[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).
---------------------------------------------------------------------------
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.
---------------------------------------------------------------------------
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.