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WHAT SHOULD WORKERS AND EMPLOYERS 

EXPECT NEXT FROM THE NATIONAL 

LABOR RELATIONS BOARD? 

HEARING 

BEFORE THE

SUBCOMMITTEE ON HEALTH, 

EMPLOYMENT, LABOR, AND PENSIONS 

COMMITTEE ON EDUCATION 

AND THE WORKFORCE 

U.S. HOUSE OF REPRESENTATIVES

ONE HUNDRED THIRTEENTH CONGRESS 

SECOND SESSION 

HEARING HELD IN WASHINGTON, DC, JUNE 24, 2014 

Serial No. 113–60 

Printed for the use of the Committee on Education and the Workforce 

( 

Available via the World Wide Web: 

www.gpo.gov/fdsys/browse/committee.action?chamber=house&committee=education 

or 

Committee address: http://edworkforce.house.gov 

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(II) 

COMMITTEE ON EDUCATION AND THE WORKFORCE 

JOHN KLINE, Minnesota, Chairman 

Thomas E. Petri, Wisconsin 

Howard P. ‘‘Buck’’ McKeon, California 

Joe Wilson, South Carolina 

Virginia Foxx, North Carolina 

Tom Price, Georgia 

Kenny Marchant, Texas 

Duncan Hunter, California 

David P. Roe, Tennessee 

Glenn Thompson, Pennsylvania 

Tim Walberg, Michigan 

Matt Salmon, Arizona 

Brett Guthrie, Kentucky 

Scott DesJarlais, Tennessee 

Todd Rokita, Indiana 

Larry Bucshon, Indiana 

Lou Barletta, Pennsylvania 

Joseph J. Heck, Nevada 

Mike Kelly, Pennsylvania 

Susan W. Brooks, Indiana 

Richard Hudson, North Carolina 

Luke Messer, Indiana 

Bradley Byrne, Alabama 

George Miller, California, 

Senior Democratic Member 

Robert C. ‘‘Bobby’’ Scott, Virginia 

Rube ́n Hinojosa, Texas 

Carolyn McCarthy, New York 

John F. Tierney, Massachusetts 

Rush Holt, New Jersey 

Susan A. Davis, California 

Rau ́l M. Grijalva, Arizona 

Timothy H. Bishop, New York 

David Loebsack, Iowa 

Joe Courtney, Connecticut 

Marcia L. Fudge, Ohio 

Jared Polis, Colorado 

Gregorio Kilili Camacho Sablan, 

Northern Mariana Islands 

Frederica S. Wilson, Florida 

Suzanne Bonamici, Oregon 

Mark Pocan, Wisconsin 

Mark Takano, California 

Juliane Sullivan, Staff Director 

Megan O’Reilly, Minority Staff Director 

SUBCOMMITTEE ON HEALTH, EMPLOYMENT, LABOR, AND PENSIONS 

DAVID P. ROE, Tennessee, Chairman 

Joe Wilson, South Carolina 

Tom Price, Georgia 

Kenny Marchant, Texas 

Matt Salmon, Arizona 

Brett Guthrie, Kentucky 

Scott DesJarlais, Tennessee 

Larry Bucshon, Indiana 

Lou Barletta, Pennsylvania 

Joseph J. Heck, Nevada 

Mike Kelly, Pennsylvania 

Susan W. Brooks, Indiana 

Luke Messer, Indiana 

Bradley Byrne, Alabama 

John F. Tierney, Massachusetts, 

Ranking Member 

Rush Holt, New Jersey 

Mark Pocan, Wisconsin 

Robert C. ‘‘Bobby’’ Scott, Virginia 

Rube ́n Hinojosa, Texas 

David Loebsack, Iowa 

Joe Courtney, Connecticut 

Jared Polis, Colorado 

Gregorio Kilili Camacho Sablan, 

Northern Mariana Islands 

Frederica S. Wilson, Florida 

Suzanne Bonamici, Oregon 

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(III) 

C O N T E N T S 

Page 

Hearing held on June 24, 2014 ............................................................................... 1 

Statement of Members: 

Roe, Hon. David P., Chairman, Subcommittee on Health, Employment, 

Labor, and Pensions ..................................................................................... 1 

Prepared statement of ............................................................................... 3 

Tierney, Hon. John F., a Representative in Congress from the State 

of Massachusetts ........................................................................................... 4 

Prepared statement of ............................................................................... 6 

Statement of Witnesses: 

Borden, Seth, H., Partner, McKenna Long & Aldridge LLP, New York, 

New York, ...................................................................................................... 22 

Prepared statement of ............................................................................... 24 

Coppess, James, Associate General Counsel, AFL-CIO, Washington, DC .. 35 

Prepared statement of ............................................................................... 37 

King, G. Roger, of Counsel, Jones Day, Columbus, Ohio .............................. 48 

Prepared statement of ............................................................................... 50 

Puzder, Andrew, F., CEO, CKE Restaurants, Carpinteria, California ........ 7 

Prepared statement of ............................................................................... 10 

Additional Submissions: 

Mr. Tierney: 

Prepared statement of United Steelworkers ........................................... 92 

Letter dated October 23, 2011, from Employee Organizing Committee 

of Speciality Healthcare & Rehabilitation Center, Mobile, Alabama 97 

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WHAT SHOULD WORKERS AND EMPLOYERS 

EXPECT NEXT 

FROM THE NATIONAL LABOR RELATIONS 

BOARD? 

Tuesday, June 24, 2014 

House of Representatives, 

Subcommittee on Health, Employment, Labor, & 

Pensions, Committee on Education and the 

Workforce, 

Washington, D.C. 

The subcommittee met, pursuant to call, at 10:07 a.m., in Room 

2175, Rayburn House Office Building, Hon. Phil Roe [chairman of 

the subcommittee] presiding. 

Present: Representatives Roe, Wilson, Guthrie, Bucshon, Kelly, 

Brooks, Messer, Byrne, Tierney, Holt, Pocan, Scott, Courtney, and 

Bonamici. 

Also present: Chairman Kline. 

Staff present: Janelle Belland, Coalitions and Members Services 

Coordinator; Ed Gilroy, Director of Workforce Policy; Benjamin 

Hoog, Senior Legislative Assistant; Marvin Kaplan, Workforce Policy Counsel; Nancy Locke, Chief Clerk; James Martin, Professional 

Staff Member; Zachary McHenry, Senior Staff Assistant; Daniel 

Murner, Press Assistant; Brian Newell, Communications Director; 

Krisann Pearce, General Counsel; Alissa Strawcutter, Deputy 

Clerk; Juliane Sullivan, Staff Director; Tylease Alli, Minority 

Clerk/Intern and Fellow Coordinator; Melissa Greenberg, Minority 

Labor Policy Associate; Eunice Ikene, Minority Labor Policy Associate; Brian Kennedy, Minority General Counsel; Julia Krahe, Minority Communications Director; Leticia Mederos, Minority Director of Labor Policy; Richard Miller, Minority Senior Labor Policy 

Advisor; Megan O’Reilly, Minority Staff Director; Amy Peake, Minority Labor Policy Advisor; Michael Zola, Minority Deputy Staff 

Director; and Mark Zuckerman, Minority Senior Economic Advisor. 

Chairman ROE. A quorum being present, the Subcommittee on 

Health, Employment, Labor, and Pensions will come to order. 

Good morning. I would like to welcome our guests and thank our 

witnesses for joining us. We appreciate the time you have taken 

out of your busy schedules to participate in today’s hearing. 

Four years ago, the Obama Administration promised the start of 

a ‘‘recovery summer.′′ The American people were told at the time 

the nation was about to enter a period of strong growth and job 

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2 

creation. We know four years later that simply wasn’t the case. Instead of a robust recovery, the nation continued to struggle with a 

jobs crisis that is hurting working families to this day. 

It has taken five years to simply regain the jobs lost as a result 

of the recent recession, making it the slowest recovery in our nation’s history. On our current path, it will take four more years before we close what is known as the jobs gap, the number of jobs 

destroyed by the recession plus the number of jobs that we simply 

need to keep pace with population growth. Four years after the socalled ‘‘recovery summer,′′ roughly 10 million Americans are still 

searching for work, including more than three million Americans 

who have been out of a job six months or longer. 

When the focus should be on developing bipartisan solutions that 

will help put people back to work, the Obama Administration has 

spent most of its time promoting a partisan agenda at the behest 

of powerful special interests. That has certainly been the case with 

the National Labor Relations Board. 

In response to a steady decline in its membership, unions have 

increasingly relied on federal agencies to tilt the balance of power 

in their favor. The NLRB is at the center of this effort, promoting 

a culture of union favoritism that makes it virtually impossible for 

employers and workers to resist union pressure. 

Under President Obama’s watch, the board has restricted access 

to the secret ballot, advanced an ambush election rule that will stifle employer free speech and cripple worker free choice, and begun 

to bless micro-unions that will tie employers up in union red tape 

while undermining employee freedom in the workplace. The NLRB 

even went so far as to try and dictate where a private employer 

could and could not create jobs. And I could go on and on. 

Additionally, there are cases before the board right now that 

threaten to further stack the deck in favor of the administration’s 

union allies. For example, the board has requested feedback on how 

to determine joint-employer status under the National Labor Relations Act, a standard that has been in place for 30 years to determine when two employers share immediate and direct control over 

essential terms and conditions of employment, such as hiring, firing, discipline, and supervision. This isn’t a new concept, so the 

board’s recent solicitation is highly suspect and strongly suggests 

it is eager to abandon existing policies in favor of a new standard 

more favorable to union interests. 

The board may also be looking for ways to give union organizers 

greater access to employer property, most notably employers’ email systems. The board has always instructed employers that any 

policy limiting the use of work e-mail must be enforced in a nondiscriminatory way, which means employers cannot treat unions 

any differently than any other non-charitable organizations. This 

provides employers a clear standard to follow and union organizers 

a level playing field to work on. It is likely the current board majority will seek to impose a fundamentally different approach, one 

that would give union organizers practically unfettered access to 

the employers’ e-mail systems. 

On their own, these may seem like relatively minor issues. However, they are part of a larger pattern that is generating a lot of 

uncertainty, confusion, and anxiety in workplaces across this counCEWDOCROOM with DISTILLER

3 

try. Every member of this committee supports the right of workers 

to freely choose whether or not to join a union. It is ultimately a 

decision that rests with each and every individual worker. Federal 

policymakers don’t have the authority to make that choice for 

them. 

Today’s hearing is a part of the committee’s continued oversight 

of the NLRB, but more importantly, a part of our commitment to 

defend the rights of workers and employers. 

I look forward to learning more from our witnesses in our discussion later this morning. Before I conclude, I would like to take a 

moment to recognize the new senior Democratic member of the 

subcommittee, Representative John Tierney. I know he is passionate and a tireless advocate for working families. 

And John and I have taken the time to get to know each other. 

I know that a lot of times you don’t see this, but we have taken 

the opportunity to get to know each other. I have been in his office 

on an informal basis recently. He was very gracious. And even 

though we may not see eye-to-eye on a number of issues, I am confident we will find ways to disagree without being disagreeable. 

And congratulations on your appointment, Congressman Tierney. 

And with that, I recognize you for your opening statement. 

[The statement of Chairman Roe follows:] 

Prepared Statement of Hon. Phil Roe, Chairman, Subcommittee on Health, 

Employment, Labor, and Pensions 

Good morning. I’d like to welcome our guests and thank our witnesses for joining 

us. We appreciate the time you’ve taken out of your busy schedules to participate 

in today’s hearing. 

Four years ago, the Obama administration promised the start of ‘‘recovery summer.’’ The American people were told at the time the nation was about to enter a 

period of strong growth and job creation. We know four years later that simply 

wasn’t the case. Instead of a robust recovery, the nation continued to struggle with 

a jobs crisis that is hurting working families to this day. 

It has taken five years to simply regain the jobs lost as a result of the recent recession – making this the slowest recovery in our nation’s history. On the current 

path, it will take four more years before we close what’s known as the jobs gap, the 

number of jobs destroyed by the recession plus the number of jobs we need to simply 

keep pace with population growth. Four years after the so-called ‘‘recovery summer’’ 

and roughly 10 million Americans are still searching for work, including more than 

3 million Americans who have been out of a job for six months or longer. 

When the focus should be on developing bipartisan solutions that will help put 

people back to work, the Obama administration has spent most of its time promoting a partisan agenda at the behest of powerful special interests. That has certainly been the case with the National Labor Relations Board. 

In response to a steady decline in its membership, union bosses have increasingly 

relied on federal agencies to tilt the balance of power in their favor. The NLRB is 

at the center of this effort, promoting a culture of union favoritism that makes it 

virtually impossible for employers and workers to resist union pressure. 

Under President Obama’s watch, the board has restricted access to the secret ballot, advanced an ambush election rule that will stifle employer free speech and cripple worker free choice, and begun to bless micro unions that will tie employers up 

in union red tape while undermining employee freedom in the workplace. The 

NLRB even went so far as to try and dictate where a private employer could and 

could not create jobs. I could go on and on. 

Additionally, there are cases before the board right now that threaten to further 

stack the deck in favor of the administration’s union allies. For example, the board 

has requested feedback on how to determine joint-employer status under the National Labor Relations Act. A standard has been in place for 30 years to determine 

when two employers share immediate and direct control over essential terms and 

conditions of employment, such as hiring, firing, discipline, and supervision. This 

isn’t a new concept, so the board’s recent solicitation is highly suspect and strongly 

CEWDOCROOM with DISTILLER

4 

suggests it’s eager to abandon existing policies in favor of a new standard more favorable to union interests. 

The board may also be looking for ways to give union organizers greater access 

to employer property, most notably employers’ email systems. The board has always 

instructed employers that any policy limiting the use of work email must be enforced in a non-discriminatory way, which means employers cannot treat unions any 

differently than other non-charitable organizations. This provides employers a clear 

standard to follow and union organizers a level playing field to work on. It’s likely 

the current board majority will seek to impose a fundamentally different approach, 

one that would give union organizers practically unfettered access to employers’ 

email systems. 

On their own these may seem like relatively minor issues. However, they are part 

of a larger pattern that is generating a lot of uncertainty, confusion, and anxiety 

in workplaces across the country. Every member of this committee supports the 

right of workers to freely choose whether or not to join a union. It is ultimately a 

decision that rests with each and every individual worker; federal policymakers 

don’t have the authority to make that choice for them. Today’s hearing is part of 

the committee’s continued oversight of the NLRB, but more importantly, part of our 

commitment to defending the rights of workers and employers. 

I look forward to learning more from our witnesses and our discussion later this 

morning. Before I conclude, I’d like to take a moment to recognize the new senior 

Democrat member of the subcommittee, Representative John Tierney. I know he is 

passionate and tireless advocate for working families. Even though we may not see 

eye to eye on a number of issues, I am confident we will find ways to disagree without being disagreeable. Congratulations on your appointment, Congressman Tierney. With that, I will now recognize Mr. Tierney for his opening remarks. 

Mr. TIERNEY. Thank you, Chairman Roe. And, yes, this I think 

will be a good exercise in comity as we try to work through these 

problems in a way that reflects civility and deals with the issues 

themselves. 

This is the first hearing that has occurred since I was elected to 

serve as ranking member. And so I want to begin my official statement by thanking Ranking Member Miller, the full committee, and 

my Democratic colleagues for entrusting me with this capacity to 

serve. 

You know, I have had the privilege of being on this subcommittee 

for a number of years, and I do it because the jurisdiction is so important, I think, to the issues that really impact the lives of workers, employers, retirees, middle-class families everywhere, and the 

things that really matter, the things they talk about around the 

kitchen table, ensuring that all Americans get a decent job that 

pays a fair wage, access to affordable, quality health care, retire 

with dignity, and perhaps a little change in their pocket. They are 

squarely in the subcommittee’s jurisdiction, and that is what 

makes it so interesting and worth serving on. 

They are also priorities which I have fought for my career in 

Congress, and so I am honored to serve as ranking member and 

ready to take up the challenge. And I do want to thank you, Chairman Roe, for the courtesies that you and your staff have extended 

to my staff and to me. To date, we have been dealing a lot with 

the multi-employer pension crisis. I look forward to working on 

that rather complex issue as we go forward. 

Now, with respect to today’s hearing, in the past 3–1/2 years, the 

committee has held at least 16 hearings or markups on the National Labor Relations Board, and today we are doing it again. 

Now, it is my understanding that witnesses will discuss two 

cases. One is the Browning-Ferris case, where the board has asked 

for input on whether to update and modernize the joint employer 

CEWDOCROOM with DISTILLER

5 

standard. It is believed that the current standard may not reflect 

the reality of today’s workplaces, so the board apparently has 

asked for the opinion of others so that they can consider that and 

determine whether or not it needs to be updated and modernized. 

The second case, Purple Communications, deals with the right of 

employees to use e-mail to communicate regarding organizing, bargaining, or forming a union. 

In neither of these cases did the board yet come to a decision on 

whether or not to change the standards as they are currently interpreted. In fact, in one of the witnesses’ testimony, today it says, 

‘‘all indications are that workers and employees should expect 

that—is that the NLRB will decide these cases by carefully, applying established legal principles to the particular facts of each case, 

and that in so doing the board will attempt to provide legal guidance to workers and employers who encounter similar situations in 

the future.’’ 

Now, that is exactly what the board is charged with doing. The 

statute sets it up that way. So assuming that no one associated 

with this hearing would want to be perceived as attempting to chill 

the board members from actually doing their job or attempt to influence a decision that is under consideration, one has to wonder 

why we are having this hearing at all. It is a bit premature and, 

certainly, I think sort of tries to jump the gun in terms of what the 

NLRB itself may do in terms of coming to a decision on those 

issues. 

I look forward to the testimony. I trust we are going to be informed and led by the facts and not spend time undermining the 

efforts or the integrity of the board or mischaracterizing its decisions or maligning board members. That wouldn’t be fair, nor 

would it be productive. 

I want to quote the witness again who says, ‘‘There is no reason 

to think whatsoever that workers and employers would expect anything from the NLRB in deciding these cases other than a thoughtful, considered application of established principles to the particular facts of the case.’’ 

At the 16 hearings and markups, the subject of the NLRB has 

been covered pretty extensively, and I think that we ought perhaps 

wait until the board takes its action, gets all of the input that it 

wants, and with due deliberation decides. 

You know, there have been 9.4 million private-sector jobs that 

have been created since the recession, when we were losing 800,000 

jobs a month. Yet we don’t continue to create as much jobs—or as 

many jobs as we should because we failed to pass a robust transportation bill, which would create hundreds of thousands of jobs. 

We failed to deal with an anemic research-and-development aspect, 

which would create jobs. We are missing the opportunity to pass 

an energy policy that would expedite not only the creation of more 

jobs, but a policy that would move us away from the reliance on 

fossil fuels and some dangerous positions in the world. 

So I would think that any decision clarifying the law on what is 

being done in the labor relations field would be best left to the 

board that is charged with that. In the meantime, we have got a 

number of things that we could be doing. You know, we certainly 

have plenty of work to be done on modernizing all of these issues, 

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6 

and I would ask that we go through this hearing, we, say, keep it 

away, and let the board encourage the practice and procedure of 

collective bargaining and protect the exercise of workers of the full 

freedom of their association in the way the statute requires. 

Thank you, Mr. Chairman. 

[The statement of Mr. Tierney follows:] 

Prepared Statement of Hon. John F. Tierney, a Representative in Congress 

from the State of Massachusetts 

Thank you, Chairman Roe. 

This is the first hearing that’s occurred since I was elected to serve as Ranking 

Member of this Subcommittee – so, before beginning my official statement, I want 

to first thank Ranking Member Miller and my Democratic Committee colleagues for 

the support and confidence they’ve placed in me to serve in this capacity. 

I have had the privilege of serving on this Subcommittee for many years, and I 

do so because its jurisdiction is so important and impacts the lives of so many workers, employers, retirees, and middle-class families. 

I believe the things that really matter – ensuring all Americans can get a decent 

job that pays a fair wage, access affordable, quality healthcare, and retire with dignity and a little change in their pocket – are squarely in this Subcommittee’s jurisdiction. 

They’re also priorities which I’ve fought for my entire career in Congress, so I’m 

honored to now serve as Ranking Member of this Subcommittee and ready to take 

up this new challenge. 

Finally, I also want to thank Chairman Roe for the courtesy that he and his staff 

have extended me and mine to date – particularly on the multi-employer pensions 

crisis. I look forward to working with him on that complex issue and others in the 

weeks and months ahead. Thank you, Dr. Roe. 

Now with respect to today’s hearing, in the past three and a half years, the Committee has held at least 16 hearings or mark-ups on the National Labor Relations 

Board, and today, we unfortunately are at it again. 

It’s my understanding that witnesses will discuss two cases: 

In the Browning-Ferris case, the Board has asked for input on whether to update 

and modernize the ‘‘joint-employer standard.’’ It is believed that the current standard does not reflect the reality of today’s workplaces. The second case, Purple Communications deals with the right of employees to use email to communicate regarding organizing, bargaining, or forming a union. 

The Board has not come yet to a decision to change either of these standards. It 

is simply asking for comments. 

In fact, according to one of the witness’s testimony – and I am quoting here – ‘‘All 

indications are that what workers and employers should expect is that NLRB will 

decide these cases by carefully applying established legal principles to the particular 

facts of each case and that, in so doing, the Board will attempt to provide legal guidance to workers and employers who encounter similar situations in the future.’’ 

Assuming that no one associated with the hearing would want to be perceived as 

attempting to ‘‘chill’’ NLRB Members from engaging in their job or attempt to influence a decision under consideration, one must wonder about the timing of this hearing and question its purpose. 

I look forward to hearing the testimony and trust we will be informed and led 

by the facts and not spend time undermining the efforts or integrity of the Board, 

mischaracterizing its decisions, or maligning Board Members. That’s not fair or productive. 

Again, to quote one of the witness’s testimony, ‘‘there is no reason to think whatsoever that workers and employers should expect anything from the NLRB in deciding these cases other than a thoughtful, considered application of established principles to the particular facts of each case.’’ 

Mr. Chairman, after 16+ hearings and mark-ups, I think the subject of the NLRB 

has been covered. 

In the few months we have remaining this session, I hope this Subcommittee, the 

full Committee, and this Congress will turn its attention to what many of us would 

consider incredibly urgent priorities of the American people – raising the minimum 

wage, extending unemployment insurance for the millions who need it, stopping employment discrimination based on sexual discrimination, ensuring pay fairness for 

women, and providing relief for the tens of millions of students and parents with 

student loan debt. 

Again, I thank the Chair and yield back my time. 

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7 

Chairman ROE. I thank the gentleman for yielding. 

Pursuant to committee rule 7(c), all members will be permitted 

to submit written statements to be included in the permanent 

hearing record. Without objection, the hearing record will remain 

open for 14 days to allow such statements and other extraneous 

material referenced during the hearing to be submitted for the official hearing record. 

Now it is my pleasure to introduce our distinguished panel of 

witnesses. First, Mr. Andrew Puzder is the chief executive officer 

for CKE Restaurant Holdings in California. Welcome. 

Mr. Seth Borden is a partner of McKenna Long and Aldridge in 

New York, and Mr. Borden has represented management and labor 

in employment matters since 1998. Welcome, Mr. Borden. 

Mr. James Coppess is the associate general counsel for the AFL– 

CIO in Washington, D.C., and welcome, Mr. Coppess. 

And Mr. Roger King is counsel at the Jones Day law firm in Columbus, Ohio, and he represents management in matters arising 

under the National Labor Relations Act. And welcome again, Mr. 

King, to our committee. 

Before I recognize you to provide your testimony, let me briefly 

explain our lighting system. You have got five minutes to present 

your testimony. When you began, the light in front of you will turn 

green. When one minute is left, the light will turn yellow. And 

when your time is expired, the light will turn red. At that point, 

I will ask you to wrap up your remarks as best as you are able to, 

and after everyone has testified, each member will have five minutes to ask questions. And I will probably be a little more diligent 

with the members. 

And now I would like to now begin the testimony. Mr. Puzder, 

if you would open. 

STATEMENT OF MR. ANDREW F. PUZDER, CEO, CKE 

RESTAURANTS, CARPINTERIA, CALIFORNIA 

Mr. PUZDER. Chairman Roe, Ranking Member Tierney, and 

members of the subcommittee, thank you for inviting me to testify 

on an issue of importance not only to our company, but to our nation’s entire franchise community: the NLRB potentially adopting 

a new joint employer standard that would consider franchisors employers of their franchisee’s employees. Such a standard would 

threaten the very successful franchisor-franchisee relationship that 

has been generating jobs and economic growth for decades. 

I can’t see the logic of the labor laws requiring or even permitting this. As I will explain, franchisors and their franchisees simply 

are not joint employers. 

My name is Andrew F. Puzder. I am CEO of CKE Restaurant 

Holdings, Inc., and it is an honor to be here. CKE owns and franchises nearly 3,500 restaurants in 42 states and 31 foreign countries under the Carl’s Jr. and Hardee’s brands. We employ over 

22,000 Americans, and our 226 franchisees additionally employ 

about 50,000 Americans. 

We and our franchisees also spend hundreds of millions of dollars on capital projects, services, and supplies that create thousands of additional jobs and generate broader economic growth. 

And franchising’s overall economic impact is greater still. As I cited 

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in my written testimony, as of 2012, there were nearly 750,000 

franchise establishments in the United States, employing about 8.1 

million people with economic output of $769 billion, or roughly 3.4 

percent of our nation’s gross domestic product. 

And that is not all. One report estimated that in 2005, 

franchising’s economic impact was to add 21 million jobs and 

$660.9 billion in payroll. That is 15.3 percent of all private-sector 

jobs and 12.5 percent of all private-sector payrolls. And 

franchising’s impact has only grown in the nine years since that report. 

The franchisor-franchisee relationship is built on a division of 

roles and responsibilities. The franchisor owns and licenses the 

brand, and the franchisee owns and operates one or more locations 

as a licensee. Businessmen and women from diverse financial and 

cultural backgrounds invest their time and money in franchisee 

businesses because the model works. Franchisors are contractually 

empowered to protect their brands, but those contractual provisions 

are limited. 

At CKE, we set standards that our franchisees need to meet to 

protect the integrity of our brands and ensure consistency throughout our system, but our franchisees run their businesses. With respect to employees, the franchisee independently choose the people 

they hire, the wages and benefits they pay, the training such employees undergo, the specific labor practices they utilize, the method by which those employees are monitored and evaluated, and the 

circumstances under which they are promoted, disciplined, or fired. 

As franchisors, we’re not involved in those decisions. 

As with most franchisors, CKE receives a one-time-per-restaurant fee, generally about 25,000, and a royalty, generally 4 percent of sales, to compensate us for the services we provide, for the 

use of our trademarks, and for protecting the value of those trademarks. CKE does not receive a share of the franchisee’s profits. 

Franchisors such as CKE benefit from a percentage of each restaurant’s top-line sales. Franchisees, on the other hand, benefit 

from their restaurant’s bottom-line profits. Because they directly 

benefit from an efficient and well-managed staff, the franchisees 

assume the risks associated with having and managing employees. 

Making franchisors liable for their franchisees’ employment decisions would force franchisors to exert control over such employment 

decisions. For example, franchisors would need to review hiring 

and compensation decisions. Franchisors would need to be present 

in the franchised restaurants more frequently to monitor the workplace, to dictate or even administer employee training, and to increase restaurant staffing, as the franchisor deemed necessary. 

Suddenly, franchisees would find themselves unable to independently run their businesses or to control their labor costs, a key controllable expense. The franchisors’ royalties are contractual as part 

of a franchise agreement that generally has a 20-year term and 

was never intended to compensate for the cost of managing a 

franchisee’s employees. To impose such risks and the associated 

costs on franchisors beyond their contractual obligations while depriving franchisees of the ability to control their labor costs would 

seriously threaten the viability of this very successful franchise 

business model. 

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In closing, extending the joint employer standard to franchising 

would not further any purpose of the labor laws. Rather, it would 

unnecessarily require systemic changes in the franchisor-franchisee 

relationship, impairing the viability of this very successful business 

model that has created so many jobs and so much economic growth. 

Thank you. 

And I am happy to take questions. 

[The statement of Mr. Puzder follows:] 

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Chairman ROE. Thank you. 

Mr. Borden, you are recognized. 

STATEMENT OF MR. SETH H. BORDEN, PARTNER, MCKENNA 

LONG & ALDRIDGE LLP, NEW YORK, NEW YORK 

Mr. BORDEN. Thank you. 

Good morning, Chairman Roe, Ranking Member Tierney—congratulations—and distinguished members of the subcommittee, it is 

a great honor and privilege to appear before this subcommittee as 

a witness. My name is Seth Borden, and I am a partner in the New 

York office of the law firm McKenna Long and Aldridge. 

My testimony today should not be construed as legal advice as 

to any specific facts or circumstances. And I am not appearing 

today on behalf of any clients. My testimony is based on my own 

personal views and does not necessarily reflect those of McKenna 

Long or any of my individual colleagues there. 

I have been practicing traditional labor and employment law for 

16 years. During that time, I have represented employers of all 

types and sizes in a variety of industries throughout the United 

States and Puerto Rico before the National Labor Relations Board. 

In 2010, I authored a chapter regarding new technologies and 

traditional labor law in the Thompson publication ‘‘Think Before 

You Click: Strategies for Managing Social Media in the Workplace,’’ 

the first treatise of its kind. And since 2008, my team and I have 

maintained the Labor Relations Today blog, which I am proud to 

say has received numerous accolades and has been archived by the 

United States Library of Congress. A copy of my firm bio is provided with the written version of my testimony. 

Mr. Chairman, I ask that the entirety of my written testimony, 

and the attachments thereto, be entered into the record of this 

hearing. 

My testimony this morning is presented within the context of 

this subcommittee’s examination of a number of pending National 

Labor Relations Board cases where the board appears poised to reverse longstanding precedents. Most specifically, my testimony focuses on the Purple Communications case now before the board. 

The board has solicited amicus briefs in this case with an eye toward overruling longstanding board law and creating a new employee right to utilize employer equipment for union organizing and 

other Section 7 purposes. The board should decline to do so. There 

is simply no compelling reason for the board to depart from decades 

of precedent, most recently outlined in its 2007 Register Guard decision, which provides that absent evidence of discrimination, employees have no statutory right to use the employer’s equipment for 

Section 7 activity. 

First, this is an issue of employer property rights, not employee 

communication. Employers who invest their money in the purchase 

and maintenance of equipment and materials for the furtherance 

of their enterprise should be able to control the manner in which 

that equipment is used. 

Other longstanding principles of labor law protect the employees’ 

rights to engage in communication, solicitation, and distribution of 

literature in furtherance of union organizing and other Section 7 

activity, so long as that activity does not interfere with operations 

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or other legitimate employer interests. The question in Purple is to 

what extent must an employer provide and pay for the means of 

employee communication and organizing. 

Second, the general counsel’s assertion that e-mail is the modern 

day virtual water cooler is entirely misplaced. Employer computer 

networks and e-mail are not the 21st century water cooler; they are 

the 21st century production floor. The board has long protected legitimate employer interests, most significantly the means of production, without which there would be no employees. 

Insofar as employees have at their disposal a wide and growing 

range of alternative means of communication with each other, an 

employer should not be compelled to open its network to additional 

burdens on efficiency, external threats, and potential legal exposure occasioned by non-business use. 

Third, for decades the National Labor Relations Board has 

agreed that Section 7 provides employees with no such right to use 

employer equipment. This has been consistently true with respect 

to each new technological development or increasingly common 

type of workplace medium: bulletin boards, public address systems, 

telephones, televisions, VCRs, photocopiers, and most recently, email systems. 

Over the course of several decades, these examples have 

changed, but the concept and the law has remained the same. 

There simply is no statutory right for employees to use them. If the 

board wishes now to create one, it would seem that the more measured and deliberative administrative rulemaking process or even 

statutory amendment by the legislature are far more appropriate 

avenues. 

Thank you, again, Mr. Chairman, and I will be happy to take 

any questions the subcommittee might have regarding my testimony. 

[The statement of Mr. Borden follows:] 

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Chairman ROE. Thank you very much. 

Mr. Coppess, you are recognized for five minutes. 

STATEMENT OF MR. JAMES COPPESS, ASSOCIATE GENERAL 

COUNSEL, AFL–CIO, WASHINGTON, D.C. 

Mr. COPPESS. Okay. Thank you. Chairman Roe, Ranking Member 

Tierney, members of the subcommittee, the hearing today is focused on two cases in which the NLRB has called for amicus briefs, 

Purple Communications and Browning-Ferris Industries. It is not 

uncommon for the board to seek broader input from the general 

public when it sets about deciding particular cases. This is because 

the NLRB has chosen to elaborate the law under the NLRA by deciding particular cases, rather than engaging in rulemaking. 

And, if it weren’t for such notices calling for amicus briefs from 

the public, there is basically no way to tell what particular issues 

are coming before the board. Too many cases come up. You would 

have to follow all of the particulars of the underlying decisions. 

One category of case in which this often happens is when reviewing courts have called upon the board to further explain what it is 

doing and some particular respect of interpreting the NLRA. Purple Communications is an instance of that case. The Seventh Circuit has a very long time ago now taken the board to task in its 

Guardian Industries case for its use of the word discrimination in 

deciding workplace communications cases. The Seventh Circuit 

suggested in that case that perhaps the board is using the term in 

a particular NLRA sense, which is, in fact, the case, and in the 

Register-Guard case, the board attempted to address the Seventh 

Circuit’s concerns. That was the case involving e-mail communications at the workplace. 

Unfortunately, the board’s attempt on Register-Guard failed. Its 

ruling that one application of the employer prohibition there did 

not constitute discrimination was overturned by the D.C. Circuit, 

and that leaves employers and workers with basically no guidance 

on what sort of employee communications in the workplace will be 

protected. 

I should emphasize that what we are talking about here is employee communication in the workplace and not union communication in the workplace. We are not talking about outsiders coming 

in. We are talking about people who are talking to each other at 

work being allowed to do so in the way they normally do. 

And I should say that we fully agree with Mr. Borden’s point 

that where employers allow people to use e-mail, their work e-mail 

addresses, to communicate on matters that aren’t strictly business 

related, the employer has no grounds for objecting to the employees 

communicating about Section 7 protected activities. I fully expect 

that what the board will do in that case is answer the concerns of 

the Seventh Circuit and the D.C. Circuit and explain what sort of 

employee communications may be prohibited and what sorts may 

not with respect to e-mail. 

The Browning-Ferris Industries case represents another category 

of case in which the board will often call for amicus briefs from the 

public. Where it perceives the workplace practices have developed 

in a way that are not perhaps adequately addressed by the board’s 

current application of the law, it—the Browning-Ferris case—is a 

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textbook example of something we see increasingly frequently, 

where employers will subcontract out basically the employment 

function. Employees will be brought in to run the operation, essentially at the employer’s—the ultimate employer, the owner of the 

facility’s—direction, but they will be formally employed by a third 

party, and that makes it very hard to bargain because the third 

party that formally employs the workers doesn’t ultimately control 

many of their terms of employment. 

All that is at issue in Browning-Ferris, I should add—or I should 

emphasize—is the duty to bargain and only insofar as both entities 

control terms and conditions of employment, there is absolutely no 

risk to the franchise arrangement, and in cases where the 

franchisor doesn’t control the terms of employment, they won’t even 

have a duty to bargain over that much, because there is nothing 

for them to bargain over. 

We think that these cases will be decided as they have been in 

the past when the board calls for broad input on the particular 

facts of the case, that the board will be applying long-established 

legal principles under the NLRA, and that in so doing it will clarify 

the application of those principles. 

I thank you for listening to my testimony and look forward to 

questions. 

[The statement of Mr. Coppess follows:] 

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Chairman ROE. Thank you very much. 

Mr. King, you are recognized for five minutes. 

STATEMENT OF MR. G. ROGER KING, OF COUNSEL, JONES 

DAY, COLUMBUS, OHIO 

Mr. KING. Thank you, Mr. Chairman, Ranking Member Tierney, 

again, my congratulations, also, members of the subcommittee. My 

name is Roger King. I am of counsel with the Jones Day law firm, 

also the senior labor employment counsel for the Human Resource 

Policy Association. 

I want to talk about not only Purple Communications and the 

Browning-Ferris case, but the agenda of this National Labor Relations Board and its ever-present changing policy orientation, I submit to you that the board should consider, first, as its priority to 

address the pending cases it has before it. 

Based on checking with the NLRB Office of Executive Secretary 

yesterday, there are 383 cases pending decision of the board today. 

One of those cases has been pending for 2,582 days. Mr. Chairman, 

that is over seven years. That is the Roundy’s case. 

Before launching into what many of us at least from the employer community would submit is a very potentially unfriendly 

agenda, perhaps the board should address its present case backlog 

and get that order of business addressed. 

Second, as the committee is well aware, the Supreme Court has 

pending before it the case of Noel Canning. I happen to be one of 

the counsel on behalf of the company in that case. Based on our 

research, depending on what the court does—and it is very difficult, of course, ever to predict what the Supreme Court may do— 

but if the Supreme Court affirms in whole or in part the District 

of Columbia Circuit Court decision in Noel Canning, approximately 

4,000 cases will be found to be void and will have to be addressed 

in some manner or another by the board and its general counsel. 

That is a substantial amount of business, particularly given the 

backlog that I just mentioned. 

Now, I want to comment about the suggestion of chilling the 

board. That is not the intent of my testimony. I have a very high 

regard for each and every one of the members of the National 

Labor Relations Board, a high regard for their integrity, and they 

are excellent practitioners of labor law. I know them personally. I 

also have very high regard for Richard Griffin, the general counsel 

of the board. 

That is not the question. The question is the policy orientation. 

And no matter how well intentioned the board members may be, 

at least the Democrat board members that are pursuing this agenda and its general counsel, it is a policy disagreement. It is an 

order of priority disagreement. They should, as I mentioned, 

reprioritize their business and address at least initially the cases 

they have before them. 

Now, I want to talk specifically about some of the initiatives just 

in the last few months this board has pursued. In spring of 2014, 

the board is again engaged in rulemaking to change the basic election procedure environment that has been in place for well over 30- 

plus years. There is no factual or legal predicate to do so, but yet 

that is being actively pursued again, I might add, after the board 

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was initially stopped through judicial challenges with respect to 

that area. 

With respect to deferral of unfair labor practice charges in the 

arbitration arena, the board is again looking at that area without 

any factual or legal need to do so. It may be overturning over 59 

years of precedent by that initiative. With respect to the issue of 

who is and who is not a managerial employee in a college or university setting, the board may be overturning years of precedent 

there, over 34 years of precedent in the Yeshiva case. 

With respect to Purple Communications, excellent testimony on 

that point, we have had seven years of stability of the law under 

Register-Guard. We have no need to go back and review that. With 

respect to the joint employer doctrine, we just cannot understand— 

at least from an employer perspective—why that issue is even 

being raised by the general counsel. If the board pursues a change 

in the law there, we overturn 30 years of precedent. 

With respect to Northwestern University and college football 

players, why the board is even in that area I think is a substantial 

legitimate policy question. But, if the board pursues to find those 

students—and we believe they are students—or those individuals 

to be employees, they will overturn at least 10 years of law going 

back to the Brown University case. 

So when you start to do the math, Mr. Chairman, we are looking 

in a very few short months that this board would be overturning 

well over 100 years of precedent. That doesn’t even count the issue 

with respect to board procedure on elections. 

With respect to Noel Canning, of course, no one can predict how 

the court may decide. But we have 10 regional directors on this 

most recent recess appointee board that is being challenged where 

we believe are improperly approved. We have over 700, up to 1,000 

cases that may come back just from that board, from 2012 to 2013. 

And we submit at least the board ought to wait until the Supreme 

Court makes a decision to determine what impact, if any, the Noel 

Canning case may have on its agenda. 

In summary, Mr. Chairman and Ranking Member Tierney, there 

is a policy issue here. The board has business to do. It should go 

about that business. If it pursues its current agenda, including its 

general counsel, we submit it is setting a precedent, a very poor 

policy precedent for future boards. Are we going to get a continual 

swing in the pendulum back and forth in board law, after more 

hearings, more judicial briefs, more court challenges, lack of predictability in the law? That is not what this country needs. 

Thank you very much. I will be happy to answer questions. 

[The statement of Mr. King follows:] 

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Chairman ROE. Thank you, Mr. King. 

Mr. Tierney, you are recognized for five minutes. 

Mr. TIERNEY. Thank you. First of all, I thank all the witnesses 

for their testimony. It was useful and helpful on that. 

Mr. Puzder, I want to ask you a question. I mean, you would 

agree with me that the board hasn’t decided the two cases that we 

are talking about here today. Is that right? 

Mr. PUZDER. Yes, sir. 

Mr. TIERNEY. Okay. So, again, you could hear yourself well, 

right? 

Mr. PUZDER. I turned it off so I wouldn’t hear myself during 

their— 

Mr. TIERNEY. So, you know, I am a little familiar with 

franchisor-franchisee relationships. You can help me out if I go 

astray here. But the question would be whether or not the 

franchisor has control or the ability to control or co-determine 

terms and conditions of employment. 

Now, generally—and a lot of the franchises that I think people 

are familiar with—the franchisor has its own operation, you know, 

staff people, everything, and the franchisor has its own people 

working for it, whatever it is doing. And so in that situation, do 

franchisors generally hire people for the franchisee? Or does the 

franchisee? 

Mr. PUZDER. The franchisee hires their own employees completely. 

Mr. TIERNEY. Same with firing? 

Mr. PUZDER. Yes. 

Mr. TIERNEY. Same with disciplining them? 

Mr. PUZDER. Yes. 

Mr. TIERNEY. Same with supervising them? 

Mr. PUZDER. Yes. 

Mr. TIERNEY. And giving them direction? 

Mr. PUZDER. Absolutely. 

Mr. TIERNEY. So there is no occasion—or generally no occasion— 

where the franchisors are directly or immediately doing any of 

those things. 

Mr. PUZDER. Correct. 

Mr. TIERNEY. Okay. So what—I mean, you don’t claim some foresight or whatever what this board is going to do once it gets all 

the input and deliberates on this case, do you? 

Mr. PUZDER. No, there is industry concern that the board may 

not completely understand the franchising model, so I think I was 

invited to testify to clarify that model. 

Mr. TIERNEY. So you have five lawyers that Mr. King says—or 

five people that Mr. King says are very, very knowledgeable in the 

law, but your organization doesn’t think they know about franchises? 

Mr. PUZDER. No, I am sorry, we do know about franchising very 

well. 

Mr. TIERNEY. No, no, you don’t think they know about franchising, the board. You are concerned that they won’t be able to 

grasp the heavy issue of franchisor-franchisee relationships? 

Mr. PUZDER. No, I am sure they could grasp it. I think the idea 

is to make sure that the evidence or the testimony or the facts are 

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before them, and I believe that is why I was invited to testify. Obviously, I didn’t invite myself, but I believe that is why I was invited. 

Mr. TIERNEY. You are invited to tell us what you would like the 

board to hear? 

Mr. PUZDER. Yes. 

Mr. TIERNEY. Interesting. So have you shared this with the 

board? Are you going to file an amicus brief or— 

Mr. PUZDER. We would be happy to do so. I believe the associations that we’re involved with will file amicus briefs and will be 

helpful in that respect. 

Mr. TIERNEY. Okay. Yes, I mean, I am just a little baffled to 

what we pretend to do at this hearing. I think that your position 

should be heard by the board. I suspect that they will and that 

they are quite confident and capable of taking it under consideration and giving it whatever weight that they think it should have 

on that part. 

So I appreciate your concern. You know, I just—I don’t know that 

it is going to be problem for you. As I look at it, with—as I say, 

the sum knowledge that I have of franchisor-franchisee, you know, 

it looks like you may be, you know foisting your shadows there a 

little bit on that, until you know what the board is doing or have 

some inclination of them going in the wrong direction. 

Mr. PUZDER. Well, it is good to hear that, and it was good to hear 

from Mr. Coppess that we had no risk, so that was—just coming 

to the hearing, that made it worthwhile. 

Mr. TIERNEY. The risk that you have is that the board may disagree with you, and then that is the risk that Mr. King takes. I 

mean, he has very clearly said he believes in policy and, you know, 

the board may disagree with you. There are occasions when past 

boards have disagreed with policies that other people sought with 

and Mr. King wasn’t in here complaining then. He was in there 

thinking boy, they are geniuses and they are really going in the 

right track. 

So, I mean, I just don’t know, you know, that this is the appropriate forum to listen to how a board may make a decision in the 

future after it gets input from amicus and other sources on that. 

I mean, we are always going to have some distinctions or disagreements on the way that they interpret the law or its application on 

that. And I think that all of you have stated the considerations out 

there pretty well. I just haven’t heard any evidence that indicates 

to me that there is any reason to believe that this board won’t be 

fair-minded and won’t try to do the best that it can do under its 

abilities to make a decision that it believes is correct and reflective 

of the law on that. 

So I hear, you know, Mr. King’s concern about the—a number of 

cases that are pending on that. And I think that the Noel Canning 

case may seriously impact that, in which case we are all going to 

be concerned about that. But I don’t think that necessarily warrants the board abdicating its responsibility to make a determination of how it properly applies the law in Browning-Ferris or in the 

Purple case on that basis. 

So I think that is going to be it. And other than that, I suspect 

that listening to all you gentlemen has been interesting. I suspect 

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the board will hear the same thing, and I trust that they will do 

their job. Thank you. 

Chairman ROE. Thank the gentleman for yielding. 

Now, Mr. Wilson, you are recognized. 

Mr. WILSON. Thank you, Mr. Chairman. Thank you so much. 

This title, ‘‘What To Expect Next from the National Labor Relations Board,’’ has real meaning to the people of my home state of 

South Carolina, because I think that we are the prime example of 

abuse by the NLRB, which has made every effort to destroy jobs 

and destroy opportunity for the people in my state. 

Three years ago, Boeing had completed a 1.1 million square foot 

building. There were 1,000 people employed. And out of the blue, 

the NLRB dictated it could not produce 787 jetliners. I mean, incredible. Think of this. 

This was clearly due to the influence of the unions. They had placed $400 million into the President’s campaign, and a response 

was to block the ability of Boeing to operate in our state. South 

Carolina is a right-to-work state. Workers have the right to freely 

choose whether to be part of a union or not. And they have chosen 

not to be part of a union. 

South Carolina has fought back. I am very grateful that with the 

leadership of Governor Nikki Haley and the attorney general, Alan 

Wilson, that we fought back. Lawsuits were filed. It is very significant. We have the youngest attorney general and the youngest governor in the state of South Carolina. I am also proud we also have 

the first female governor in 340 years. They fought back. 

Our delegation fought with them, and I am very grateful for the 

leadership of now Senator Tim Scott, Senator Lindsey Graham, 

myself, the very famous Trey Gowdy. Everyone fought back, and 

we were successful. 

Now there are 7,000 jobs at the Boeing facility in Charleston. It 

is very important to me, because the suppliers are across the state. 

The Zeus Corporation of Orangeburg and Akin produced the tubing. The cables are produced by Prysmian of Lexington. Thermal 

Engineering of Columbia provides painting experts. AGY of Akin 

produces interiors. Bose in Blythewood produces the communications. Over and over again, thousands of jobs across our state, despite the NLRB. 

Now, today I want to thank all of you for being here, particularly 

Mr. Puzder. I am a Hardee’s biscuit ’n’ gravy customer. 

Mr. PUZDER. All right. 

[Laughter.] 

Mr. WILSON. And I want to thank you for the—and, hey, I love 

going by. The people working there, it just warms my heart to see 

people so enthusiastic, so positive, with good jobs. Does the 

franchisee or the franchisor hire, fire, discipline, supervise, and direct employees at a franchise store. 

Mr. PUZDER. We do not. 

Mr. WILSON. Wow. And what standards does the franchisor set? 

Why does the franchisor set any standards? 

Mr. PUZDER. We set standards that basically relate to protecting 

the trademark so that it is not abused, which protects also the 

franchisees who pay a fee to use that treatment, and for consistency. You want consistency in the food. You go to Hardee’s, you 

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want a biscuit to be a biscuit in every Hardee’s you go to. Just like 

McDonald’s or Burger King, you want a Whopper to be a Whopper 

no matter what store you are in. 

But beyond consistency and protecting the trademark, the matters relating to employee discipline or hiring policies are all in the 

hands of the franchisees. 

Mr. WILSON. Well, you do a great job. 

Mr. PUZDER. Thank you very much. 

Mr. WILSON. And, Mr. King, in the event the Supreme Court 

holds that the January 2012; recess appointments to the NLRB are 

unconstitutional, what will come of the thousands of decisions 

issued by the board? 

Mr. KING. Excellent question. Up to 4,000 could come back. That 

is just over the last 20 years of board decisions. They would be 

void. The board would have to consider them anew. We also have, 

Congressman Wilson, appointments to regional director positions 

throughout the country by allegedly quorum-less boards. All the activities, actions, or decisions of those regional directors may be 

void. And we would also have delegations of authority from 

quorum-less boards, at least allegedly, to the general counsel of the 

board, enforcement actions that may be set aside. So the potential 

would be an overwhelming litigation burden and reprocessing of 

case burden on the board and its general counsel. 

Mr. WILSON. And could the cases all be determined en banc? Or 

could it—would the—would citizens have an individual right to 

represent their case? 

Mr. KING. Congressman, each and every case would have to be 

reconsidered. I know of no legal precedent that would permit the 

board to en banc, if you will, ratify or consider on whole all of the 

cases. They have their own individual facts, applicable law, and we 

do have some precedent, after the Supreme Court handed down its 

decision, a new process, still there about 100 cases of a potential 

500 that had to be reconsidered, because the board had only operated with two members. The Supreme Court said, no, you had to 

have three. 

So when those cases came back, it took the board over 3–1/2 

years—and this is in my testimony—to process just that backlog of 

100 cases. So if you look at 4,000 cases, we have no idea how long 

it would take for the board to process them. 

Mr. WILSON. Thank you very much. 

Chairman ROE. I think the gentleman failed to mention that the 

attorney general in South Carolina is his son. 

[Laughter.] 

Mr. Pocan, you are recognized for five minutes. 

Mr. POCAN. Thank you, Mr. Chairman. And thank you to our 

witnesses. 

I am relatively new to the committee and brand-new to the subcommittee. So I guess maybe I am a little surprised that this is our 

16th time that this committee has been addressing the NLRB, 

when I thought, you know, perhaps when I get on the committee 

we would be talking about things like raising the minimum wage, 

making sure we had pay equity, dealing with other workplace protections, issues like ENDA, and then making sure that, I guess, 

NLRB was actually improving access for workers, because I know 

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things like minimum wage in my district, I have 59,000 people who 

would actually benefit from raising the minimum wage to $10.10. 

I think the gentleman who just spoke from South Carolina has 

about 50,000 people in his district that would benefit if we were 

doing that. 

But I understand this is before us, so let me try to talk about 

this and from my background. I have been a small-business owner 

for 27 years, as of last month. I also have a union shop, so I kind 

of straddle both worlds, a union shop by choice, but a specialty 

printing business. 

And one of the things I have seen a real trend in is specifically 

that employers are starting to use these outside entities, these 

third-party employers to hire workers, which seems to be getting 

around the law, right? It seems to make it harder for people to be 

able to organize in some of these situations, and I think what we 

saw with the Browning-Ferris Industries case specifically is exactly 

the problem that is happening more and more and why if the 

NLRB is going to try to address something, they might want to 

specifically look at this. 

So, Mr. Coppess, I guess I have a couple questions to start with 

you. Specifically about—you know, if a parent employer doesn’t determine the pay for an employee, how could that parent company 

effectively determine the conditions of employment for a subcontractor’s employee, with this third-party relationship? 

Mr. COPPESS. You mean the entity owner, Browning-Ferris? 

Mr. POCAN. Yes. 

Mr. COPPESS. Well, —if they exercise sufficient control over the 

terms and conditions of the direct employer, they would—in Browning-Ferris, they just dictated what wages, for instance, that wages 

couldn’t come over a certain level. They controlled the speed of the 

line. They controlled the position of the employees on the line. They 

controlled what equipment they were using. All of those things are 

important conditions of employment that the direct employer 

wouldn’t be able to bargain over. 

The joint employer bargaining obligation is just simply limited— 

to the overall employer bargaining over what it controls. They both 

have to come to the table or, in fact, they don’t both have to come 

to the table. The employer that owns the facility could authorize 

the direct employer to reach agreement on those matters and they 

would then just be jointly bound by that. But it is only the matters 

they control that they are required to bargain over. 

Mr. POCAN. Right. So if we broadened the joint employer standard, if the NLRB did, how would that help workers engage in a 

more meaningful bargaining process? 

Mr. COPPESS. Well, it is basically impossible to engage in effective bargaining if someone who is not at the table controls the 

terms. That is why going into a car dealer shop and bargaining 

with the direct salesman and he goes back to the manager, you 

don’t—you don’t really start bargaining until the manager is at the 

table. 

Mr. POCAN. That is a visual memory of that. 

Mr. COPPESS. Unfortunately, for me, too. 

Mr. POCAN. Yes, thank you. If I can, Mr.—is it Puzder or Puzder? 

I am sorry. 

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Mr. PUZDER. Puzder. 

Mr. POCAN. Puzder. Since you are here—and I happen to agree 

with you. I don’t think—I looked at a franchise when I first opened 

the business, decided it wasn’t the best route for me personally, but 

I don’t see—I would be surprised if the NLRB went to the extent 

that you are talking about. 

However, since you are here, can I just ask you, what is the average pay for a Hardee’s employee, a new employee coming in to 

start? 

Mr. PUZDER. I don’t know what Hardee’s is. I think it is in my brief the average restaurant level employee makes about $9 an 

hour. I think it is $8.96, if I recall. 

Mr. POCAN. Okay. But you don’t actually—the Hardee’s— 

Mr. PUZDER. I wouldn’t break—I can’t break Hardee’s out from 

Carl’s. I don’t know it. I mean, I know—I mean, we run Carl’s and 

Hardee’s as one brand with two names. For us, it is really just one 

company. 

Mr. POCAN. Got you. And do you know—and, again, I am not 

sure if this is in the brief, but, if you can separate it either together 

or separate, how many of the Hardee’s and Carl’s Jr.’s employees 

use food stamps or Medicaid? 

Mr. PUZDER. I don’t know that. I know that of the 22,000 employees we have over the age of 21, so taking out 16-to 19-year-old college and high school students, about 5 percent of our employees 

make minimum wage. And, you know, obviously, a high percentage 

of those are part-time. So I don’t know how many get food stamps. 

I don’t know how we would know that. 

Mr. POCAN. And I appreciate that. I just think, as we talk about 

this issue, you know, you just mentioned 22,000 people who potentially would also benefit from the minimum wage increasing to 

$10.10, as well as the taxpayers in the jurisdictions that currently 

are subsidizing many of those folks— 

Mr. PUZDER. They would benefit if the price of everything didn’t 

go up. But, of course, as soon as you raise the minimum wage, everybody who has minimum wage employees—plus, there is sort of 

a tide lifts all boats impact. Higher— 

Mr. POCAN. You will get additional business, yes. Okay. 

Mr. PUZDER. So your labor costs go up, and when labor costs go 

up, you either automate or you increase your prices to cover the 

labor cost increase, which, of course, is why we are talking about 

increasing the minimum wage when we just increased it 5 years 

ago, because you—you know, you will always increase your costs to 

cover increased expenses, whether it is food costs, occupancy costs, 

or labor. 

Mr. POCAN. I think a lot of people would say— 

Chairman ROE. Gentleman’s time is expired. 

Mr. Kelly, you are recognized for five minutes. 

Mr. KELLY. Thank the Chairman. 

Being an automobile dealer, I don’t share the same feelings you 

have about going to negotiate a price. 

[Laughter.] 

And I would look at the effect on the general economy when our 

automobile business is running the right way. It affects everybody, 

including the people who build them. So I don’t want to get too far 

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out of whack here about who controls what, but I am very interested in what we are looking at right now today, and we are talking about an NLRB that continues to get involved in things. 

And if we are trying to get this country back on its feet again, 

if we are really trying to get our economy back up and moving, if 

we are trying to take advantage of all the assets we have, then you 

have got to sit back and wonder, so why is this group looking—and, 

Mr. King, you made reference—how many years of precedent are 

we looking at now? How many—are we going to go back and look 

at how many? 

Mr. KING. Just in the last few months, Congressman, this board 

is proposing in its general counsel to consider changing over 100 

years—maybe up to 130 years of precedent in addition to changing 

over 30 or 40 years of established procedure and protocol on how 

the board runs elections without any justification at least that I 

can determine or others can determine. 

Mr. KELLY. Yes, well, we have that—not just with the NLRB, but 

with a lot of other things that we are looking at are changing here 

very rapidly. Let me ask you this. There is a cost involved in both 

time and money to go back and do this. Can you peg it at all as 

to what that would be? 

Mr. KING. I don’t have a way of calculating it, per se, but the 

board, like every federal agency, Congressman, comes to this body 

and asks for resources. If these resources are being diverted to 

these policy efforts and not, as I mentioned, to addressing their 

current case load, which is approximately 383, one wonders about 

the priority of the board. 

In the Browning-Ferris case that has been discussed here, why 

is this case even being considered? We went back and looked at the 

facts, Congressman. The subcontractor here, LeadPoint, has its 

own human resources department, employs no less than 17 supervisors and lead men to oversee the work at the site, Browning-Ferris site, maintains its own payroll, was responsible solely for hiring, 

discipline and discharge, and has separate business entity locations 

at other Browning-Ferris operations. 

Why is this case even being considered? Back to your resource 

question. We don’t know. 

Mr. KELLY. Okay, but my question is also going to be—so all of 

these decisions, they are going to be reviewed again. My assumption is going to be, somebody is going to have to engage counsel, 

legal counsel. And so monies that they would have spent on other 

things, right now—when you talk, again—I am going back to the 

economy. We are trying to get people back to work. We are using 

very valuable revenue and assets that we have to go back and look 

at things that have already been established and, as you say, for 

100 years and in some cases now we are going to go back on 40 

years. 

And my question is, so why now? What is the purpose in doing 

this? If we are really trying to help the economy to recover, why 

would we put this weight on their back? And I am talking about 

employers right now. 

The other thing that is happening—and I think—because of what 

you do in your business, I have got to tell you, General Motors does 

not tell me how to hire people, how to fire people, what our policies 

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are, nothing. Now, neither does Hyundai, nor Kia, okay? I am an 

independent businessman. I rise and fall each month on the efforts 

of our total collective group and how they perform in the marketplace in a highly competitive marketplace. 

So it is really important that we can kind of run our business 

without having—being run into the ground by a continuous government regulations that keep us from doing what we do. We sell cars 

and trucks. We service cars and trucks. But when you have to stop 

to go through these exercises in futility, that takes your eye off the 

ball. 

In your business, especially—and I have got to tell you, being an 

employer for many, many years, you know the greatest relationship 

we have is between the people that work with us every day to serve 

our customer base and management. I have been to weddings and 

funerals and baptisms and—you name it, I have been there. There 

is a great relationship. 

But that relationship is now being destroyed and picked apart by 

a government that continues to pit employer against employee, 

owner and operator against associate and puts one group as these 

are bad people who are taking advantage of you. Nothing could be 

further from the truth. We have destroyed the regular work week, 

and we continue to put a heavy burden on people who actually are 

trying to rebuild the economy. 

In your business, it has got to be overwhelming what you go 

through with employees and you bring it—by the way, these are 

not permanent jobs. These are starting-level jobs. I have so many 

friends that started off in McDonalds or a Burger King or a 

Hardee’s and now they are managing them or have their own 

stores, so let’s not be confused about what these jobs are. It allows 

people to grow. 

The numbers that you talked about in the turnover, if you could, 

because I don’t believe—something we get caught up in this living 

wage. I believe it is a starting wage that allows you to build your 

own life. 

Mr. PUZDER. Well, for me, I started out at minimum wage, which I think at the time was like $1.25 an hour scooping ice cream at 

a Baskin-Robbins. It never occurred to me that would be a job for 

which I should have a living wage or support a family of four, nor 

is it a job that would engender somebody supporting a family of 

four. 

So we do have starting-level positions in our company. If you— 

our turnover at the restaurants, by the way, is about 100 percent 

a year. I mean, people come in and out. We support them getting 

educations. We encourage them to get an education. We help them 

through the process. We actually have tuition reimbursement while 

we reimburse employees that have been with our company over a 

year, up to $10,000 worth of tuition and books. 

So we encourage people to move on in life. And then there are 

people in the restaurants who stay and enter the management 

stream, become general managers, district managers, regional 

managers. The guys who run Hardee’s and the guy who runs Carl’s 

Jr. started out as minimum wage employees working behind the 

counter and now are running businesses that do many tens of millions, if not hundreds of millions of—in EBITDA a year. 

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So it is—they are entry-level jobs. They are the way that you can 

get on the ladder. And I think the CBO came out recently and said 

that 500— 

Chairman ROE. Would you wrap up your testimony, Mr. Puzder? 

We are over time. 

Mr. PUZDER. —wouldn’t be created. 

Mr. KELLY. Well, thanks for relating the American history and 

American story. This is impossible any place else in the world and 

sometimes we forget it. 

Chairman ROE. The gentleman’s time is expired. 

Mr. KELLY. Thank you, sir. 

Chairman ROE. Mr. Scott, you are recognized. 

Mr. SCOTT. Thank you, Mr. Chairman. 

Mr. Chairman, the gentleman from Pennsylvania in his district 

has, as I understand it, 62,000 of his hard-working constituents— 

67,000 of my constituents would receive a pay raise if we increased 

the minimum wage to $10.10 per hour. That is in addition to the 

tens of thousands of others who would benefit from the rising all 

tides effect where they are close to the minimum wage now, would 

get a raise in addition to that. 

Mr. King, you mentioned the problem with the recess appointments. There are two questions involved in that case, one, whether 

they were intra-session appointments and—I guess the fundamental question, was the Senate in recess at all? If they decide 

that they are intra-session appointments, —if that part of the case 

is sustained, it is my understanding that 329 intra-session appointments have been made since 1991 and President Obama’s 29 is the 

lowest since Ronald Reagan—would all of those decisions way back 

then have to be reviewed on all the different agencies in the 

NLRB? 

Mr. KING. Potentially, Congressman Scott, yes. You are correct. 

There are actually three questions pending before the court, and 

the third one you alluded to is the pro forma session question. But 

depending on how the court rules, if it affirms in whole or in part 

the D.C. Circuit Court of Appeals opinion, certainly the appointments that you mentioned would be called into question by both 

Democrat and Republican presidents. You are correct. 

Mr. SCOTT. And that would go back to 1981? 

Mr. KING. At least, if not further. 

Mr. SCOTT. Mr. Coppess, in the question of the e-mails, is there 

any question whether or not the employer has the right to restrict 

the use of e-mails? If they restrict e-mail use only to official business connected concerns, no personal use for any reason, is that— 

does an employer have the right to do that? 

Mr. COPPESS. Yes, they have a right under the NLRA to do that. 

The problem comes, as everybody who has ever used a work e-mail 

knows, that it is practically impossible to do that. And any employer that were to actually try to do it would so annoy the employees that it would be at a great cost. 

When the board last considered this issue in Register-Guard, 

there was interesting testimony from a witness who had been 

studying e-mail in general. And what he remarked on was that in 

the early days of workplace e-mail, employers often adopted rules 

that said no personal use. And they quickly discovered those rules 

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could never be enforced, so they—by the time of the Register-Guard 

hearing, this witness said over 90 percent of employers formally 

permitted non-business use of e-mail, and, of course, that has been 

all of our experience, that personal use is, in fact, permitted. 

Mr. SCOTT. So once they allow personal use, can they legally then 

excise out NLRA-related communications? 

Mr. COPPESS. No, I think all of us agree on that. Mr. Borden’s 

testimony is to that effect. That is my understanding of the law. 

They can’t engage in content-based restrictions on NLRA-protected 

employee communications. 

Mr. KING. Pardon for interruption, I want to go on record, I do 

not agree with that last statement. 

Mr. COPPESS. Okay. I mean— 

Mr. KING. I have a considerable high regard for Mr. Coppess. He 

is an excellent lawyer. But on that point, we do not agree. 

Mr. COPPESS. I am sorry. I didn’t mean to speak for Mr. King. 

I didn’t realize it was at all controversial. 

Mr. SCOTT. Mr. Coppess, can you talk a little bit more about 

what the complication is when—we talked about the outside agencies supplying employers in a franchise situation. Is it different in 

situations that are not franchise situations? 

Mr. COPPESS. Well, the operation at issue in Browning-Ferris is 

that the opposite removed from the franchise situation we have 

had described to, as there the employer—the jobs at issue in that 

case are very simple jobs. People stand along the line at assigned 

spaces, Browning-Ferris assigns them the spaces. They are fed 

trash along a conveyor belt that is run by Browning-Ferris, the 

speed of which is controlled by Browning-Ferris, and they sort 

trash. 

Everything in the plant is controlled by Browning-Ferris. Certainly, the subcontractor has line supervisors telling people, yes, 

you continue to stand there, continue to sort the trash as it comes 

to you, but there is no much also to the job other than what they— 

the enterprise owner controls. So it is at the opposite remove from 

what we are hearing about the franchise situation. 

And I would like to add that it is a really good example of why 

the board calls for amicus briefs. So here they are deciding a case 

that has nothing to do with franchises. And the franchise operations will have the opportunity to come in and say this may look 

like an easy case, but here are some things you ought to keep in 

mind so when you speak, you maybe don’t get into trouble you 

don’t want to get into. You know, telling them about it is the thing 

to do. They are deciding the case, and they have asked to hear. 

Mr. KING. On that point, Mr. Coppess— 

Chairman ROE. I think the gentleman’s time has expired. 

Mr. Byrne, you are recognized for five minutes. 

Mr. BYRNE. Thank you, Mr. Chairman. 

And, gentlemen, appreciate your being here today. I took labor 

law 35 years ago this year and spent the vast majority of my career 

representing people before the board and handling a lot of issues 

like this. I appreciate the level of professionalism I am hearing 

coming from the witnesses today. 

I have got to agree with Mr. King. Maybe it is my age and having dealt with this for a long time, but we have got decades of 

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precedent that are literally being overturned or at least being considered to be overturned by this labor board. And I think it is extremely appropriate that this committee take this up at this point 

in time both because of our policymaking function, Mr. Chairman, 

but also I think Mr. King raised a very important point, and that 

is the role that the Congress plays in appropriating money to federal agencies that spend money on doing things when they need to 

be taking care of business where they have a backlog. 

And if you have ever had a backlog for a client with the National 

Labor Relations Board, it is hard to explain to your client why that 

board can’t get to their case, and it would be particularly so if they 

are trying to launch out in new policy areas, which brings me to 

Mr. Borden’s testimony. 

When I first started, Mr. Borden, the big thing was bulletin 

boards. We didn’t have e-mails. And I remember telling client after 

client after client, don’t let your employees use the bulletin board 

to advertise for a yard sale or their kids’ Little League game or 

anything like that. And so we said that for years. 

Then with these newfangled things called e-mails came along, 

and I may have read your treatise when I told my clients to do 

this, don’t let your employees use the e-mail system at the office 

for anything other than business matters. And I am probably like 

thousands of labor lawyers that told their employer clients that. 

And now to find that the labor board is considering making emails opened up for employees to use to make advocacy one way 

or the other on unionization really surprises me, and this idea, Mr. 

Coppess, that these employees are doing this on their own is ridiculous. They are being directed by the labor unions that they are in 

concert with. Yes, sir, they are. It is a concerted effort. 

And what we would have in that circumstance is this very difficult situation within the workplace, where it interferes with workplace communications about the things that have to happen at the 

work. I think it is very troubling for the productivity for the American economy. 

But I do have a question. I was listening to Mr. Coppess’s statement. You said there is no reason whatsoever that workers and 

employers should expect anything from the NLRB in deciding these 

cases other than a thoughtful, considered application of established 

principles, established principles to the particular facts of each 

case. 

Mr. King, admittedly, this is mostly a new board. However, is 

this statement considered—consistent with what we have seen 

from the Obama Administration’s NLRB? Was this true in the specialty health care case? 

Mr. KING. No, sir, it was not. In all due respect to the board 

members and its general counsel, we have not seen from an employer perspective a fair and even-handed approach to the facts 

and the law that it applies to the facts. Back to your point, the 

precedent that I am talking about, over 100 years of precedent, 

that was established by both Democrat and Republican boards. 

This should not be a partisan issue. 

Specialty Healthcare case overturned on its head the way the 

board goes about determining who is appropriate to vote in an election. We have a regional director of the board applying Specialty 

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Healthcare in the Bergdorf Goodman case where the regional director found that women shoe department employees on noncontiguous floors of that department store constituted an appropriate voting unit. 

If you take the average retail department store and apply that, 

quote—‘‘reasoning,’’ which is highly suspect, I would submit, you 

could have 30 or 40 different bargaining units in that store alone. 

I mean, what is next, the men’s bowtie department? 

Mr. BYRNE. Well, whether it is pro-management or pro-employee, 

they are not following established principles. I mean, we have all 

practices—we win or lose with the principles we have had. We have 

had an equilibrium before the board, practitioners have and parties 

have had, for decades. And the point is that they are not following 

established principles. They have decided to go off and create new 

principles. And that undermines the equilibrium we have had for 

years. Isn’t that the case, Mr. King? 

Mr. KING. That is certainly my position. And back to your colleague’s question about interfering in the workplace, this board in 

over 100 decisions has gotten into the issue of employer policy 

statements, employer handbooks, the minutiae, every paragraph, 

every sentence, even punctuation marks, now are under scrutiny 

because they may somehow chill employees’ rights. Is that a good 

use of the board’s resources? I submit not. 

Chairman ROE. Gentleman’s time is expired. 

Ms. Bonamici, you are recognized for five minutes. 

Ms. BONAMICI. Thank you very much, Mr. Chairman. And thank 

you to the witnesses for testifying today. Like Mr. Pocan from Wisconsin, I am also fairly new to this subcommittee, and when I 

joined, I was pretty enthusiastic about having the opportunity to 

discuss workers’ rights. 

I certainly know from watching what has happened over history 

how important the labor movement has been in getting the rights 

to organize and collectively bargain for generations. It is really unfortunate that we spend a lot of time here talking about what looks 

like attempts to minimize the importance of the NLRB. I am concerned about that. 

Yesterday, I had the opportunity to attend the White House 

Summit on Working Families, which was a great opportunity to listen to not only working people from across the country, but also 

business owners who share their stories about how family-friendly 

policies actually help with attracting and retaining good workers. 

That was a great discussion. I wish that is the discussion we were 

having today. 

Some of the things that we talked about at the summit—equal 

pay for equal work, raising the minimum wage—are areas where— 

I know the labor movement has long been a leader in those areas. 

I am from a state where the voters in Oregon years ago raised 

the minimum wage by initiatives. And it is linked to the CPI, so 

it automatically adjusts. It is one of the higher minimum wages in 

the country. It has actually been good for Oregon. I have about 

43,000 constituents in my district who could actually benefit from 

raising the minimum wage to $10.10 an hour under the Fair Minimum Wage Act. And I know now there are many businesses talking about doing this because—to have a national standard would 

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be great for the country and also for the states that have lower 

minimum wages. 

I know the gentleman from Alabama who just spoke. I also took 

labor law in law school many years ago. I am not going to say how 

many. You have about 54,000 people in your district who would 

benefit from raising the minimum wage. 

Interestingly, I did not, like you, go into practicing labor law. 

When I was in private practice, before I discovered that my kids 

were more fun than lawyers, I had a practice in franchise law and 

I represented franchisees. So it has been an interesting discussion 

listening to Mr. Puzder. 

And I certainly see, as Mr. Pocan did, the distinction between 

subcontracted employees and employees of franchisees. Big distinction there. But I appreciate the comment that was made about this 

is why the court asks for briefing. 

So I wanted to ask, Mr. Coppess, in your testimony, you talk 

about how the NLRB will decide these two cases—and we are really predicting what the court might do and talking about that—by 

carefully applying established legal principles to the particular 

facts of each case. And in doing so, the board will attempt to provide legal guidance to workers and employers who encounter similar situations in the future. And I appreciate that statement. 

And when I came in, I couldn’t listen to your testimony because 

I was in a markup in another committee, but I did read your testimony. And I heard Mr. King talking about his contemplation about 

what might happen with regard to the Noel Canning opinion, if the 

Supreme Court does uphold the D.C. Circuit. Mr. Coppess, what is 

your thought on that? What is going to happen if the Supreme 

Court does uphold the D.C. Circuit? What do you see happening 

logistically? 

Mr. COPPESS. Well, we know actually with a fair degree of certainty what will happen for the NLRB, because they have been 

through it before. The ruling for the NLRB will simply be whatever 

actions the board took within the period covered were taken without a quorum. That was the precise issue in New Process Steel. 

The issue for the rest of the government is mammoth. I mean, 

it could eliminate the recess appointment authority as a practical 

matter, it could invalidate decisions of other agencies made by 

other appointees who aren’t used to it the way the board is, so 

there could be far-reaching ramifications of that decision, but not 

for the NLRB. The NLRB has been through it before, has practice, 

unfortunately. It can grind out the cases again. 

But that part of it we know what is going to happen, because we 

have been through it once before. 

Ms. BONAMICI. Right. Well, I know we are all eagerly waiting for 

that opinion. And the Supreme Court did not—and I think it is 

common sense—that it is a different world now than it was at the 

framing of the Constitution. And we fly back and forth from the 

West Coast on a regular basis. And, you know, people used to take 

a stage coach and come in, be in D.C. for months at a time. 

So it is a different world, but we are waiting to see what is going 

to happen. I am very concerned about the decisions that were decided during that period of time. And, of course, as you mentioned, 

Mr. Coppess, what happens in other areas of the government. 

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So with that, Mr. Chairman, I yield back the balance of my time. 

Chairman ROE. I thank the gentlelady for yielding. 

Dr. Bucshon, you are recognized. 

Mr. BUCSHON. Thank you, Mr. Chairman. I would also like to 

point out interestingly that the CBO estimated 500,000 people 

would lose their job in America if we immediately raised the minimum wage to $10.10 an hour. I would be interested in the calculation in all of our districts how many people would lose their job if 

the minimum wage was raised. 

This is for Mr. Borden. Mr. Coppess states in his testimony that 

the NLRB’s last attempt in Register-Guard to address whether employees have the right to use employer e-mail for Section 7 activities ‘‘failed.’’ According to Mr. Coppess, employers and workers are 

uncertain of when e-mail communications on the NLRA protected 

topics are protected and when they are not. 

Mr. Borden, is this accurate? 

Mr. BORDEN. I don’t think so. I think it would be more accurate, 

with all due respect to Mr. Coppess, to say that the NLRB failed 

to give the AFL–CIO the decision it wanted in that case. I think 

the standard that was set forth in the Register-Guard decision was 

extremely straightforward and consistent with decades’ worth of 

precedent. And that is simply that employers may promulgate and 

enforce a blanket ban on non-business-use of e-mail. 

Absent discrimination, there is simply no employee right to use 

employer equipment for Section 7 purposes. I would submit that 

the issue that is currently before the board does not exactly have 

the same level of consensus that my friend here has suggested 

today. It is clear from the board’s solicitation of amicus briefs that 

they are considering overturning that very clear and straightforward standard and creating a substantive right for employees to 

use employer equipment for Section 7 purposes. 

Many employers across the country may choose not to enforce 

such a blanket ban on non-business use of their equipment. I have 

no quarrel with that. But I see no reason for those who have chosen to invest in this equipment and to dedicate it exclusively to 

business purposes, no matter how hard that may be to enforce, to 

force them to make it available otherwise. I think the thing that 

creates uncertainty for employers is when the agency tasked with 

interpretation and enforcement of a statute so drastically departs 

from precedent like this every four, six, or eight years. 

Mr. BUCSHON. I mean, I would just also like to point out, my dad 

was a United Mine Worker for 35 years, so I understand that perspective. I mean, would you—I am just guessing—I mean, maybe 

the reason why unions want access to their business e-mails is because at many businesses people aren’t really interested in what 

they have to say, and so they are having problems getting access 

to personal e-mail information. And this is a way of co-opting and 

passing on information to people that may or may not be interested 

in what they are trying to promote. 

I mean, I don’t think you necessarily need to comment on that, 

but that would be, I think, maybe something that could be. 

In Register-Guard—also for you—in Register-Guard, the dissenting Democrat board member stated, if an employer has given 

employees access to e-mail for regular routine use in their work, he 

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would find that banning all work-related solicitations is presumptively unlawful, absent special circumstances. 

Is this standard applied anywhere else? 

Mr. BORDEN. I am unaware of any agency, court, or authority 

that requires employers to make employer equipment available to 

employees for non-business use. I don’t—I am sure that—consistent 

with what we discussed earlier, there may be employers that 

choose to allow employees to do so. But I am unaware of, you know, 

a law or a principle that would require, for example, a freight delivery company to allow drivers to drive their trucks around on the 

weekend or to go to the store, or what have you. I am just unaware 

of any. 

Mr. BUCSHON. Thank you very much. I yield back, Mr. Chairman. 

Chairman ROE. Thank the gentleman for yielding. 

Dr. Holt, you are recognized for five minutes. 

Mr. HOLT. I thank the chair. 

Let me begin by asking the gentleman who just spoke if he 

knows that 66,000 of his hardworking constituents and 43,000 of 

mine would receive a pay raise— 

Mr. BUCSHON. Would the gentleman yield? 

Mr. HOLT. —if—if the—I am asking you a question, so in a moment I will yield—would receive a pay raise if the gentleman supported raising the minimum wage to $10.10 an hour under the Fair 

Minimum Wage Act. 

Mr. BUCSHON. Will the gentleman yield for a second? 

Mr. HOLT. I would yield for an answer. 

Mr. BUCSHON. I would be interested to know how many people 

in my district would lose their job if the minimum wage was raised 

to $10.10 an hour. I yield back. 

Mr. HOLT. I would suggest that the gentleman talk with economists from Pennsylvania and Indiana and New Jersey and other 

universities that have said over and over again that job loss—net 

job loss—is not a major effect of increases in the minimum wage. 

Mr. Coppess, a couple of questions. First of all, just to continue 

the discussion that was—well, it was the one-sided discussion with 

Mr. King that you did not get a good chance to answer. In how 

many cases has the current board actually overturned precedent, 

as Mr. King was suggesting has been happening a lot? 

Mr. COPPESS. I haven’t kept a tabulation. I can’t on the top of 

my head think of any. I would talk about the Specialty Healthcare 

case in particular being—that has been brought up. What happened in Specialty Healthcare was the board had used a variety of 

formulations to describe what an employer would have to show in 

order to broaden a petition for a bargaining unit in an election 

case. 

And the formulation the board chose to use as they thought 

being a particularly clear statement of the law was a formulation 

suggested by Judge Douglas Ginsburg of the D.C. Circuit, who was 

famous as a nominee to the Supreme Court by President Reagan. 

He is hardly a left-wing activist. 

The Specialty Healthcare case itself was challenged in the Sixth 

Circuit, and the Chamber of Commerce—I believe Mr. King’s firm 

maybe represented them—filed an amicus brief. The Sixth Circuit 

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unanimously upheld the board’s decision in that case. The same 

issue was raised in the Fourth Circuit in a case that I argued for 

the machinists. Once again, the Chamber filed an amicus brief on 

the merits in that case. The Fourth Circuit said the board was 

right. They went on to do a recess appointment thing that has kept 

the case suspended. 

But that particularly notorious example of overturning the law is 

a perfect example of them just clarifying the law and applying established standards and deciding cases. 

Mr. HOLT. Thank you. You know, I find it interesting that we are 

even holding this hearing today. You know, I am always happy to 

speak about the NLRA. We sit here under the gaze and the portrait of Chair Mary Norton, who oversaw the Labor Committee 

when that was passed, which I think is a landmark in world history of setting up employer and employee rights and protections 

and collective bargaining and the associated legislation establishing 

wages, a floor on wages, and a limit on working hours. 

I wish we were having a hearing about how we could strengthen 

and expand these protections, which I really think, as I said, have 

been a landmark in world history that make for a better economy, 

really, beneficial to everyone. This is not just about employee 

rights. This is about having a more efficient and, not incidentally, 

humane economy. 

Mr. Coppess, another question. I am wondering whether there is 

a—kind of a red herring or an argument without content about— 

employers that have equipment, such as e-mail, that is dedicated 

exclusively to work-related use. First of all, I am wondering how 

common that is with respect to e-mail and, secondly, I am wondering whether anybody here or elsewhere has been talking about 

diverting these things that are—that are, in fact, existing for dedicated exclusively for worker use to labor organizing. 

Mr. COPPESS. No. I mean, I can’t emphasize strongly enough that 

what we are talking about here is application to e-mail of exactly 

the line of bulletin board cases that Congressman Byrne was talking about. And the problem arose in the first instance, because the 

Seventh Circuit in Guardian Industries reacted to what all we 

labor lawyers understood to be the law, was that don’t tell those 

employees that they can put up sales notices on your bulletin board 

or picnic notices or anything like that, because the law will be, if 

you let them do that, they can put up union notices. 

And the Seventh Circuit in Guardian Industries said, well, why 

is that? Maybe you are using the word discrimination in a way we 

don’t understand. Maybe you need to explain the particular NLRA 

meaning of it, which is the case. They use the word discrimination 

in a particular way that traces its way back to Republic Aviation, 

and that is what you have at issue in the e-mail cases. 

If an employer in— 

Chairman ROE. Mr. Coppess, could you wrap up? Because the 

time is expired. 

Mr. COPPESS. Yes. Actually, it was the subject of a lot of questions, so I will try and do it real fast. But if the employer restricts 

the use of e-mail to nothing but business use, they can do that. 

They do, in fact, do that, but if, in some fantasy world, someone 

did do that, it would not be illegal. 

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Mr. HOLT. And it is basically a null set. 

Chairman ROE. Gentleman’s time has expired. 

I will now finish the questioning. Mr. King, I know that you 

mentioned—and this case should be the—the Noel Canning case 

should come up within a week or two, I think, the ruling. And it 

is a huge ruling. And I completely agree with you. How long, if you 

have a client that now has 380 cases in front—and you mentioned 

one client that thousands of days, years, to get to conclusion, that 

uncertainty creates a real problem for business out there going forward, expanding and growing their business. 

I completely agree with you. What we expect of the NLRB is 

that, look, they should be a fair arbiter. Just like when you play 

in an athletic game, you know what the rules are, both teams know 

what the rules are, what the rules have been for 30 years. And my 

question to you is, how long would it take? And then, secondly, if 

the NLRB is not looking to change all these, why are they requesting amicus briefs to come before that, if they don’t—if it is established policy, why are you fooling around with it? 

Mr. KING. I wish I could answer your last question. I don’t know 

what the intent is. I can only react to what the agenda is. One has 

to question whether this accelerated agenda is perhaps being pursued because we are in an election year environment and that the 

agenda will be pursued aggressively before November and/or that 

one of the members of the board’s term expires in December this 

year. 

But back to predictability. Mr. Coppess and I do agree amicus 

briefs make sense, but there have been significant cases overturned. And they are attached to my testimony, one of which, 

WKYC–TV, overturned 50 years of precedent, Democrat and Republican boards repeatedly, with respect to dues checkoff. So it 

would not be accurate to say that precedent has not been overturned. It has been overturned consistently. 

Your initial question, Mr. Chairman, if it took the NLRB over 

three years in New Process Steel, where we only had 100 cases 

coming back, and we have at least on a 20-year look back—and we 

have done extensive research on this—4,000 cases, you can start to 

do the math. 

Now, there is also a very important distinguishing characteristic 

that Mr. Coppess did not share with us, is that the New Process 

Steel cases, the 100 that came back, were by unanimous decision 

of a two-member board. They did not overturn precedent. They had 

no controversy associated whatsoever. 

We are talking about an inventory of cases here, Mr. Chairman, 

in part that are highly controversial—they are attached to my testimony—that will take a period of time. So back to your initial 

question and conclusion. We have at least one case, the Roundy’s 

case, that has been pending before this board for 2,582 days, over 

seven years. We have 383 cases that are pending for a long period 

of time. Why isn’t that the first priority of this board? 

Chairman ROE. And I would argue there are businesses out there 

that are yearning for a decision. Mr. Borden, I want to ask you. 

And I think this is hugely important, the new media and the way 

we communicate now. It has completely changed. Just ask the post 

office if new media hadn’t changed their business model. 

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In Register-Guard, the NLRB held that employees have no statutory right to use employer e-mail systems for Section 7. What are 

Section 7 activities? 

Mr. BORDEN. Section 7 of the National Labor Relations Act is essentially the heart of the act. It is what allows employees the right 

to form, join or explore union representation, to bargain through 

representatives of their choosing, to act in other concerted ways for 

their mutual aid and protection, as well as the right of employees 

to refrain from participating in all of those activities. 

And that is essentially what the board dissent in Register-Guard 

wanted to use as the foundation for this right of employees to use 

an employer’s e-mail system no matter what the employer’s perspective on restriction of that system would be. If the issue were 

truly as simple as it has been presented today by Mr. Coppess, it 

may even be more troubling, because there would be absolutely no 

reason for the board to solicit amicus briefs in this issue. They 

would just be relying on the Register-Guard decision. 

Chairman ROE. One just very quickly, because my time is getting 

close to it. I have an office, 125,000 square foot office building, that 

we contract out to get cleaned. I might not like the cleaning in one 

section. This is a contractor that I have a relationship with. And 

I say, look, this is not getting done over here. It is the same person 

cleaning it. If they get fired, am I now responsible for that person? 

Did I have control over what happened? Because that is what I 

think that I am hearing you say, is they are trying to do with this 

ruling. 

Mr. PUZDER. I would hope that is not the case—I would hope 

that wouldn’t be the case. And I think a key determinant would be, 

when you had a problem, you went to the contractor, you didn’t got 

the contractor’s employees. 

Chairman ROE. That is correct. 

Mr. PUZDER. And it is the same thing, if we have a problem with 

a franchisee, we go to the franchisee, not the franchisee’s employee. 

So I would hope that situation would never be covered, even if 

there is a rule change. 

Chairman ROE. Well, I have to gavel myself. My time has expired. 

Mr. Tierney, closing remarks? 

Mr. TIERNEY. Well, fine, I was going to do this in closing remarks. I was going to ask for five more minutes to do that, but, 

look, I just know that we have been making a comparison here 

today that if we could change the committee’s function off of trying 

to usurp a decision by the board that hasn’t been made yet, we 

could talk about raising the minimum wage, which in your district, 

Mr. Chairman, would be 67,000 people getting a boost, in my district, 41,000, and that would be a good discussion for us to have. 

You could tell us why that shouldn’t be. We could explain why it 

would be important. 

But I want to talk a little bit about why the National Labor Relations Board is involved in reviewing cases at all. One of my colleagues said, why are they even reviewing it? Our witness, Mr. 

Coppess, did note that in the preamble to the National Labor Relations Act, it observed that the inequality of bargaining power between employees who do not possess full freedom of association or 

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actual liberty of contract and employers who organize in the corporate or other forms of ownership association depress wage rates 

and the purchasing power of wage earners in industry. So that is 

a concern on that. 

And I think when we have even people like the International 

Monetary Fund and others decrying the inequity and inequality 

that is now in our economy and saying this is not good for democracy, this creates instability, this tampers down mobility, that we 

know we have a problem in that regard. Economists of all persuasions are telling us and speak to the fact that the reasons that we 

have growing inequality, one of the major reasons is a decrease in 

organized labor membership and the lack of employee bargaining 

power, and that has caused wage stagnation. When wages are stagnant for one group of people, they tend to take away the incentive 

for employers to keep pace and have their pay system be more robust. 

So one of the things that the preamble to the National Labor Relations Board cites as what would be a solution to that—and is also 

in our witnesses’ testimony—is that they would encourage the 

practice and procedure of collective bargaining and protect the exercise by workers of the full freedom of association, of self-organization, and designation of representatives of their own choosing for 

the purpose of negotiating the terms and conditions of their employment. 

And that is the whole idea. This Act is set here so that people 

can negotiate the terms of their employment and their conditions. 

If an employee can’t get to the table, the person who is actually setting those terms and conditions, that right is defeated. The National Labor Relations Board has an obligation, I would think, to 

take a look into why would that be? 

If you have an employer who is making—who is saying to you 

at the table, well, I don’t really make that decision, I am just a 

subcontracted third party and I have hired you, but it is really the 

guy that contracted to me that is making the decisions, but he is 

not at the table, it defeats that whole purpose of the National 

Labor Relations Board, which is to make sure that people can negotiate the terms and conditions of their contract. I think that is 

what the board in at least one case is going to try to get at. What 

would be the standard that we set to enable people to make that 

decision? 

So there is a purpose for the National Labor Relations Board. 

There is a purpose as to why they review these cases, and that is 

to make sure that employees have the full benefit of what the law 

intended, their ability to negotiate with the persons making the decisions on the terms and conditions of their employment. 

In that sense, I think it is important for the board to take in all 

the information it can possibly take in and make a consideration 

of how that purpose of the statute is best accomplished. And I hope 

the board will do that. I suspect they would. I have seen—I heard 

nothing today that would lead me to believe that they won’t. 

And again, I think that I wish that we had a hearing on some 

of the other things that are pressing about equal pay for equal 

work, about raising the minimum wage, about conditions in the 

workplace and so on, on that, but I hope, Mr. Chairman, we will 

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get to those things sooner, rather than later, and I thank you for 

the opportunity to close. 

Chairman ROE. Thank you very much. And I appreciate very 

much, the panel has been excellent as usual. And I think this—we 

did have every reason to bring up the issues with the NLRB with 

this hearing today. And let me go over just why I believe that. 

Mr. Wilson mentioned at the beginning that the NLRB basically 

tried in South Carolina, in Charleston, South Carolina—I have 

been to that plant down there—to close a plant that had 1,000 people working, South Carolinians working, making good money and 

supporting their families, along with all the other thousands of jobs 

that went along with that. That was beyond me. Not a single person in Everett, Washington, lost their job. Not anybody did. As a 

matter of fact, we are adding jobs with the Dreamliner that they 

are currently building. Great company, Boeing, and they were able 

to go to a right-to-work state and expand their business there and 

to make money for Americans and to expand opportunity. 

We have also seen this ambush election, where the average election median time is 35, 37, 38 days for an election. It is not a long 

time at all. Both employees and employers need time. I could not 

in my business in one week get a labor lawyer like you up to speed 

with my needs, and these elections could occur in as little as 10 

days. That is activist, folks, when you do that. 

And I can tell you, a lot of things that are done quickly like that 

are done poorly. They need to be thought-out, well-thought-out. 

And the micro unions, I don’t know how in the world you would 

run a retail business with five, six, eight, 10, 12, 15 unions in that 

business with different bargaining units that you would have to go 

to. That is activist, and that is why we should be here today hearing this. 

I think free speech, the secret ballot protection, I can’t think of 

anything in America more precious than a secret ballot, being able 

to vote for who you want to. And I say this as a joke. It is not. The 

secret ballot—my wife claims she votes for me. I don’t know that 

she does, because it is a secret ballot. She claims she does. 

That is why it is important to have that protection for that employee, for every person in this country is elected—Mr. Tierney was 

elected like that. The President and the United States, the president of the unions are elected like that. We should protect that 

right. 

I put on a uniform. I left this country 41 years ago to serve near 

the demilitarized zone in Korea for people to have that right. I 

think also that—and there is income inequality. I agree with you 

completely on that. I think the problem is the skills gap in this 

country. We traveled around—we had CODEL—a couple of weeks 

ago. And you look at—and Southeast Asia. 

I look in my own district where I live, there is one county we 

have, and it is not a large county, with 1,000 jobs open today. One 

is in a manufacturing plant that has 50 jobs open today, and they 

don’t have the skills to line up. And so we have to—and that is 

what this particular committee is very, I think, committed to, is 

closing that skills gap so we have workers that match up with the 

high-tech jobs of today. So that is an issue, I think. 

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And Mr. Puzder, I don’t know how many or what percent of the 

people in this country have entered the workforce through a 

Hardee’s, a McDonald’s, or any of the other number of franchisees. 

It is a huge percentage, I have read it. And these people that go 

on to be CEOs of companies and—you mentioned the—look, I want 

everybody to make more money. I think that is a good thing. I 

agree with that. But you can’t just pay more people. You have to 

have somebody who earns that money. 

And if you want to make these things affordable for the people 

that go in, that buy it, and I think that one other thing we can do 

in this single most important thing, I think, in America today that 

affects the people around the kitchen table, where I live, is the 

price of energy. When the price of energy goes up, everybody goes 

up. I mean, it is—and when someone is on a fixed-income—and I 

live in an area of Tennessee that is a very low-income—our median 

income is not as high as it is in America. And when you see the 

price of a gallon of gasoline go to $4.00 or 4.50 a gallon, when you 

are on a fixed-income like my mother is and like a lot of elderly 

people are, it affects the food they buy, everything they purchase. 

So the thing we can do is get a coherent energy policy in America 

that makes sense, that lowers energy, makes us energy independent, and will make us free of the Middle East. I think you can 

do more for the American people by doing that and their jobs than 

anything I can think of right now. 

And I would like to work with Mr. Tierney and the other side 

to do just that. And we could start by approving the Keystone pipeline. I think that would help immediately. We could reduce our consumption of Middle Eastern oil by almost half by doing that one 

step. 

I think it has been a great hearing. And, Mr. Tierney, welcome 

to the committee, a great addition to the committee. I appreciate 

your being here. 

With no further business, this hearing is adjourned. 

[Additional Submissions by Mr. Tierney follow:] 

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[Whereupon, at 11:43 a.m., the subcommittee was adjourned.] 

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