[House Report 118-343]
[From the U.S. Government Publishing Office]


118th Congress}                                                {   Report
                        HOUSE OF REPRESENTATIVES
 2d Session   }                                                { 118-343

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



 
                SMALL BUSINESSES BEFORE BUREAUCRATS ACT

                                _______
                                

January 11, 2024.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

Ms. Foxx, 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. 3400]

    The Committee on Education and the Workforce, to whom was 
referred the bill (H.R. 3400) to amend the National Labor 
Relations Act to adjust the dollar thresholds for National 
Labor Relations Board jurisdiction over certain labor disputes, 
and for other purposes, having considered the same, reports 
favorably thereon with an amendment and recommends that the 
bill as amended do pass.
    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Small Businesses before Bureaucrats 
Act''.

SEC. 2. INCREASE OF DOLLAR THRESHOLD FOR NATIONAL LABOR RELATIONS BOARD 
                    JURISDICTION OVER CERTAIN LABOR DISPUTES.

  (a) In General.--Section 14(c) of the National Labor Relations Act 
(29 U.S.C. 164(c)) is amended--
          (1) by redesignating paragraph (2) as paragraph (3); and
          (2) by inserting after paragraph (1) the following:
  ``(2) In establishing by rule any dollar threshold with respect to a 
class or category of employers for the purposes of declining to assert 
jurisdiction over certain labor disputes involving such class or 
category of employers, the Board shall establish such dollar threshold 
at an amount--
          ``(A) for calendar year 2024, equal to the product of--
                  ``(i) the dollar threshold applicable to such class 
                or category as of the day prior to the date of 
                enactment of this paragraph, multiplied by
                  ``(ii) ten; and
          ``(B) for any calendar year after 2024, equal to the product 
        of--
                  ``(i) the dollar threshold applicable to such class 
                or category for calendar year 2024 (after the date of 
                enactment of this paragraph), multiplied by
                  ``(ii) the quotient obtained by dividing--
                          ``(I) the Personal Consumption Expenditure 
                        Per Capita Index (as published by the Bureau of 
                        Economic Analysis) for such calendar year after 
                        2024; by
                          ``(II) the Personal Consumption Expenditure 
                        Per Capita Index for calendar year 2024.''.
  (b) Personal Consumption Expenditure Per Capita Index.--The Bureau of 
Economic Analysis of the Department of Commerce shall prepare and 
publish an index reflecting expenditures for personal consumption by 
Americans on a per capita basis for each year, beginning calendar year 
2025, and such index shall be known as the ``Personal Consumption 
Expenditure Per Capita Index''.
  (c) Effective Date.--The amendments made by this section shall apply 
to any decision of the National Labor Relations Board relating to the 
assertion of its jurisdiction over a labor dispute made after the date 
of enactment of this section.

                                Purpose

    H.R. 3400, the Small Businesses before Bureaucrats Act, 
provides small businesses in various industries relief from the 
National Labor Relations Board's (NLRB or Board) continual 
flip-flopping of precedent, radical pro-union activism, and 
burdensome regulations. The bill amends the National Labor 
Relations Act (NLRA) to increase the Board-created monetary 
jurisdictional thresholds. The bill also ensures the NLRB's 
monetary jurisdictional thresholds reflect economic growth.

                            Committee Action


                             118TH CONGRESS

Hearing

    On May 23, 2023, the Subcommittee on Health, Employment, 
Labor, and Pensions held a hearing titled ``Protecting 
Employees' Rights: Ensuring Fair Elections at the NLRB.'' 
Witnesses were Mr. Philip A. Miscimarra, Partner, Morgan, 
Lewis, Bethesda, MD; Mr. Aaron Solem, Staff Attorney, National 
Right to Work Legal Defense and Education Foundation, 
Springfield, VA; Ms. Angela Thompson, General Counsel, 
Communications Workers of America, Washington, D.C.; and Mr. 
Cecil Leedy, Board of Directors, LEW Electrical Services, 
Tampa, FL. Republican members and witnesses discussed upcoming 
NLRB cases and their impact on small businesses and how H.R. 
3400 would relieve small businesses of regulatory burdens.

Legislative Action

    On May 17, 2023, Representative Bob Good (R-VA) introduced 
H.R. 3400, the Small Businesses before Bureaucrats Act, with 
Representatives Scott Perry (R-PA), John Moolenaar (R-MI), Mary 
Miller (R-IL), Tiffany Thomas (R-WI), Jeff Duncan (R-SC), Eric 
Burlison (R-MO), Randy Weber (R-TX), Scott Franklin (R-FL), 
Anna Paulina Luna (R-FL), Andrew Clyde (R-GA), Ralph Norman (R-
SC), Beth Van Duyne (R-TX), Brian Babin (R-TX), Tom Cole (R-
OK), Ron Estes (R-KS), and Ben Cline (R-VA) as original 
cosponsors.
    On December 12, 2023, the Committee considered H.R. 3400 in 
legislative session and the Committee adopted by voice vote an 
Amendment in the Nature of a Substitute offered by Rep. Good, 
which made technical changes to H.R. 3400. The Committee 
reported it favorably to the House of Representatives by a 
recorded vote of 23 to 20.

                            Committee Views


Introduction

    During the Biden administration, the NLRB has pursued an 
extreme agenda to transform national labor policy to favor 
labor unions at the expense of employee free choice and 
employer rights. The Biden NLRB is following the disturbing 
trend established during the Obama administration of overruling 
longstanding precedent and inappropriately expanding labor 
union privileges.
    Despite a congressional mandate that the NLRB act as a 
neutral arbiter of labor disputes,\1\ the NLRB has increasingly 
become a highly politicized agency. As a result, NLRB law 
swings like a pendulum depending on the political party 
occupying the White House. Such massive swings in Board 
precedent are harmful to the entire regulated community, 
particularly small businesses that rarely possess the resources 
to monitor continually shifting NLRB law and lengthy 
regulations or to pursue legal remedies in the courts.
---------------------------------------------------------------------------
    \1\See James J. Brudney, Isolated and Politicized: The NLRB's 
Uncertain Future, 26 Comp. Lab. L. & Pol'y J. 221, 243-44 (2004-2005).
---------------------------------------------------------------------------

Background on NLRB jurisdiction

    The NLRA, as amended by the Labor Management Relations Act 
of 1947, gives the NLRB power to assert jurisdiction over any 
question of representation or any unfair labor practice 
``affecting [interstate] commerce.''\2\ The Act further 
provides that
---------------------------------------------------------------------------
    \2\29 U.S.C. Sec. 159(c)(1)(B), 160(a).

          The Board, in its discretion, may, by rule of 
        decision or by published rules . . . decline to assert 
        jurisdiction over any labor dispute involving any class 
        or category of employers, where, in the opinion of the 
        Board, the effect of such labor dispute on commerce is 
        not sufficiently substantial to warrant the exercise of 
        its jurisdiction: Provided, That the Board shall not 
        decline to assert jurisdiction over any labor dispute 
        over which it would assert jurisdiction under the 
        standards prevailing upon August 1, 1959.\3\
---------------------------------------------------------------------------
    \3\Id. Sec. 164(c)(1)

    This grant of authority to the Board is limited in several 
ways. The NLRA does not apply to the United States or any 
wholly owned government corporation or any state or political 
subdivision, or any person subject to the Railway Labor Act. 
Those entities are excluded from the definition of the term 
employer under the NLRA.\4\ The Board's definition of the term 
employee also limits its jurisdiction by excluding agricultural 
laborers, domestic service in an individual's home, independent 
contractors, and supervisors.\5\
---------------------------------------------------------------------------
    \4\Id. Sec. 152(2).
    \5\Id. Sec. 152(3).
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    Along with these statutory limitations, the NLRB 
established in a series of decisions that it will decline to 
assert jurisdiction over certain employers and labor disputes. 
Primarily, the Board declines to assert jurisdiction over 
employers with annual gross volume or sales below certain 
thresholds when the impact on interstate commerce is marginal. 
In addition, the Board can decline to intervene in labor 
disputes that are so local in nature that it would not 
materially affect interstate commerce. In cases where the Board 
declines to assert jurisdiction over small employers, the NLRA 
does not prevent any ``agency or the courts of any State or 
Territory . . . from assuming and asserting jurisdiction over 
labor disputes over which the Board declines . . . to assert 
jurisdiction.''\6\
---------------------------------------------------------------------------
    \6\Id. Sec. 164(c)(2).
---------------------------------------------------------------------------
    In a series of decisions, monetary jurisdictional standards 
were created for various industries where the Board will accept 
jurisdiction if the employer involved meets the specific 
monetary standards. The two predominant monetary jurisdictional 
standards involve non-retail and retail businesses.\7\ The 
NLRB's jurisdictional standard for non-retail businesses is 
direct sales of goods to consumers in other States, or indirect 
sales through others (called outflow), of at least $50,000 a 
year; or direct purchases of goods from suppliers in other 
States, or indirect purchases through others (called inflow), 
of at least $50,000 per year. The retail business standard is 
at least $500,000 in annual gross volume of business per year. 
In applying any of the annual gross volume of business 
standards, there must be evidence that some portion of the 
$500,000 involves interstate commerce.
---------------------------------------------------------------------------
    \7\For a full list of the NLRB's jurisdictional standards, see 
NLRB, Basic Guide to the NLRA 33-34 (1997), https://www.nlrb.gov/sites/
default/files/attachments/basic-page/node-3024/basic
guide.pdf; NLRB, An Outline of Law and Procedure in Representation 
Cases 1-27 (2017), https://www.nlrb.gov/sites/default/files/
attachments/basic-page/node-1727/OutlineofLawand
ProcedureinRepresentationCases_2017Update.pdf.
---------------------------------------------------------------------------
    Generally, if an enterprise meets the total annual volume 
of business listed in the standard, it will be considered 
engaged in activities that ``affect'' commerce. However, the 
Board must find, based on evidence, that the enterprise does 
affect commerce. The Board has established the policy that when 
an employer whose operations affect commerce refuses to supply 
the Board with information necessary to confirm total annual 
business, the Board may exercise jurisdiction and disregard its 
jurisdictional monetary thresholds.\8\
---------------------------------------------------------------------------
    \8\Tropicana Products, 122 NLRB 121 (1958).
---------------------------------------------------------------------------

The NLRB's activist union agenda

    Congress enacted the NLRA predominantly ``to assure freedom 
of choice and majority rule in employee selection of 
representatives.''\9\ Summarized succinctly, the NLRA is meant 
to ensure ``the employees pick the union; the union does not 
pick the employees.''\10\ The Biden NLRB has failed to adhere 
to these guiding principles and is implementing a radical 
agenda to force union representation on employees who would 
prefer to refrain from union activities. The Board majority's 
and General Counsel's extreme agenda is also at odds with 
congressional intent. Congress chose to establish the NLRB in 
1935 as a ``strictly nonpartisan'' Board composed of ``three 
impartial Government members.''\11\ Such radical and 
politically motivated regulations and decisions by the Board 
make it imperative to exempt certain small businesses because 
they are least able to withstand these costs.
---------------------------------------------------------------------------
    \9\Int'l Ladies' Garment Workers' Union v. NLRB, 366 U.S. 731, 739 
(1961).
    \10\Colorado Fire Sprinkler, Inc. v. NLRB, 891 F.3d 1031, 1038 
(D.C. Cir. 2018).
    \11\Joan Flynn, A Quiet Revolution at the Labor Board: The 
Transformation of the NLRB, 1935-2000, 61 Ohio St. L.J. 1361, 1363 
(2000) (quoting 1935 Senate committee report on the NLRA) (internal 
quotation marks omitted).
---------------------------------------------------------------------------
    In April 2022, NLRB General Counsel (GC) Jennifer Abruzzo 
issued a memorandum that all employer discussions about union 
issues are ``inherently'' unlawful, even when the employer 
speech is not threatening or coercive. The GC is also 
prosecuting claims and arguing to the Board that it is an 
unfair labor practice for employers to require employees, on 
paid work time, to attend meetings where the employer expresses 
its opinion concerning unionization. Thus, the GC is urging the 
Board to discard decades of case law, NLRB precedent upholding 
an employer's First Amendment right to educate its employees 
about unionization, and Congress's amendments to the NLRA.\12\
---------------------------------------------------------------------------
    \12\https://www.littler.com/publication-press/publication/nlrb-
general-counsel-aggressively-seeks-expand-unions-right-demand.
---------------------------------------------------------------------------
    Philip Miscimarra, former NLRB Chairman and a partner at 
Morgan Lewis, testified before the Committee about the GC's 
attempted ban of employer speech related to union issues and 
how Congress already addressed such arguments when enacting the 
Taft-Hartley Act:

          The General Counsel's attempted broad ban on an 
        employer's union-related discussions is not new. The 
        NLRB adopted precisely the same speech prohibition in a 
        1946 case--Clark Bros. Co.--which Congress repudiated 
        the very next year by adding Section 8(c) to the NLRA 
        as part of the Taft-Hartley Act. . . .
          Both the Senate and House bills contained language 
        directly responding to Clark Bros. (and similar cases) 
        by restoring employer free speech rights that had been 
        extinguished by the pre-1947 NLRB. . . .
          The Taft-Hartley legislative history is replete with 
        similar indications that Section 8(c) was a direct 
        response to repudiate the reasoning of Clark Bros. and 
        other NLRB cases. Indeed, opponents of the Taft-Hartley 
        legislation--including freshman House member John F. 
        Kennedy--agreed that Congress needed to restore the 
        employer free speech rights that the NLRB had limited 
        or ignored in pre-1947 cases.\13\
---------------------------------------------------------------------------
    \13\Protecting Employees' Rights: Ensuring Fair Election at the 
NLRB: Hearing Before the Subcomm. on Health, Emp't, Lab. & Pensions of 
the H. Comm. on Educ. & the Workforce, 118th Cong. (2023) (statement of 
Philip A. Miscimarra, Partner, Morgan Lewis, at 5-7).

    On November 4, 2022, the NLRB issued a proposed rule titled 
``Representation-Case Procedures: Election Bars; Proof of 
Majority Support in Construction Industry Collective-Bargaining 
Relationships,''\14\ which would rescind the Board's 2020 
election protection rule.\15\ The proposed rule seeks to 
reimpose arbitrary, Board-created rules that limit access to 
secret ballot elections and impede employees' rights under the 
NLRA to choose whether or not to form or join a union. The 
proposed rule flips the NLRA on its head by empowering unions 
to entrench themselves as employee representatives regardless 
of worker preference. A repeal of the NLRB's 2020 election 
protection rule would permit labor unions to file blocking 
charges that delay holding decertification representation 
elections indefinitely and limit workers' ability to exercise 
their statutory right to petition for a secret-ballot 
election.\16\ Such a policy would stifle employee free choice 
and undermine the ability of workers' to refrain from union 
activity, which is a right enshrined in Section 7 of the NLRA.
---------------------------------------------------------------------------
    \14\Representation-Case Procedures: Election Bars; Proof of 
Majority Support in Construction Industry Collective-Bargaining 
Relationships, 87 Fed. Reg. 66,890 (proposed Nov. 4, 2022).
    \15\Representation-Case Procedures: Election Bars; Proof of 
Majority Support in Construction Industry Collective-Bargaining 
Relationships, 85 Fed. Reg. 18,366 (Apr. 1, 2020).
    \16\ https://edworkforce.house.gov/uploadedfiles/
02.2.23_nlrb_election_rule_comment_letter.pdf.
---------------------------------------------------------------------------
    The Board has also taken aim at employees' right to vote by 
secret ballot in union representation elections, despite the 
agency's own longstanding policy that ``representation 
elections should, as a generally rule, be conducted 
manually.''\17\ On August 25, 2023, the NLRB issued a decision 
in the Cemex Construction Materials Pacific case limiting the 
right of employees to vote in secret ballot elections, imposing 
mandatory union recognition, and creating a new framework in 
union representation proceedings that undermines employee free 
choice.\18\ Cemex eliminates any requirement for unions to file 
NLRB election petitions and allows a union to demand 
recognition from employers based on a claim of majority 
support, which the Board does not need to verify. Under the new 
framework, if a union makes a claim of majority support, then 
the employer must immediately grant recognition without any 
NLRB election or promptly file its own NLRB petition seeking an 
election. If the employer fails to take either step, then the 
NLRB will order mandatory union recognition. In cases where an 
employer files a petition for an election, any unlawful conduct 
by the employer during the election proceeding will require the 
NLRB to set aside the election and issue a mandatory bargaining 
order requiring union recognition.
---------------------------------------------------------------------------
    \17\https://www.nlrb.gov/sites/default/files/attachments/pages/
node-174/chm-part-ii-rep2019
published-9-17-20.pdf.
    \18\Cemex Construction Materials Pacific, LLC, 372 NLRB No. 130 
(2023).
---------------------------------------------------------------------------
    The U.S. Supreme Court and numerous U.S. circuit courts of 
appeals have held that alternative forms of certifying union 
representatives are inferior to onsite secret ballot elections 
and subject to abuses. The U.S. Supreme Court has stated that 
card check is ``admittedly inferior to the election process'' 
and has noted that ``[w]e would be closing our eyes to obvious 
difficulties if we did not recognize that there have been 
abuses, primarily arising out of misrepresentations by union 
organizers.''\19\ The U.S. Court of Appeals for the Second 
Circuit stated that ``it is beyond dispute that secret election 
is a more accurate reflection of the employees' true desires 
than a check of authorization cards collected at the behest of 
a union organizer.''\20\
---------------------------------------------------------------------------
    \19\NLRB v. Gissel Packing Co., 395 U.S. 575, 603 (1969).
    \20\NLRB v. Flomatic Corp., 347 F.2d 74, 78 (2d Cir. 1965).
---------------------------------------------------------------------------
    On October 27, 2023, the NLRB issued a final rule 
establishing a new standard for determining joint-employer 
status under the NLRA,\21\ largely reviving the Obama NLRB's 
joint employer standard from the 2015 decision in the Browning-
Ferris case.\22\ Under the new rule, a joint employer 
relationship is established when employers share and 
codetermine, whether directly or indirectly, employees' 
essential terms and conditions of employment. The Board may 
also determine that joint employer status exists when two or 
more employers exercise or possess the power to control, 
whether directly or indirectly, employees' essential terms and 
conditions of employment. Under this standard, what is 
considered an essential term and condition of employment is 
greatly expanded.
---------------------------------------------------------------------------
    \21\ 1AStandard for Determining Joint-Employer Status, 88 Fed. Reg. 
53,946 (Oct. 27, 2023).
    \22\Browning-Ferris Industries of California, Inc., 362 NLRB No. 
186 (2015).
---------------------------------------------------------------------------
    Such a broad and vague joint employer standard will result 
in damaging consequences for small businesses and workers. 
Analysis of the Browning-Ferris decision found it significantly 
harmed the franchise industry and others. For example, one 
study found the decision cost the ``franchising sector as much 
as $33.3 billion annually and has resulted in as many as 
376,000 lost job opportunities.''\23\ The losses for small 
franchisees were significant, with the average franchisee 
experiencing an annual revenue loss of $142,000 per year.\24\ 
Other research found that the ``new joint employer standard 
could result in 1.7 million fewer jobs in the entire private 
sector and 500,000 fewer jobs in the leisure and hospitality 
industry alone.''\25\
---------------------------------------------------------------------------
    \23\Ronald Bird, Statement Regarding the Economic Impact of the 
Prospective NLRB Public Policy Decision Regarding the Definition of 
Joint Employer 2 (Jan. 28, 2019), https://www.franchise.org/sites/
default/files/2019-05/JE %20Econ%20Impact%200128.pdf.
    \24\Id.
    \25\https://www.americanactionforum.org/research/nlrbs-new-joint-
employer-standard-unions-franchise-business-model/.
---------------------------------------------------------------------------
    President Biden, as well as the Board majority and GC, 
justify their radical pro-union policies by incorrectly 
claiming that the ``policy of the federal government has been 
to encourage worker organizing and collective bargaining.''\26\ 
The legislative history of the NLRA makes clear that that is 
not the case. The author of the NLRA, then-Sen. Robert Wagner 
(D-NY), said his legislation was meant to balance the right of 
employees to collectively bargain while ensuring that workers 
are not coerced to join unions against their will. At a Senate 
hearing in 1934, Sen. Wagner stated, ``That is all that this 
bill does, so far as I can see. It leaves the worker a free man 
to organize or not to organize as he chooses.''\27\
---------------------------------------------------------------------------
    \26\https://www.whitehouse.gov/briefing-room/statements-releases/
2021/04/26/fact-sheet-executive-order-establishing-the-white-house-
task-force-on-workerorganizing-and-empowerment/.
    \27\NLRB, Legislative History of the National Labor Relations Act, 
1935, vol. 1, at 505 (quoting Sen. Wagner).
---------------------------------------------------------------------------
    The Biden NLRB's decisions and rulemakings thwart 
congressional intent and are contrary to the purpose of NLRA by 
tilting labor law in favor of unions in ways that limit 
employees' right to refrain from any and all union activity. 
H.R. 3400 would ensure that more small businesses are not 
unduly burdened by the Board's radical policies.

Regulations' impact on small business

    To ensure a thriving economy, it is critical to create 
economic conditions that support the formation and existence of 
small businesses. Nearly all businesses--99.9 percent--in 
America are considered small businesses, and they employ 46.4 
percent of the private sector employees.\28\ From 1995 to 2021, 
a majority (62.7 percent) of net new jobs were created by small 
businesses.\29\
---------------------------------------------------------------------------
    \28\https://advocacy.sba.gov/2023/03/07/frequently-asked-questions-
about-small-business-2023/
#::text=Most%20businesses%20are%20small%2D%2099.9,46.4%25%20of%20privat
e%20sector %20employees.
    \29\https://advocacy.sba.gov/2023/03/07/frequently-asked-questions-
about-small-business-2023/
#::text=Most%20businesses%20are%20small%2D%2099.9,46.4%25%20of%20privat
e%20sector %20employees.
---------------------------------------------------------------------------
    It is well understood that the impact of regulation imposes 
an outsized effect on small businesses compared to larger ones. 
However, the Biden administration has done little to relieve 
small businesses of regulatory burdens. Since taking office, 
the federal government has finalized 756 rules that cost $437.2 
billion and imposed over 200 million paperwork burden hours on 
the American public.\30\ A recent analysis finds the Biden 
administration is imposing new regulatory costs at a faster 
rate than the Obama administration.\31\
---------------------------------------------------------------------------
    \30\https://regrodeo.com/
?year%5B0%5D=&year%5B1%5D=2023&year%5B2%5D=2022&year%
5B3%5D=2021.
    \31\https://committeetounleashprosperity.com/wp-content/uploads/
2023/06/CTUP_BurdenisBack_ComparingRegulatoryCosts.pdf.
---------------------------------------------------------------------------
    While the Biden administration has paid lip service to 
gaining a better understanding of the distributional 
consequences of regulations,\32\ federal agencies frequently 
disregard laws requiring them to analyze the impact of 
regulation on small businesses.\33\ This is a travesty because 
the distribution of regulatory burdens falls most harshly on 
the shoulders of small businesses.
---------------------------------------------------------------------------
    \32\https://www.federalregister.gov/documents/2021/01/26/2021-
01866/modernizing-regulatory-review.
    \33\https://strgnfibcom.blob.core.windows.net/nfibcom/NFIB-RFA-
White-paper.pdf.
---------------------------------------------------------------------------
    Research in this area finds that businesses employing fewer 
than ``20 employees face an annual regulatory burden of $6,975 
per employee, a burden nearly 60 percent above that facing a 
firm employing over 500 employees.\34\ For businesses with 50 
or fewer employees, the costs of regulation are nearly 20 
percent higher than the average for all businesses.\35\
---------------------------------------------------------------------------
    \34\https://webarchive.library.unt.edu/eot2008/20090118012955/
http://www.sba.gov/advo/
research/rs207tot.pdf.
    \35\https://www.uschamber.com/assets/documents/
230622_Testimony_RegulatoryFlexibilityAct
Report_HouseSmallB usiness.pdf.
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    Regulations represent a fixed cost for employers that 
require expenditures or investments. Smaller businesses, which 
bring in less revenue and produce lower output, have a harder 
time absorbing regulatory costs compared to larger firms. 
Smaller entities are also less likely to employ in-house 
counsel or human resource officers to navigate and comply with 
the never-ending flow of federal regulations.
    New analysis also shows regulations reduce economic growth. 
A 2020 study estimated that ``regulatory restrictions have had 
a net effect of dampening economic growth by approximately 0.8 
percent per annum since 1980. Had regulation been held constant 
at levels observed in 1980, our model predicts that the economy 
would have been nearly 25 percent larger by 2012.''\36\ This is 
an unsurprising finding because small businesses make up the 
vast majority of businesses and job growth in America, and they 
also incur a more significant burden of the costs from 
regulations.
---------------------------------------------------------------------------
    \36\https://doi.org/10.1016/j.red.2020.03.004.
---------------------------------------------------------------------------
    Given the vast amount of research confirming the hardships 
imposed on small businesses by regulations, it is imperative 
for administrative agencies to consider the impact of 
regulations on small entities and promulgate policies that 
impose as few burdens on small businesses as possible. H.R. 
3400 improves the landscape for small businesses by raising the 
NLRB's monetary thresholds so they are shielded from the 
Board's extreme pro-union agenda.

Conclusion

    Small businesses and American families are struggling to 
make ends meet. Instead of understanding the hardship facing 
Americans, the Biden administration is actively making life 
more difficult by pursuing a radical regulatory agenda that 
increases costs and burdens. H.R. 3400 provides much needed 
relief for small businesses from the radical NLRB pro-union 
agenda amist the broader regulatory onslaught of the federal 
government.

                                Summary


                  H.R. 3400 SECTION-BY-SECTION SUMMARY

    The following is a section-by-section analysis of the Small 
Businesses before Bureaucrats Act reported favorably by the 
Committee.
    Section 1 provides that the short title is the ``Small 
Businesses before Bureaucrats Act.''
    Section 2 amends the NLRA to establish new monetary 
jurisdictional standards for categories of employers for the 
purposes of the Board declining jurisdiction over certain labor 
disputes. The thresholds are increased by a multiple of 10 in 
calendar year 2024 and increased in subsequent years by a 
formula established by the bill. This formula is based on an 
index called the ``Personal Consumption Expenditure Per Capita 
Index,'' which section 2 of H.R. 3400 requires the Department 
of Commerce's Bureau of Economic Analysis to publish.

                       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. H.R. 3400 provides small businesses in various 
industries relief from the NLRB's continual flip-flopping of 
precedent, radical pro-union activism, and burdensome 
regulations so H.R. 3400 does not apply to the Legislative 
Branch.

                       Unfunded Mandate Statement

    Pursuant to Section 423 of the Congressional Budget and 
Impoundment Control Act of 1974, Pub. L. No. 93-344 (as amended 
by Section 101(a)(2) of the Unfunded Mandates Reform Act of 
1995, Pub. L. No. 104-4), the Committee traditionally adopts as 
its own the cost estimate prepared by the Director of the 
Congressional Budget Office (CBO) pursuant to section 402 of 
the Congressional Budget and Impoundment Control Act of 1974. 
The Committee reports that because this cost estimate was not 
timely submitted to the Committee before the filing of this 
report, the Committee is not in a position to make a cost 
estimate for H.R. 3400, as amended.

                           Earmark Statement

    H.R. 3400 does not contain any congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9 of House rule XXI.

                            Roll Call 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.


         Statement of General Performance Goals and Objectives

    In accordance with clause (3)(c) of House rule XIII, the 
goal of H.R. 3400, the Small Businesses before Bureaucrats Act, 
is to provide certain small businesses with relief from some of 
the NLRB's adjudicatory and regulatory burdens.

                    Duplication of Federal Programs

    No provision of H.R. 3400 establishes or reauthorizes a 
program of the Federal Government known to be duplicative of 
another Federal program, a program that was included in any 
report from the Government Accountability Office to Congress 
pursuant to section 21 of Public Law 111-139, or a program 
related to a program identified in the most recent Catalog of 
Federal Domestic Assistance.

  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.

                       Required Committee Hearing

    In compliance with clause 3(c)(6) of rule XIII the 
following hearing held during the 118th Congress was used to 
develop or consider H.R. 3400: on May 23, 2023, the 
Subcommittee on Health, Employment, Labor, and Pensions held a 
hearing titled ``Protecting Employees' Rights: Ensuring Fair 
Elections at the NLRB.''

               New Budget Authority and CBO Cost Estimate

    With respect to the requirements of clause 3(c)(2) of rule 
XIII of the Rules of the House of Representatives and section 
308(a) of the Congressional Budget Act of 1974 and with respect 
to requirements of clause 3(c)(3) of rule XIII of the Rules of 
the House of Representatives and section 402 of the 
Congressional Budget Act of 1974, the Committee has requested 
but not received a cost estimate for the bill from the 
Congressional Budget Office. The Chairwoman of the Committee 
shall cause such estimate to be printed in the Congressional 
Record upon its receipt by the Committee.

                        Committee Cost Estimate

    Clause 3(d)(1) of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison of the 
costs that would be incurred in carrying out H.R. 3400. 
However, clause 3(d)(2)(B) of that rule provides that this 
requirement does not apply when, as with the present report, 
the Committee has requested a cost estimate for the bill from 
the Director of the Congressional Budget Office.

         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 (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italics, and existing law in which no 
change is proposed is shown in roman):

                      NATIONAL LABOR RELATIONS ACT




           *       *       *       *       *       *       *
  Sec. 14. (a) Nothing herein shall prohibit any individual 
employed as a supervisor from becoming or remaining a member of 
a labor organization, but no employer subject to this Act shall 
be compelled to deem individuals defined herein as supervisors 
as employees for the purpose of any law, either national or 
local, relating to collective bargaining.
  (b) Nothing in this Act shall be construed as authorizing the 
execution or application of agreements requiring membership in 
a labor organization as a condition of employment in any State 
or Territory in which such execution or application is 
prohibited by State or Territorial law.
  (c)(1) The Board, in its discretion, may, by rule of decision 
or by published rules abopted pursuant to the Administrative 
Procedure Act, decline to assert jurisdiction over any labor 
dispute involving any class or category of employers, where, in 
the opinion of the Board, the effect of such labor dispute on 
commerce is not sufficiently substantial to warrant the 
exercise of its jurisdiction: Provided, That the Board shall 
not decline to assert jurisdiction over any labor dispute over 
which it would assert jurisdiction under the standards 
prevailing upon August 1, 1959.
  (2) In establishing by rule any dollar threshold with respect 
to a class or category of employers for the purposes of 
declining to assert jurisdiction over certain labor disputes 
involving such class or category of employers, the Board shall 
establish such dollar threshold at an amount--
          (A) for calendar year 2024, equal to the product of--
                  (i) the dollar threshold applicable to such 
                class or category as of the day prior to the 
                date of enactment of this paragraph, multiplied 
                by
                  (ii) ten; and
          (B) for any calendar year after 2024, equal to the 
        product of--
                  (i) the dollar threshold applicable to such 
                class or category for calendar year 2024 (after 
                the date of enactment of this paragraph), 
                multiplied by
                  (ii) the quotient obtained by dividing--
                          (I) the Personal Consumption 
                        Expenditure Per Capita Index (as 
                        published by the Bureau of Economic 
                        Analysis) for such calendar year after 
                        2024; by
                          (II) the Personal Consumption 
                        Expenditure Per Capita Index for 
                        calendar year 2024.
  [(2)] (3) Nothing in this Act shall be deemed to prevent or 
bar any agency or the courts of any State or Territory 
(including the Commonwealth of Puerto Rico, Guam, and the 
Virgin Islands), from assuming and asserting jurisdiction over 
labor disputes over which the Board declines, pursuant to 
paragraph (1) of this subsection, to assert jurisdiction.

           *       *       *       *       *       *       *


                             MINORITY VIEWS

                              INTRODUCTION

    H.R. 3400, the Small Business before Bureaucrats Act, 
amends the National Labor Relations Board's (NLRB's) 
jurisdictional standards so that fewer businesses would be 
covered by the National Labor Relations Act (NLRA) and thus 
fewer workers would be covered by the law's protections. The 
extreme bill reflects Committee Republicans' commitment to 
undermining Americans' rights to join a union and bargain 
collectively for higher pay, better benefits, and safer 
workplaces. H.R. 3400 garnered bipartisan opposition when the 
Committee on Education and the Workforce marked it up on 
December 12, 2023.

         SURGE IN WORKER ORGANIZING AND LABOR UNION POPULARITY

    At a time when workers are organizing across the country 
and labor unions are popular, Committee Republicans regrettably 
opted to advance H.R. 3400.
    The NLRB recently reported a 3 percent increase in election 
petitions for union representation for Fiscal Year (FY) 2023 
compared to the year before, and the highest number of 
petitions since FY 2015.\1\ This uptick builds upon the 
dramatic increase seen in FY 2022 where the agency recorded a 
53 percent increase in petitions over FY 2021.\2\ In the first 
six months of 2023, unions won 80 percent of representation 
elections--the highest number of victories in the first half of 
a year since 2013.\3\ In addition to the rise in worker 
organizing, public support for labor unions remains strong at 
67 percent approval.\4\
---------------------------------------------------------------------------
    \1\Press release, NLRB Off. of Pub. Affrs., Unfair Labor Practices 
Charge Filings Up 10%, Union Petitions Up 3% in Fiscal Year 2023 (Oct. 
13, 2023), https://www.nlrb.gov/news-outreach/news-story/unfair-labor-
practices-charge-filings-up-10-union-petitions-up-3-in-fiscal.
    \2\Id.
    \3\NLRB Election Statistics Mid-Year 2023, Bloom. Law 1 (Aug. 
2023), https://aboutblaw.com/9Wb. (Between January 2023 and June 2023, 
unions won 662 out of 827 representation elections.)
    \4\Lydia Saad, More in U.S. See Unions Strengthening and Want It 
That Way, GALLUP (Aug. 30, 2023), https://news.gallup.com/poll/510281/
unions-strengthening.aspx.
---------------------------------------------------------------------------
    In addition to the rise in organizing, there has been a 
noticeable shift for unions at the bargaining table in 2023. 
Union workers have successfully negotiated significant wage 
increases, improved benefits, and safer working conditions, 
among other gains. Some examples include:
           Teamsters/UPS: On August 22, 2023, members 
        of the International Brotherhood of Teamsters voted to 
        ratify a new five-year national contract--covering over 
        340,000 workers--with the United Parcel Service 
        (UPS).\5\ The contract includes wage increases for 
        existing full- and part-time workers that total to 
        $7.50 per hour over the life of the contract (resulting 
        in an average top wage of $49 an hour for full-timers), 
        a minimum hourly wage of $21 for part-timers, an end to 
        the two-tier wage scheme and forced overtime for UPS 
        drivers, and air conditioning for new purchased 
        vehicles.
---------------------------------------------------------------------------
    \5\Press release, IBT, Teamsters Ratify Historic UPS Contact (Aug. 
22, 2023), https://teamster.org/2023/08/teamsters-ratify-historic-ups-
contract/#::text=Five%2DYear%20National%20 
Agreement%20Passes%20Overwhelmingly%2C%20One%20Supplement%20to%20Be%20 
Renegotiated&text(WASHINGTON)%20%E2%80%93%20Today%2C%20Teamsters,in%20th
e%20 history%20of%20UPS.
---------------------------------------------------------------------------
           Graduate Students/MIT: On September 22, 
        2023, graduate student workers at the Massachusetts 
        Institute of Technology, affiliated with the United 
        Electrical, Radio and Machine Workers (UE), ratified 
        their first contract with the university's 
        administration.\6\ The graduate workers secured third-
        party arbitration for harassment complaints, dental 
        insurance, approximately 12 percent wage increases, 
        $10,000 childcare grant based on need, and a 70 percent 
        public transportation subsidy.
---------------------------------------------------------------------------
    \6\Press Release, UE, MIT Graduate Workers' First UE Contract Sets 
New Standards (Oct. 6, 2023), https://www.ueunion.org/ue-news/2023/mit-
graduate-workers-first-ue-contract-sets-new-standards.
---------------------------------------------------------------------------
           WGA/AMPTP: On October 9, 2023, the Writers 
        Guild of America (WGA) announced the ratification of 
        its new three-year contract with the Alliance of Motion 
        Picture and Television Producers (AMPTP).\7\ The 
        Minimum Basic Agreement includes increases to weekly 
        rates, residual payments, viewership-based bonuses from 
        streaming services, protections against AI infringing 
        on writers' credits and compensation and rewriting 
        original material, as well as staffing and employment 
        length minimums.
---------------------------------------------------------------------------
    \7\Summary of the 2023 WGA MBA, WGA, https://
www.wgacontract2023.org/the-campaign/summary-of-the-2023-wga-mba (last 
visited Nov. 20, 2023).
---------------------------------------------------------------------------
           Kaiser Permanente: On November 9, 2023, the 
        Coalition of Kaiser Permanente Unions--representing 
        more than 85,000 health care workers--ratified its 
        four-year contract with Kaiser Permanente.\8\ Across 
        the board, workers will see a 21 percent pay increase 
        over four years with minimum wages of $25 per hour in 
        California and $23 at facilities in other states after 
        three years. The contract also commits the company to 
        improving staffing through investments in job training 
        programs, referral bonuses, and widespread job fairs.
---------------------------------------------------------------------------
    \8\Bhanvi Satija & Leroy Leo, Kaiser healthcare workers ratify new 
contract, Reuters (Nov. 9, 2023), https://www.reuters.com/business/
healthcare-pharmaceuticals/kaiser-healthcare-workers-ratify-new-
contract-2023-11-09/.
---------------------------------------------------------------------------
           UAW/Big Three: On November 20, 2023, the 
        United Auto Workers (UAW) announced that their members 
        at Ford, General Motors, and Stellantis (Big Three) had 
        voted to ratify their respective contracts with the 
        automakers.\9\ The contracts, covering 150,000 workers, 
        include over a 10 percent immediate raise, a 25 percent 
        wage increase for top-earning workers and up to a 160 
        percent increase for low-earning workers over the 
        contract term, the right to strike over plant closures, 
        the reopening of Stellantis's Belvidere, IL facility, 
        more paid time off, boosts to employer contributions to 
        10 percent for 401(k) accounts, an increase to the 
        pension multiplier for pre-2007 hires, and annual 
        bonuses for current retirees.
---------------------------------------------------------------------------
    \9\Jeanne Whalen, UAW members ratify record contracts with Big 3 
automakers, The Wash. Post (Nov. 20, 2023), https://
www.washingtonpost.com/business/2023/11/20/uaw-contract-ford-general-
motors-stellantis/.
---------------------------------------------------------------------------
    The above-cited contract victories are a snapshot of the 
labor movement's recent achievements. In the first nine months 
of 2023, unions have secured workers an average 6.6 percent 
first-year raise (not including lump-sum payments), the highest 
wage increase secured in union contracts in over 30 years.\10\ 
Almost 900,000 union workers have won immediate pay raises of 
10 percent or more in 2023.\11\
---------------------------------------------------------------------------
    \10\Josh Eidelson et al., Unions Are Winning Big for the First Time 
in Decades, Bloomberg (Oct. 31, 2023), https://www.bloomberg.com/news/
articles/2023-10-31/uaw-strike-ups-drivers-writers-union-mark-record-
wins-for-us-labor-movement#xj4y7vzkg.
    \11\Chris Isidore, Unions are the strongest in decades. Nearly a 
million Americans got double-digit raises as a result, CNN (Nov. 21, 
2023), https://www.cnn.com/2023/11/21/business/big-paydays-union-
members/
index.html#::text=Nearly%20a%20million%20Americans%20got%20double
%2Ddigit%20raises%20as%20a%20result,By%20Chris%20Isidore&textNearly%2090
0%2C000
%20 Americans%20sitting%20down,increases 
%20they%20won%20%E2%80%93%20to%20thank.
---------------------------------------------------------------------------

       BACKGROUND ON NLRB'S JURISDICTIONAL STANDARDS & H.R. 3400

    The NLRB does not have jurisdiction over all employers. 
According to the Congressional Research Service (CRS), the NLRB 
has established standards that an employer must meet before the 
board asserts jurisdiction over a question of union 
representation.\12\ These jurisdictional standards are 
generally based on an employer's annual sales or gross 
revenue.\13\ For example, a retail business must have sales of 
at least $500,000 annually.\14\ A nonretail business ``must 
have either $50,000 in annual direct or indirect sales to 
buyers in other states or make $50,000 in direct or indirect 
purchases from sellers in other states.''\15\ These standards 
have been in effect since August 1, 1959.\16\
---------------------------------------------------------------------------
    \12\Cong. Rsch. Serv., RL32930, The National Labor Relations Act 
(NLRA): Union Representation Procedures and Dispute Resolution (2013), 
https://crsreports.congress.gov/product/pdf/RL/RL32930/37.
    \13\Id.
    \14\Id.
    \15\Id.
    \16\Id.
---------------------------------------------------------------------------
    Specifically, HR 3400 increases the NLRB's dollar volume 
thresholds for determining whether it will assert jurisdiction 
at first by a factor of ten and then annually using a formula 
involving the Department of Commerce's Personal Consumption 
Expenditure Per Capita Index.\17\ For example, retailers that 
do annual business of less than $500,000 per year are not 
currently subject to the NLRB's jurisdiction pursuant to the 
Board's current jurisdictional standard. This bill would 
multiply that $500,000 threshold by ten, so that retailers that 
do less than $5 million in annual business will not be covered. 
According to the bill's author, Rep. Bob Good (R-VA), ``upon 
implementation of this bill, more than 50 [percent] of retail 
and non-retail businesses will be exempt and relieved from NLRB 
jurisdiction.''\18\
---------------------------------------------------------------------------
    \17\According to the Department of Commerce, the Personal 
Consumption Expenditure Per Capital Index is a measure of the prices 
that people living in the United States pay for goods and services and 
is known for capturing inflation or deflation across a wide range of 
consumer expenses.
    \18\Press Release, Office of Congr. Bob Good, (May 12, 2022), 
http://good.house.gov/media/press-releases/rep-good-introducessmall-
businesses-bureaucrats-act.
---------------------------------------------------------------------------

                H.R. 3400'S POTENTIAL HARM TO EMPLOYERS

    It is not only workers who will be negatively impacted by 
H.R. 3400, but employers also could be harmed as well. 
Committee Democrats were initially advised by Committee 
Republicans that H.R. 3400 would be discussed as part of a 
Subcommittee on Health, Employment, Labor, and Pensions (HELP) 
legislative hearing on December 13, 2023. However, Committee 
Republicans abruptly changed course, opted to bypass a 
legislative hearing on H.R. 3400, and instead markup the bill 
on December 12, 2023. Before that was known to Committee 
Democrats, the Democratic witness for the HELP Subcommittee 
hearing, Mr. Richard Griffin, drafted his written testimony. In 
it, Mr. Griffin pointed out that, if H.R. 3400 became law, a 
``substantial number of businesses would not be regulated by 
the uniform federal statute governing private sector labor 
relations, and thus would be subject to all kinds of union 
organizing activity that the NLRA currently limits--there would 
be no limits on recognitional picketing or secondary boycotts 
for example.''\19\ Mr. Griffin also noted that ``[S]tates may 
well rush in to fill this regulatory void, since there would be 
no federal preemption of their legislative activity as to those 
businesses exempt from the NLRA's reach, and businesses would 
be subject to a patchwork quilt of various state regulatory 
measures.''\20\ Had Committee Republicans not hastily bypassed 
a legislative hearing on H.R. 3400, Mr. Griffin's points on the 
bill's implications for employers could have been more fully 
explored. Regrettably, that did not occur.
---------------------------------------------------------------------------
    \19\Statement of Richard F. Griffin, Bredhoff & Kaiser, P.L.L.C., 
Protecting Workers and Small Businesses from Biden's Attack on Worker 
Free Choice and Economic Growth: Hearing Before the H. Subcomm. on 
Health, Emp't., Lab. & Pensions of the H. Comm. on Educ. & the Wrkf., 
118th Cong. (2023), at 16.
    \20\Id.
---------------------------------------------------------------------------

                               CONCLUSION

    For the reasons stated above, Committee Democrats, and one 
Committee Republican, opposed H.R. 3400 when the Committee on 
Education and the Workforce considered it on December 12, 2023. 
We urge the House of Representatives to do the same.

                                   Robert C. ``Bobby'' Scott,
                                           Ranking Member.
                                   Joe Courtney,
                                   Gregorio Kilili Camacho Sablan,
                                   Mark DeSaulnier,
                                   Pramila Jayapal,
                                           Members of Congress.