipts. 
Requiring OSHA to pay the attorney's fees for very small 
businesses that prevail against OSHA in adjudication would 
increase the incentive for OSHA to reduce its fine or penalty 
in a settlement and avoid adjudication. This could reduce the 
amount of the penalties OSHA would have otherwise collected 
from these employers. Amounts collected from these employers. 
Amounts collected from fines and penalties are considered 
revenues and are thus subject to pay-as-you-go procedures. 
Based on the amount that OSHA has collected after adjudication 
in the past, CBO estimates the reduction in revenue from 
enacting H.R. 1987 would be less than $500,000 a year.
    Intergovernmental and private-sector impact: H.R. 1987 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would not affect the budgets of state, 
local, or tribal governments.
    Estimate prepared by: Federal Costs: Christina Hawley 
Sadoti and Cyndi Dudzinski. Impact on State, Local, and Tribal 
Governments: Susan Sieg. Impact on the Private Sector: Ralph 
Smith.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

 Statement of Oversight Findings of the Committee on Government Reform

    With respect to the requirement of clause 3(c)(4) of rule 
XIII 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 on the 
subject of H.R. 1987.

                   Constitutional Authority Statement

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee finds that the 
Constitutional authority for this legislation is provided in 
Article I, section 8, clause 3, which grants Congress the power 
to regulate commerce with foreign nations, among the several 
States, and with the Indian tribes.

                           Committee Estimate

    Clauses 3(d)(2) 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. 1987. However, clause 3(d)(3)(B) 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 402 of the Congressional Budget Act.

         Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3(e) 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):

             SECTION 20 OF THE NATIONAL LABOR RELATIONS ACT



                  awards of attorneys' fees and costs


  Sec. 20. (a) Administrative Proceedings.--An employer who, or 
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 $7,000,000 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 $7,000,000 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.
                              ----------                              


         SECTION 12A OF THE OCCUPATIONAL SAFETY AND HEALTH ACT


                  awards of attorneys' fees and costs


  Sec. 12A. (a) Administrative Proceedings.--An employer who--
          (1) is the prevailing party in an adversary 
        adjudication before the Occupational Safety and Health 
        Review Commission under this or any other Act, and
          (2) had not more than 100 employees and a net worth 
        of not more than $7,000,000 at the time the adversary 
        adjudication was initiated,
shall be awarded from the Secretary of Labor 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 
Secretary of Labor 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--
          (1) is the prevailing party in a civil action, 
        including proceedings for judicial review of an action 
        by the Occupational Safety and Health Review 
        Commission, brought by or against the Secretary or the 
        Commission, and
          (2) had not more than 100 employees and a net worth 
        of not more than $7,000,000 at the time the civil 
        action was filed,
shall be awarded from the Secretary of Labor 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. 1987, the ``Fair Access to Indemnity and Reimbursement 
Act,'' seeks to reverse the American Rule, under which each 
party to litigation pays its own costs, in a single class of 
cases, namely, those in which the National Labor Relations 
Board (NLRB or Board) and the Occupational Safety and Health 
Administration (OSHA) do 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 $7 million. Workers have no private right of action under 
the Occupational Safety and Health Act (OSH Act) or the 
National Labor Relation Act (NLRA). Consequently, workers rely 
on OSHA and the NLRB to protect their rights to a safe and 
healthful workplace and their right to form and join unions for 
the purpose of exercising a voice in the determination of their 
wages and working conditions. If the NLRB and OSHA are deterred 
from bringing cases they are not guaranteed to win, workers' 
rights and protections would be severely eroded.
    The Majority failed to provide any evidence whatsoever that 
the Board or OSHA have abused their statutory authority in 
issuing and prosecuting complaints. The Majority has also 
failed to show that the Equal Access to Justice Act provides 
insufficient redress to respondents who prevail in proceedings 
before the NLRB and OSHA Review Commission.
    H.R. 1987 is a blatant attempt to chill the Board's and 
OSHA's exercise of statutory responsibility to enforce the NLRA 
and the OSH Act, by penalizing these agencies for every 
instance in which they attempt to do so unsuccessfully. Instead 
of encouraging cooperation between employers and the two 
agencies, H.R. 1987 would actually encourage defendants to 
litigate matters with the NLRB and OSHA, resulting in fewer 
settlements, lengthier litigation, and ultimately delaying 
compliance with the NLRA and the OSH Act. Enactment of H.R. 
1987 would put the safety and health of thousands of workers at 
risk and deny workers the right to organize in order to secure 
higher pay, greater benefits, and job protections.
    Proponents of H.R. 1987 do not even attempt to suggest that 
the costs imposed by H.R. 1987 would be offset by additional 
appropriations to the NLRB and the Department of Labor. While 
we are more than a week into fiscal year 2000, the House has 
yet to pass the FY 2000 Labor, Health and Human Services (HHS), 
and Education appropriations bill. However, as reported by the 
Committee on Appropriations, Republicans have proposed to 
reduce overall OSHA funding from FY 1999 levels by 5% and to 
cut funding for workplace safety enforcement by 8%. Under the 
appropriations bill, H.R. 3037, OSHA would be required to 
eliminate 275 positions, including 175 inspectors, and to 
furlough all OSHA employees for 21 days. The Republicans have 
also proposed to reduce the budget of the NLRB by 5% from FY 
1999 levels. The Republicans' proposed appropriation for the 
Board is 17% below the President's request and would impose 
staff reductions of 134 full-time equivalent positions upon the 
agency. The prospect of H.R. 3037 being enacted into law are, 
at best, very remote. It seems likely that additional funding 
will ultimately be found for the Labor, HHS, and Education 
appropriations bill and that OSHA and the NLRB will be funded 
at higher levels than those in H.R. 3037. However, the prospect 
of allowances being made in the budget of either agency to 
absorb the costs imposed upon the agencies by H.R. 1987 is non-
existent. As a consequence, the additional costs imposed by 
H.R. 1987 must ultimately come at the expense of agency efforts 
to deter and remedy violations of the law.
    Furthermore, H.R. 1987 will require taxpayers to underwrite 
the expenses of employer violations. H.R. 1987 requires the 
NLRB and OSHA to pay employers attorneys fees for any part of a 
case they do not win. As such, if an employer loses ten claims, 
but wins one, an employer may claim entitlement to payment as a 
prevailing party and taxpayers would be responsible for the 
bill.

                        description of h.r. 1987

    H.R. 1987 requires that the NLRB pay the fees and expenses 
of certain businesses and labor organizations that prevail ``in 
an adversary adjudication conducted by the Board'', or ``in 
a[ny] 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 $7 million. Likewise, H.R. 1987 requires that 
OSHA, via the Department of Labor (who would be responsible for 
paying when judgments are rendered against the Occupational 
Safety and Health Review Commission), pay the fees and expenses 
of small businesses and labor organizations that prevail ``in 
an adversary adjudication before the Occupational Safety and 
Health Review Commission'', or ``in a[ny] civil action, 
including proceedings for judicial review of an action by the 
Occupational Safety and Health Review Commission, brought by or 
against the Secretary or the Commission.'' This provision will 
also apply to employers and labor organizations with not more 
than 100 employees and a net worth not more than $7 million.

              h.r. 1987 is not limited to small businesses

    H.R. 1987, despite its stated intent to apply to ``small 
businesses and labor organizations,'' achieves far broader 
coverage with its enlarged net worth and employee requirements. 
Bureau of Labor Statistics data for the first quarter of 1998 
show that there were over 6.5 million private sector 
establishments with 99 or fewer employees, employing 55 million 
workers, 54% of the private sector workforce. These 
establishments comprise the vast majority of American 
businesses--about 97%.\1\ 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.'' \2\ Similarly, the 
Americans with Disabilities Act covers employers with fifteen 
or more employees, 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. 1987 serves 
a rhetorical purpose only; in practice, it achieves nearly-
universal coverage.
---------------------------------------------------------------------------
    \1\ See U.S. Census Bureau, Statistics of U.S. Businesses, 
internet:http://www.census.gov.
    \2\ 29 U.S.C. 630(b).
---------------------------------------------------------------------------

                h.r. 1987 is unsupported by the evidence

    Moreover, there is no evidence to justify this radical 
departure from the American Rule, under which each party to 
litigation bears its own costs. The Majority has come forward 
with nothing to demonstrate that the NLRB's and OSHA's 
prosecutorial discretion should be changed in this manner. 
Indeed, the statistics demonstrate otherwise. According to the 
Majority's views, out of more than 30,000 allegations of unfair 
labor practices filed with the NLRB, the NLRB brought only 
3,421 complaints. The fact that 9 out of 10 allegations filed 
with the Board failed to result in the issuance of a complaint, 
a necessary step for the provisions of H.R. 1987 to be 
triggered, is hardly evidence that the agency is filing massive 
numbers of frivolous or non-meritorious cases. In Fiscal Year 
'98, 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 97 days without the necessity of formal 
litigation: 30.7 percent through dismissal before complaint, 
30.6 percent through withdrawals before complaint, and 33.1 
percent through settlements and adjustments.\3\ Moreover, in FY 
'98, 144 cases involving the NLRB were decided by the courts of 
appeals. Of these cases, the Board won 83.4 percent in whole or 
in part; 5.6 percent of these cases the courts remanded 
entirely; and 11.0 percent were cases lost in their entirety 
(compared to 12.0 percent in FY '97). \4\ 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 
judicial proceedings.
---------------------------------------------------------------------------
    \3\ NLRB's FY '98 Report at 5.
    \4\ Id. at 17.
---------------------------------------------------------------------------
    Furthermore, 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 11,910 
cases closed in Fiscal year 1998, this remedial action was 
invoked in 3,402 of them.\5\
---------------------------------------------------------------------------
    \5\ FY '98 Report at 136.
---------------------------------------------------------------------------
    OSHA statistics also undermine the contention that OSHA has 
engaged in a practice of prosecutorial abuse. According to the 
Majority's views, out of nearly 77,000 total violations cited 
in fiscal year 1998, only 2,061 inspections resulted in 
citations that were contested. Once again, the facts have 
condemned the Majority's case. In FY '98, Federal OSHA 
conducted more than 34,000 inspections, 16,396 of which 
resulted in citations at workplaces with fewer than 100 
employees. Sixty percent of these citations were settled 
between OSHA and the employer in informal conferences. 
Employers contested 1,275 or 8% of the citations before the 
Occupational Safety and Health Review Commission. Moreover, in 
FY '98 nineteen (19) OSHA enforcement cases were decided by 
Federal appellate courts. OSHA won a total of 77 percent of 
these cases (Most of which had originated several years before 
FY '98).\6\ These numbers suggest that OSHA neither issues 
citations nor enters into litigation against employers in a 
capricious manner.
---------------------------------------------------------------------------
    \6\ See Data From The Office of the Solicitor For Records, U.S. 
Department of Labor, 1998.
---------------------------------------------------------------------------
    In fact, there has been virtually no consideration of H.R. 
1987 on the part of this Committee. The only hearing that the 
Majority claims to have held on H.R. 1987 is a single field 
hearing held in Indianapolis.\7\ However, the major focus of 
that hearing was on another bill, H.R. 1441. Much of the 
testimony recited in the Majority views in support of this 
legislation is, in fact, irrelevant to it. Mr. Krupin and Mr. 
Norwillo are complaining primarily about costs employers incur 
in responding to allegations, as opposed to complaints.\8\ Mr. 
Mailman provided unsubstantiated testimony regarding costs he 
incurred defending himself against allegedly frivolous charges 
that never resulted in the issuance of a complaint. H.R. 1987 
does nothing to alter the duty of the NLRB and OSHA to 
investigate allegations brought to them and therefore does not 
address employer costs associated with such investigations. The 
remedies provided by H.R. 1987 are only triggered once OSHA or 
the NLRB have brought a complaint. If the Majority believes 
they have identified a problem, they have failed to address it. 
If the Majority believes they have identified a solution, they 
have failed to justify it.
---------------------------------------------------------------------------
    \7\ Joint Hearing on ``the Practice of Salting and its Impact on 
Small Business'', May 10, 1999, Indianapolis, Indiana.
    \8\ Specifically, Mr. Norwillo in his May 10, 1999 written 
statement discusses the costs involved in responding to salting 
allegations, as opposed to complaints. Mr. Norwillo states, ``Salting 
ULP's and other administrative filings, regardless of how frivolous or 
patently false, require an employer response. These responses mandate 
the reallocation of time, money and other productive resources from 
marketing, advertising, sales, market research, employee training and 
other legitimate business pursuits. Invariably, employer attorney's 
fees comprise the largest component of this defense cost. These 
daunting figures compel employers to settle contested charges on 
unfavorable terms regardless of culpability. In addition, these 
financial pressures impose an independent pecuniary penalty on 
employers who resist the temptation to settle and prevail on the 
charges, this chilling the resolve of employers to defend against a 
repeat barrage in the future.''
---------------------------------------------------------------------------
    The Majority justifies the bill, in part, on the basis of 
hearings held in the previous Congress. However, the Majority 
also describes H.R. 1987 as ``an expanded version of Title IV 
of last Congress' H.R. 3246.'' The Majority fails to offer any 
further explanation of the differences between Title IV of H.R. 
3246 and H.R. 1987. However, H.R. 1987 is considerably broader 
than Title IV of H.R. 3246 in that it not only applies to a 
greater number of employers (H.R. 3246 was limited to employers 
or unions with not more than 100 employees and a net worth of 
not more than $1.4 million), but also, for the first time, 
extends the legislation to cover actions by OSHA. No witnesses 
in the previous Congress testified as to the appropriateness of 
extending H.R. 3246 to OSHA, nor did any of the witnesses at 
the Indianapolis hearing address this issue. The Committee has 
made the determination to require OSHA to pay employer attorney 
fees in any case in which it does not prevail, regardless of 
how justified the agency was in bringing the case, without ever 
soliciting any testimony regarding the appropriateness of such 
an action. So much for the documented need for this 
legislation.
    Since OSHA either settles or wins the vast majority of 
enforcement cases, there is no justification for assuming that 
employers need to be protected against an overzealous 
prosecutorial agency. Instead of encouraging cooperation 
between employers and OSHA, H.R. 1987 would actually encourage 
defendants to litigate. Fewer settlements and lengthier 
litigation would delay compliance with the OSH Act. This would 
come at a time when OSHA's commitment to the protection of 
millions of American workers has had a tremendous impact on 
reducing occupational injuries, illnesses and death. As such, 
attempting to alter the agency's prosecutorial discretion could 
prove to be extremely counterproductive and disastrous to 
millions of workers.

 small employers are already entitled to recovery of legal fees under 
                                  eaja

    Not only is there a total lack of evidence as to NLRB or 
OSHA abuses that would warrant this unprecedented shifting of 
fees in NLRA and OSHA litigation, but there is already a remedy 
for parties that prevail in litigation involving the Board, 
namely the Equal Access to Justice Act (EAJA).\9\ Further, 
while the Committee has jurisdiction over the OSHA and the 
NLRB, it does not have jurisdiction over EAJA. We are unaware 
of any concerns expressed by the Government Reform or judiciary 
Committees, the Committees which have responsibility for 
assessing the law, that EAJA is failing to achieve 
Congressional intent. Nor has any evidence been presented to 
this Committee that EAJA works any differently at the NLRB or 
OSHA than it does at any other agency. In fact, the GAO study 
cited by the Majority clearly indicates the opposite. The 
Majority contends that EAJA is underutilized and has been 
judicially interpreted contrary to congressional intent and 
therefore has failed. However, the only evidence offered for 
the assertions are the assertions, themselves.
---------------------------------------------------------------------------
    \9\ 5 U.S.C. at 504 (EAJA).
---------------------------------------------------------------------------
    H.R. 1987 would penalize two government agencies, agencies 
coincidentally charged with protecting workers' rights, every 
time it loses regardless of how meritorious the action of the 
agency was. 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.\10\ 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 reason 
whatsoever to single out proceedings involving the NLRB and 
OSHA for imposition of such a rule.
---------------------------------------------------------------------------
    \10\ Id. at 504(a)(1).
---------------------------------------------------------------------------
    Furthermore, there is no data to back the characterization 
that small businesses have underutilized EAJA with respect to 
administrative and judicial actions under the NLRA and the OSH 
Act. In fact, according to a GAO study, the NLRB and the 
Department of Labor ranked fourth and fifth, respectively, out 
of 15 Federal agencies, in the number of judicial decisions 
issued with respect to EAJA applications in FY '94. 
Specifically, OSHA awarded approximately $192,494 in EAJA fees 
during fiscal years 1987-1997, in 28 cases. This amounts to an 
average EAJA award of $6,874, a statistic which hardly 
demonstrates that employers, small or large, have spent huge 
sums of money in defense of frivolous suits under the OSH Act.

   Implementation of H.R. 1987 Will Further Frustrate The Ability To 
                     Protect The Rights Of Workers

    There is nothing that is ``fair'' about what the 
Republicans call the ``FAIR Act.'' This legislation punishes 
agencies for bringing actions that are substantially justified 
but which the agency fails to win in whole. Coincidentally, the 
agencies that H.R. 1987 chooses to so punish are agencies 
charged with protecting the rights of workers. H.R. 1987's 
chilling effect on the willingness of the NLRB and OSHA to 
bring actions on behalf of workers is obvious. What we find 
particularly troubling, however, is that neither the NLRA nor 
the OSH Act afford workers a private right of action. Thwarting 
the ability of the NLRB or OSHA to bring actions on behalf of 
workers is, therefore, tantamount to denying workers any 
recourse in law. We strongly believe that the right to organize 
for the purpose of exercising a meaningful voice in the 
determination of one's terms and conditions of employment 
promotes the general welfare. Unions have raised living 
standards, helped to close the wage gap for women and 
minorities, and strengthened communities. We also strongly 
believe that workers should have an enforceable right to secure 
a safe and health workplace. H.R. 1987 impedes both objectives. 
By leaving workers with the legal claim of the right to form 
and join unions and to have a safe and health workplace, while 
denying workers a meaningful ability to enforce that claim, 
H.R. 1987 invites disrespect for the law and for the 
institutions that make and enforce the law. H.R. 1987 does not 
simply undermine the rights of working men and women, it does a 
disservice to fundamental principles of law and justice.

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

                                  
