U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

66–429 PDF 2011

CORPORATE CAMPAIGNS AND THE NLRB: THE 

IMPACT OF UNION PRESSURE ON JOB CREATION 

HEARING 

BEFORE THE

SUBCOMMITTEE ON HEALTH, 

EMPLOYMENT, LABOR AND PENSIONS 

COMMITTEE ON EDUCATION 

AND THE WORKFORCE 

U.S. HOUSE OF REPRESENTATIVES

ONE HUNDRED TWELFTH CONGRESS 

FIRST SESSION 

HEARING HELD IN WASHINGTON, DC, MAY 26, 2011 

Serial No. 112–24 

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 
(II) 

COMMITTEE ON EDUCATION AND THE WORKFORCE 

JOHN KLINE, Minnesota, Chairman 

Thomas E. Petri, Wisconsin 

Howard P. ‘‘Buck’’ McKeon, California 

Judy Biggert, Illinois 

Todd Russell Platts, Pennsylvania 

Joe Wilson, South Carolina 

Virginia Foxx, North Carolina 

Bob Goodlatte, Virginia 

Duncan Hunter, California 

David P. Roe, Tennessee 

Glenn Thompson, Pennsylvania 

Tim Walberg, Michigan 

Scott DesJarlais, Tennessee 

Richard L. Hanna, New York 

Todd Rokita, Indiana 

Larry Bucshon, Indiana 

Trey Gowdy, South Carolina 

Lou Barletta, Pennsylvania 

Kristi L. Noem, South Dakota 

Martha Roby, Alabama 

Joseph J. Heck, Nevada 

Dennis A. Ross, Florida 

Mike Kelly, Pennsylvania 

George Miller, California, 

Senior Democratic Member 

Dale E. Kildee, Michigan 

Donald M. Payne, New Jersey 

Robert E. Andrews, New Jersey 

Robert C. ‘‘Bobby’’ Scott, Virginia 

Lynn C. Woolsey, California 

Rube ́n Hinojosa, Texas 

Carolyn McCarthy, New York 

John F. Tierney, Massachusetts 

Dennis J. Kucinich, Ohio 

David Wu, Oregon 

Rush D. Holt, New Jersey 

Susan A. Davis, California 

Rau ́l M. Grijalva, Arizona 

Timothy H. Bishop, New York 

David Loebsack, Iowa 

Mazie K. Hirono, Hawaii 

Barrett Karr, Staff Director 

Jody Calemine, Minority Staff Director 

SUBCOMMITTEE ON HEALTH, EMPLOYMENT, LABOR AND PENSIONS 

DAVID P. ROE, Tennessee, Chairman 

Joe Wilson, South Carolina 

Glenn Thompson, Pennsylvania 

Tim Walberg, Michigan 

Scott DesJarlais, Tennessee 

Richard L. Hanna, New York 

Todd Rokita, Indiana 

Larry Bucshon, Indiana 

Lou Barletta, Pennsylvania 

Kristi L. Noem, South Dakota 

Martha Roby, Alabama 

Joseph J. Heck, Nevada 

Dennis A. Ross, Florida 

Robert E. Andrews, New Jersey 

Ranking Minority Member 

Dennis J. Kucinich, Ohio 

David Loebsack, Iowa 

Dale E. Kildee, Michigan 

Rube ́n Hinojosa, Texas 

Carolyn McCarthy, New York 

John F. Tierney, Massachusetts 

David Wu, Oregon 

Rush D. Holt, New Jersey 

Robert C. ‘‘Bobby’’ Scott, Virginia 
(III) 

C O N T E N T S 

Page 

Hearing held on May 26, 2011 ............................................................................... 1 

Statement of Members: 

Andrews, Hon. Robert E., ranking minority member, Subcommittee on 

Health, Employment, Labor and Pensions ................................................. 4 

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

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

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

Wilson, Hon. Joe, a Representative in Congress from the State of South 

Carolina, prepared statement of .................................................................. 6 

Statement of Witnesses: 

Bego, David A., president and CEO, Executive Management Services, 

Inc. ................................................................................................................. 7 

Prepared statement of ............................................................................... 9 

Fisk, Catherine L., chancellor’s professor of law, University of California, 

Irvine .............................................................................................................. 36 

Prepared statement of ............................................................................... 38 

Fritts, Jonathan C., partner, Morgan, Lewis & Bockius LLP ...................... 45 

Prepared statement of ............................................................................... 47 

Karnas, F. Chet, president and owner, Lone Sun Builders, Inc., on behalf 

of Associated Builders and Contractors ...................................................... 26 

Prepared statement of ............................................................................... 28 

Additional Submissions: 

Mr. Andrews: 

Cincinnati Post article, ‘‘Justice for Janitors,’’ July 31, 2007 ................ 86 

Indianapolis Star article, ‘‘Pay and Hours Improve for Indianapolis 

Janitors,’’ April 20, 2008 ....................................................................... 87 

Indianapolis Clergy Committee, statement of principles ....................... 87 

Executive Management Services, Inc., employee manual for hourly 

employees ............................................................................................... 91 

Chairman Roe: 

Ritsema, Bill, president, Ritsema Associates: 

Prepared statement of ....................................................................... 76 

Additional materials .......................................................................... 78 

Questions submitted from Hon. Martha Roby, a Representative in 

Congress from the State of Alabama ................................................... 106 

Response from Mr. Fritts to questions submitted .................................. 108 

(1) 

CORPORATE CAMPAIGNS AND THE 

NLRB: THE IMPACT OF UNION 

PRESSURE ON JOB CREATION 

Thursday, May 26, 2011 

U.S. House of Representatives 

Subcommittee on Health, Employment, Labor and Pensions 

Committee on Education and the Workforce 

Washington, DC 

The subcommittee met, pursuant to call, at 10:00 a.m., in room 

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

the subcommittee] presiding. 

Present: Representatives Roe, Wilson, Thompson, Walberg, 

DesJarlais, Hanna, Rokita, Bucshon, Noem, Andrews, Kucinich, 

Kildee, Hinojosa, Tierney, Holt, and Scott. 

Also Present: Representatives Kline, Gowdy, and Miller. 

Staff Present: Katherine Bathgate, Press Assistant/New Media 

Coordinator; Casey Buboltz, Coalitions and Member Services Coordinator; Ed Gilroy, Director of Workforce Policy; Benjamin Hoog, 

Legislative Assistant; Marvin Kaplan, Professional Staff Member; 

Barrett Karr, Staff Director; Ryan Kearney, Legislative Assistant; 

Brian Newell, Deputy Communications Director; Krisann Pearce, 

General Counsel; Molly McLaughlin Salmi, Deputy Director of 

Workforce Policy; Ken Serafin, Workforce Policy Counsel; Linda 

Stevens, Chief Clerk/Assistant to the General Counsel; Loren 

Sweatt, Professional Staff Member; Aaron Albright, Minority Communications Director for Labor; Kate Ahlgren, Minority Investigative Counsel; Tylease Alli, Minority Hearing Clerk; Jody Calemine, 

Minority Staff Director; John D’Elia, Minority Staff Assistant; 

Brian Levin, Minority New Media Press Assistant; Jerrica Mathis, 

Minority Legislative Fellow, Labor; Richard Miller, Minority Senior 

Labor Policy Advisor; Megan O’Reilly, Minority General Counsel; 

Julie Peller, Minority Deputy Staff Director; and Meredith Regine, 

Minority Labor Policy Associate. 

Chairman ROE. A quorum being present, the Subcommittee on 

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

Good morning, everyone. 

And welcome to our witnesses. And thank you for joining us 

today. 

Today, we will examine the role of the National Labor Relations 

Board in corporate campaigns. 

I realize this is a general definition of the term, but a corporate 

campaign is a union effort to disrupt the employer’s routine busi-
2 

ness. The campaign can take the form of negative advertising, complaints against employers with various government agencies, and 

can even include appeals to political and religious leaders to put 

pressure on a targeted employer. 

The intent of these tactics is to undermine the reputation as well 

as break the will of an employer who refuses to accept union demands. In some cases, an employer can either concede to the demands that may undermine the success of his or her business or 

accept public contempt, government penalties, outside interference, 

and extraordinary litigation costs. Regardless of the potential outcomes, these campaigns can have a detrimental impact on the business’ bottom line and threaten the livelihoods of its workers. 

Over the years, the use of corporate campaigns has accelerated. 

According to one study, between 1974 and 1999, only 200 corporate 

campaigns were identified. Yet, in 2005, it was estimated that between 15 and 20 corporate campaigns were under way at any given 

time. 

And, recently, the NLRB has taken a number of steps to expand 

the arsenal of tactics available for a corporate campaign. The Board 

has removed bannering restrictions previously placed on boycotts of 

neutral employers. Employees of on-site contractors have been 

granted greater access to the property of the contracting employer 

connected to an organizing activity. The Board has also requested 

briefs that would allow even greater access to an employer’s property. 

In one case, the Board moved to uphold an election tainted by 

intimidation of workers because the intimidation originated with 

nonparties to the election. According to the Board’s logic, the outcome of an election can be overturned only when the threats by 

nonparties are ‘‘so aggravated as to create a general atmosphere of 

fear and reprisals, rendering a free election impossible,’’ end quote. 

Who will determine when a, quote, ‘‘general atmosphere of fear 

and reprisals,’’ end quote, exists? The worker who receives an 

anonymous call at their home or hears a voice promising to get 

even if the worker opposes union representation? Or a Federal bureaucrat? 

Actions taken by the Federal Government can send shockwaves 

across the country. At a time when our economy is struggling to 

get back on its feet and millions are desperate for jobs, employers 

and workers are paying close attention to the actions taken by 

leaders here in Washington. Policymakers in the Nation’s capital 

must understand that even the most modest action can have a dramatic effect on our economy. 

The action taken by the NLRB against the Boeing Company is 

a good example. While the facts are still in dispute, the outcome 

of the case may significantly alter the manner in which employers 

invest in our economy and our workforce. I recognize the case is in 

the early stages of what will be a costly litigation, but I wonder if 

anyone seriously doubts the tremendous implications this case 

poses to our workforce and could possibly deny Congress’ responsibility to consider those implications, ask questions, and determine 

what is the best interest of our workers and their families. 

Although this is just one of many cases presented to the NLRB, 

we must remember the Board does not operate in a vacuum. It is 
3 

an arm of the Federal Government, and its decisions govern virtually every private workplace in the Nation. That is a tremendous 

power that comes with great responsibility to act on behalf of the 

public good. I am concerned that the Board has jettisoned this responsibility over the last 2 years in favor of an activist agenda designed to advance the cause of big labor over the rights of everyday 

workers. 

The committee has pledged to make job creation and American 

competitiveness the leading priorities. We have a job to do, and it 

includes overseeing the various boards, agencies, and departments 

within our jurisdiction to ensure that they do not undermine the 

strength of our workforce. Today’s hearing is an important part of 

that effort. 

I would like to thank you all, the witnesses, again for your participation and will now yield to Mr. Andrews, our senior Democratic member of the subcommittee, for his opening remarks. 

Mr. Andrews? 

[The statement of Chairman Roe follows:] 

Prepared Statement of Hon. David P. Roe, M.D., Chairman, 

Subcommittee on Health, Employment, Labor and Pensions 

Good morning everyone. Welcome to our witnesses; thank you for joining us today. 

Today we will examine the role of the National Labor Relations Board in corporate campaigns. I realize this is a general definition of the term, but a corporate 

campaign is a union effort to disrupt an employer’s routine business. The campaign 

can take the form of negative advertising, complaints filed against employers with 

various government agencies, and can even include appeals to political and religious 

leaders to put pressure on a targeted employer. 

The intent of these tactics is to undermine the reputation as well as break the 

will of an employer who refuses to accept union demands. In some cases, an employer can either concede to demands that may undermine the success of his or her 

business, or accept public contempt, government penalties, outside interference, and 

extraordinary litigation costs. Regardless of the potential outcomes, these campaigns 

can have a detrimental impact on a business’ bottom line and threaten the livelihood of its workers. 

Over the years the use of corporate campaigns has accelerated. According to one 

study, between 1974 and 1999, only 200 corporate campaigns were identified. Yet 

in 2005 it was estimated that between 15 and 20 corporate campaigns were underway at any given time. And recently the National Labor Relations Board has taken 

a number of steps to expand the arsenal of tactics available for a corporate campaign. 

The board has removed bannering restrictions previously placed on boycotts of 

neutral employers. Employees of onsite contractors have been granted greater access 

to the property of the contracting employer connected to organizing activity. The 

board has also requested briefs that could allow even greater access to an employer’s 

property. 

In one case, the board moved to uphold an election tainted by intimidation of 

workers because the intimidation originated with ‘‘nonparties’’ to the election. According to the Board’s logic, the outcome of an election can be overturned only when 

the threats by nonparties are ‘‘so aggravated as to create a general atmosphere of 

fear and reprisal rendering a free election impossible.’’ Who will determine when a 

‘‘general atmosphere of fear and reprisal’’ exists? The worker who receives an anonymous call at their home and hears a voice promising to ‘‘get even’’ if the worker opposes union representation? Or a federal bureaucrat? 

Actions taken by the federal government can send shockwaves across the country. 

At a time when our economy is struggling to get back on its feet and millions of 

Americans are desperate for jobs, employers and workers are paying close attention 

to the actions taken by leaders here in Washington. Policymakers in the nation’s 

capital must understand that even the most modest action can have a dramatic effect on our economy. 

The action taken by the National Labor Relations Board against The Boeing Company is a good example. While the facts are still in dispute, the outcome of the case 

may significantly alter the manner in which employers invest in our economy and 
4 

our workforce. I recognize the case is in the early stages of what will be costly litigation. But I wonder if anyone seriously doubts the tremendous implications this case 

poses to our workforce, and could possibly deny Congress’ responsibility to consider 

those implications, ask questions, and determine what is in the best interest of our 

workers and their families. 

Although this is just one of many cases presented to the NLRB, we must remember the board does not operate in a vacuum. It is an arm of the federal government, 

and its decisions govern virtually every private workplace in the nation. That is tremendous power that comes with a great responsibility to act on behalf of the public 

good. I am concerned the board has jettisoned this responsibility over the last two 

years in favor of an activist agenda designed to advance the cause of Big Labor over 

the rights of every day workers. 

The committee has pledged to make job creation and American competitiveness 

its leading priorities. We have a job to do and that includes overseeing the various 

boards, agencies, and departments within our jurisdiction to ensure they do not undermine the strength of our workforce. Today’s hearing is an important part of that 

effort. 

I would like to thank the witnesses again for their participation today, and will 

now yield to Mr. Andrews, the senior Democrat member of the subcommittee, for 

his opening remarks. 

Mr. ANDREWS. Good morning, Mr. Chairman. 

Good morning to the witnesses. 

And good morning, ladies and gentlemen. 

As I think about this hearing, I reflect upon a question that we 

should be asking, a question for which I think the answer is wellsettled, and some questions that we shouldn’t be asking. 

The question we should be asking is, how can we work together, 

as Republicans and Democrats, to address the problem that nearly 

15 million Americans are unemployed as we meet here this morning? How can we come together and find ways to improve our investment climate, our business climate, our labor climate, so that 

we can put Americans back to work? I think the chairman was correct in saying that that should be the major focus of the committee. 

I just regret the fact that it really hasn’t been. Not one jobs bill 

has come before this committee since January when the new majority took over. 

The second question that I think is a settled question is, when 

people in our system have a political dispute, when they disagree 

with each other over something, do they have the right to express 

themselves as to how they feel about that dispute? I think the answer is unequivocally, yes, they do, under the First Amendment of 

our Constitution, that if you hold strongly a political view, you 

have the right to express it. You certainly don’t have the right to 

stop someone else from expressing their view; you don’t have the 

right to defame someone. But you have the right to express your 

views. 

And some of the testimony we are going to hear this morning, 

I think, is actually an excellent example of the First Amendment 

at work, that you have one group that feels one way about a dispute and another group that feels another way about a dispute, 

and they take their disagreement to the public square and they 

make their point, and we settle our differences that way. 

So I think that this underlying notion that there is something 

unusual about political speech that involves a labor dispute is, in 

and of itself, unusual. I think the operating premise of our country 

is, people have the right to express themselves, and should express 

themselves, politically because it contributes to our dialogue. 
5 

And then there is the third question I don’t think we should be 

asking. The chairman said a few minutes ago about the Boeing 

case that the facts are still in dispute, I believe was the phrase 

that he used. Well, certainly, it is where the facts are in dispute 

that really needs to be noted. The facts are in dispute in front of 

an administrative law judge that will begin conducting a trial on 

June the 14th. 

So here is a situation where there is pending litigation before an 

administrative law judge, where the general counsel of the NLRB 

has made a decision to pursue an argument in that forum, and that 

argument is being vigorously defended by the other side in that 

forum. In the normal course of action, it would be that the judge 

who runs that forum would make a decision and the issue would 

run its course. If people disagree with the decision, they could take 

it eventually to the Federal court system, and the courts will decide 

who is right and who is wrong. And then we would have the opportunity to decide if we want to, in some way, alter or improve the 

law based upon the outcome of that decision. 

This is perhaps the most egregious example of putting the legislative cart before the litigation horse. There has been no decision 

in the Boeing case. The general counsel has pursued a claim; that 

claim will be litigated starting on the 14th of June, and a decision 

will be rendered. 

What I find the question is that we should not be asking is the 

question that, frankly, the chairman of the full committee and the 

chairman of the Committee on Oversight have been asking, which 

is for the general counsel to turn over his work product, his attorney deliberations, his trial strategy before the 14th of June. I think 

this is irregular. I think it is inappropriate. And I think that we 

should let the process go the way that it plays out. 

So we, Mr. Chairman, would rather this morning be talking 

about cooperating in ways that would create jobs, but we are once 

again having a hearing where we are rehashing some questions 

that I think have been settled and some questions that aren’t ours 

to settle. 

But, with that in mind, we are glad the witnesses are here, and 

we look forward to robust dialogue. And thank you for the hearing. 

Chairman ROE. Thank you to the ranking member. 

It is now my pleasure to introduce our distinguished panel of witnesses. First, let me turn to my colleague from Indiana, Mr. Rokita, 

to introduce our first witness. 

Mr. Rokita? 

Mr. ROKITA. Thank you, Mr. Chairman. 

It is my honor to introduce my friend and a great Hoosier, Mr. 

Dave Bego. 

Dave is the president and CEO and the founder of Executive 

Management Services in Indianapolis. He is an industry leader in 

the field of environmental workplace maintenance, which he founded in 1989. EMS prides itself on providing clients a single-source 

solution for commercial cleaning, facility services management, 

maintenance supply, security, and even landscaping. 

By 2006, EMS, Mr. Chairman, had grown to become a national 

company with approximately 5,000 employees servicing over 3,000 
6 

facilities. That same year, the SEIU started a corporate campaign 

to organize EMS employees, which only recently concluded. 

Given that experience, he has been able to share his story 

through his book, ‘‘The Devil At My Doorstep,’’ which, Mr. Chairman, he asks me about once a month if I have read it. I read most 

of it. But the fact is, Mr. Chairman, I have lived this story with 

Dave Bego. 

And I thank him for his leadership. Instead of cowering or not 

being able to afford the cost of his story, like so many captains of 

industry do, he took the offensive and filed what I believe to be 

over 30 pieces of litigation, at the administrative and other levels, 

to fight back, and he won every case. 

Thank you. I yield back. 

Chairman ROE. I thank the gentleman. 

And welcome, Mr. Bego. 

Mr. CHEt Karnas, our next witness, is the founder and president 

of Lone Sun Builders, Inc. Lone Sun Builders is a licensed general 

contractor located in Albuquerque, New Mexico, specializing in 

commercial construction and remodeling. In 2004, the United 

Brotherhood of Carpenters initiated a corporate campaign against 

Lone Sun Builders, mailing negative letters to his clients and 

bannering his work sites. 

Welcome. 

Ms. CATHERINe Fisk is professor at the University of California 

Irvine School of Law. Ms. Fisk is an expert in labor and employment law. She has authored three books: ‘‘Labor and Law in the 

Contemporary Workplace,’’ ‘‘Labor Law Stories,’’ and ‘‘The Working 

Knowledge: Employee Innovation and the Rise of Corporate Intellectual Property.’’ Ms. Fisk received her BA from Princeton University, JD from the University of California-Berkeley, and LLM from 

the University of Wisconsin. 

And welcome to the committee. 

Mr. JONATHAn Fritts is partner of Morgan Lewis’ labor and employment practice. Mr. Fritts’ practice encompasses a broad range 

of labor and employment law matters, with a particular emphasis 

on labor matters arising under the NLRA and the Railway Labor 

Act. He is regional co-chair of the American Bar Association Committee on Practice and Procedure under the NLRA and an adjunct 

professor at Georgetown University Law Center. Mr. Fritts received his BA from the University of Virginia and his JD from 

Georgetown University Law Center. 

Welcome to the committee. 

Pursuant to Committee Rule 7(c), all Members will be permitted 

to submit written statements to be included in the permanent 

hearing record. And, 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. 

[The information follows:] 

Prepared Statement of Hon. Joe Wilson, a Representative in Congress 

From the State of South Carolina 

Mr. Chairman, thank you for holding a hearing on corporate campaigns and the 

National Labor Relations Board. I would also like to thank Dave Bego, Chet Karnas, 

Jonathan Fritts, and Catherine Fisk for coming to speak with us this morning. 
7 

From the moment the 112th Congress began, one of the main focuses for House 

Republicans has been to address job creation and job growth. Earlier this month, 

the U.S. Department of Labor announced that the national unemployment rate is 

9.0 percent. This means over 13 million Americans are currently unemployed. That 

is why I am so concerned with the unemployment situation in our country, specifically in South Carolina. Recently, my home state has served as the center of a controversial holding involving the executive branch and a large manufacturer that has 

created thousands of jobs across the country. 

Businesses should have a right to contract where to work in the best interest of 

their shareholders and workers. We are now in an age that is unprecedented: the 

Boeing complaint is a threat to all right-to-work states, not just South Carolina. 

Being a right to work state means employees in those states can choose for themselves whether or not to join a union. The NLRB decided to file a complaint against 

Boeing on behalf of a union, the International Association of Machinists and Aerospace Workers District Lodge No. 751. The complaint alleges Boeing ‘‘transferred 

work’’ of its 787 Dreamliner assembly line from Washington state to South Carolina. 

However, not one single union employee suffered a detriment due to Boeing’s decision to relocate. I believe this pursuit by the NLRB will be resolved quickly. 

I hope this hearing will provide clarity to these issues. I look forward to hearing 

what you all have to say on how we can move forward to focus on creating a climate 

that promotes job growth and job creation. 

I would like to ask a question of Mr. Fritts: 

1. In 2009, over 16,000 unfair labor practice charges were filed against employers. 

Approximately a third of the charges were found to have merit and only a portion 

of those resulted in an unfair labor practice conviction. How many unfair labor practice complaints have you defended? How many of those complaints were found to 

have merit? On average, how much does it cost an employer to defend an unfair 

labor practice charge? How can Congress stop frivolous administrative complaints? 

Chairman ROE. Now, before I recognize each of you to provide 

your testimony, let me briefly explain the lighting system. You will 

each have 5 minutes to present your testimony. When you begin, 

the light in front of you will turn green. When 1 minute is left, the 

light will turn yellow. And when your time has expired, the light 

will turn red, at which point I would ask you to wrap up your remarks as best you can. And the chair will try to do the same thing. 

After everyone has testified, Members will have 5 minutes to ask 

questions of the panel. 

And now we begin. I would like to recognize the witnesses. I 

would like to start with Mr. Bego. 

STATEMENT OF DAVID A. BEGO, PRESIDENT AND CHIEF EXECUTIVE OFFICER, EXECUTIVE MANAGEMENT SERVICES, INC. 

Mr. BEGO. Well, thank you, Chairman Roe, distinguished members of the committee. 

Todd, thank you very much. You stole about the first 1 minute 

of my speech. 

I thank you for having me here today. I think my story is not 

unique across this country. In fact, I think it is buried a lot. And 

I think everybody, including the people in this room, need to understand what happens with corporate campaigns. 

Before I go on, though, I would like you all to know that I am 

not anti-union. Before I started Executive Management Services in 

1989, I worked for an agribusiness company out of Fort Wayne, Indiana, where I ran soybean processing plants and feed mills and 

grain elevators for almost 8 years. And I was kind of their turnaround specialist; I would have to go into plants that were underperforming and fix them. 
8 

Invariably, what I found was that the processes, machinery, and 

everything was not the problem. The problem was, the people 

weren’t engaged. And I spent a lot of time working with the people, 

getting the management staff working with the people, cleaning up 

break rooms and locker rooms, and turning the workforce around. 

Now, the key to this: Every one of those plants were union 

plants—Teamsters, grain millers, and others. I never had any problems with the rank-and-file union members. What I am about to 

talk about in the corporate campaign is really about big labor. It 

is not the rank and file. 

As Todd said, I started the company in 1989. It was just myself 

and my wife, and we started out with a $30,000 investment in our 

savings account. And we progressed through the years, and, from 

my management style and perspective, in an entry-level-position 

company, which we are, we needed to take care of our employees. 

We started out offering health care and other benefits in the mid1990s. We continued to grow until, by 2005, at that point we were 

about 4,000 people in about 33 States. 

And then the devil knocked at my doorstep, in the form of the 

Service Employees International Union, the SEIU. I received a letter from them that they wanted to talk to me about the benefits 

they could bring. I had a meeting with them, and at the meeting 

all the guy would tell me was, ‘‘I want you to sign a neutrality 

agreement.’’ And for those of you who don’t know what a neutrality 

agreement is—and, by the way, he didn’t have one with him; he 

just wanted me to sign it. And I told him, ‘‘I have to read it first.’’ 

When he finally gave it to me about a month later, it is the genesis of the Employee Free Choice Act, card check. It has eliminated 

secret-ballot elections, has a gag order on the employers, expedites 

arbitration and contract negotiation. And one of the most fundamentally onerous provisions I have ever seen is you have to give 

a list of all your employees and their home addresses. Because it 

reverts to card check, that is so they could go and beat on their 

doors and intimidate them into signing cards. 

And if you don’t think it is true, I invite you to read my book 

and the stories that are in it about it, because they did it to some 

of my employees anyway. I wrote the book because I was appalled 

at the tactics and the ruthlessness that they used against my employees, my customers, my company, and my family. 

You have to understand something about this. Corporate campaigns, for the most part, are not because the employees invited 

the unions to come in. And I would guess somewhere in the 90-percent-plus range. It is a business model. What they do is they target 

an area like ours, in 2005-2006, it was Indianapolis, Cincinnati, 

and Columbus, Ohio, and they also came after us in St. Louis and 

Pittsburgh. They look at it and say, ‘‘If we can organize this many 

janitors, we can make this much money off of it.’’ 

When I finally met with them the last time before the war started, I said, ‘‘Look, why don’t we just have an election?’’ And they 

said, ‘‘No, we don’t want to have an election. We want you to sign 

the neutrality agreement.’’ And an employee from the Service Employees International Union looked at me and he says, ‘‘Mr. Bego, 

you are not going to see the neutrality agreement, are you?’’ I said, 

‘‘I have no intention of signing it. It is morally wrong. I cannot take 
9 

my employees’ free choice away by eliminating the secret-ballot 

elections. If you are going to have an election, fine.’’ He said, no. 

He looked at me and said, ‘‘We enjoy conversation, but we embrace 

confrontation. We are going to attack you, your employees, and 

your customers in the next 90 days.’’ 

That was a 5-year war that we won. And you know something? 

Today, our employees enjoy better wages and better benefits. They 

don’t pay union dues. And I feel sorry for all my competitors who 

gave in and signed, because I will tell you, they are sorry too. 

[The statement of Mr. Bego follows:] 

Prepared Statement of David A. Bego, President and CEO, 

Executive Management Services, Inc. 

CHAIRMAN ROE AND DISTINGUISHED MEMBERS OF THE COMMITTEE: My name is 

David A. Bego. For the past twenty (20) plus years, I have been the president and 

CEO of Executive Management Services, Inc. (hereafter, ‘‘EMS’’), a janitorial and facilities maintenance company headquartered in Indianapolis, Indiana, which I 

founded in 1989. I appreciate the invitation and the opportunity to speak to you on 

a topic on which I have, unfortunately, become quite familiar. From 2005 through 

2008, EMS was subjected to a vicious corporate campaign by the Service Employees 

International Union, Local 3, based, at the time, in Cleveland, Ohio. While the campaign ultimately failed, it was at a substantial cost, both in the financial sense, and 

in terms of reputational and relationship damage. In light of these experiences, I 

have become an advocate against forced unionism, against legislation providing political favor to labor unions, and against the current labor board’s agenda to empower Big Labor. 

Introduction 

I began EMS as a young entrepreneur with $30,000 and a dream of running a 

first-class company. Through hard work and good luck, EMS fulfilled my dream. 

EMS now has approximately 4,000 employees, maintains branch operations in twenty-two states, and services companies in thirty-eight states, as far east as New Jersey, and as far west as Utah. The EMS business model is to contract with companies for the provision of janitorial and maintenance services, to place our employees 

into customer facilities to provide such service, and to provide first class service 

through superior training and the proper tools and equipment. Unlike many of our 

competitors, our benefit is not necessarily reflected in the pricing. We do not cut corners to provide price advantages. Rather our edge is in our people, in the quality 

of our services, and in our ability to meet almost any customer need. 

Our company is unique in that, in addition to standard office cleaning, we also 

provide such services in industrial and other environments with unique needs. We 

provide our services in steel mills, in processing plants, in laboratories and medical 

offices, and in educational settings, in addition to the standard commercial office environment. 

We are on the forefront of the ‘‘green’’ movement. EMS is one of only two companies headquartered in the state of Indiana to obtain the GS-42 certification for 

green cleaning from ‘‘Green Seal,’’ a non-profit organization devoted to setting environmental standards for cleaning, and promoting the use of environmentally responsible products, as well as providing education and training on environmentally 

friendly cleaning services and products. Such certification assures its customers that 

EMS is on the forefront of providing healthy and environmentally friendly services. 

I am not a person who is anti-union by nature. Nor am I one who believes that 

labor unions have necessarily exhausted their usefulness. Prior to my founding of 

EMS, I was employed by Central Soya as a supervisor in an experimental feed mill. 

As supervisor, I often supervised union employees. My perspective was that it did 

not matter whether the employees were union or not. To operate the mill effectively, 

the employees needed a clean and safe working environment, they needed to be 

treated fairly, and they needed to have the belief that management respected them. 

This philosophy served me well, as I was recognized as an individual with a unique 

ability to turn around problem mills and make them highly productive. In retrospect, perhaps this ‘‘ability’’ was not unique at all, rather just a philosophical belief 

in abiding by the ‘‘Golden Rule.’’ Such treatment should be applied to all employees, 

union or not. For purposes of full disclosure, I believe that there are situations, particularly where employees are in work environments, which involve substantial 

threats to their safety or health, that labor unions fulfill a great need to maximize 
10 

1The Neutrality Agreement presented to Executive Management Services by the SEIU Local 

3 for signature is enclosed as Attachment 1. EMS has obtained copies of other Neutrality Agreements entered into by the SEIU, and all are in substantially the same format as Attachment 

1. 2The Union Authorization Card utilized by the SEIU local 3 is enclosed as Attachment 2. 

worker safety. However, the existence of a union alone does not necessarily make 

one position better than an equivalent position without union representation. 

Unfortunately, events that have transpired over the past five to six years have 

made me aware of the efforts of certain labor unions attempt to impose forced unionism. This is an effort by labor unions, not to organize employees based on employee needs, but rather to organize companies, or at a minimum, subdivisions of 

a company, for the purpose of increasing membership and, ultimately, the union’s 

political power. While the union rhetoric remains that they are acting for the benefit 

of the employee, their actions clearly indicate they are not. To be perfectly clear— 

this practice of forced unionism is one to which I am very much opposed. 

Forced Unionism and the Push for EFCA 

A labor union’s attempt at forced unionism is based on a business model. This 

model includes identification of a geographic area, identification of the potential 

business targets in that geographic area, and analysis of the total number of potential ‘‘members’’ which the union may acquire. It is simple statistical analysis. In 

many, if not most, cases there is no attempt by any employee of the companies targeted to reach out to the labor union for assistance. 

Once the labor union has identified the scope of its target, its representatives then 

reach out to the companies to be impacted. The representative approaches a key executive of the employer in a relatively friendly matter, requesting a meeting. When 

they are granted this meeting, the labor union representative informs the company 

that it intends to unionize the workforce and that it wishes for the company to sign 

a ‘‘Neutrality Agreement’’ in which the company will agree to remain ‘‘neutral.’’ 1

The union’s definition of ‘‘neutrality’’ however, is surprisingly one-sided. Per the 

terms of the the agreement, the company is required to (1) produce the names of 

all of it’s employees and their contract information, (2) agree not to say anything 

negative about the union or otherwise interfere with their attempts to organize the 

company’s employees, and (3) agree to accept the union as the representative of the 

company if they produce authorization cards2 for more than fifty percent (50%) of 

the class of employees. This automatic recognition would be in lieu of the holding 

of a secret ballot election by the National Labor Relations Board, the federal agency 

charged with the oversight of labor matters and the administration of such representation elections. The system proposed in the neutrality agreement is very much 

like the ‘‘card check’’ legislation that has been proposed under the misnomer of the 

‘‘Employee Free Choice Act,’’ which has been before Congress on multiple occasions 

over the past several years, and which its proponents have been unable to pass. 

If the company refuses to sign the neutrality agreement, or if it otherwise takes 

action which the union finds, in its own definition, not to be ‘‘neutral,’’ the union 

begins to target the company through a variety of means, including smear campaigns, deceptive representations, filing of frivolous charges with government agencies, the targeting of the company’s employees and customers, and other actions ultimately designed to force the company to capitulate to the union’s demands. 

It does not make one bit of difference to the union who the company is, how well 

they treat their employees, how much better they pay their employees, or what benefits they provide. In short, the unions utilizing the forced unionization drives, ARE 

NOT, in any way, concerned with the best interests of the employees, and they are 

not motivated, by the ‘‘injustices’’ they allege to have been committed by the company. 

The SEIU at My Doorstep 

Prior to 2005, I would not have believed such a scenario to actually exist. In that 

year, however, the SEIU came to my doorstep. It began with calls in December of 

2005, and finally an arranged meeting with SEIU contract administrator Dennis 

Dingow in April 2006. Mr. Dingow provided the altruistic sales pitch of the SEIU— 

that they were interested in improving working hours and working conditions for 

janitors around the country. I pressed Mr. Dingow for details on the proposal he 

was setting forth. He was not forthcoming, but rather surprisingly evasive. I also 

asked for information as to which of our accounts the request for the union’s representation had come from. Mr. Dingow did not have an answer. To date, I have 

received no information which leads me to believe that any of our employees took 
11 

steps to affirmatively request the SEIU’s assistance due to any work condition, wage 

or benefit, or other condition of employment. 

I indicated to Mr. Dingow that he needed to provide me details of what the SEIU 

intended. He responded that they intended to organize all of the janitors in the Indianapolis area, and this included those employed by Executive Management Services, 

Inc. It was the desire of the SEIU that EMS be ‘‘neutral’’ in the process. I responded 

that I believed that EMS would be. Mr. Dingow indicated that by ‘‘neutral,’’ he 

meant that they wanted EMS to sign a neutrality agreement. 

As I researched the issue more carefully, spoke with advisors, and generally became more educated on the issue, it became clear to me that I simply could not 

agree to that which the SEIU was asking. First, I was not willing to give my employees confidential contact information to the SEIU. I was not sure if I could legally do so, and more importantly, I felt that the employees would be angered by 

the company divulging such information. I also feared that the union might abuse 

such information by contacting employees at inappropriate times, bothering those 

who may be uninterested through repeat contact, or placing undue pressure on the 

employee to commit to its cause. 

Second, it seemed clear to me that if the employees wanted to have a union, they 

could choose to do so through a secret ballot election, in much the same manner 

as traditional elections are conducted. In this manner, their votes would remain private and, more importantly, there wouldn’t be a concern as to whether the employees were being improperly persuaded or bothered. The system of ‘‘card check,’’ on 

the other hand, seemed to me to be both public and fraught with danger. Would 

organizers share the identities of employees who had abstained with those who had 

signed the cards? How would I know if organizers were harassing my employees? 

Would organizers attempt to meet them at their homes? While the rhetoric of the 

union is that they don’t commit any undue influence, only in an election atmosphere 

are there proper safeguards to ensure that such influence is not exerted. In short, 

in my attempt to do that which was in the best interest of the employee, I simply 

could not see how it would be to their benefit to risk subjecting them to undue pressure, and to unilaterally sacrifice their right to vote on whether to be represented 

by this labor union. 

There were additional conversations and meetings with Mr. Dingow. Ultimately, 

however, he recognized that I was not going to sign the Neutrality Agreement. I 

stated such, but also told Mr. Dingow on several occasions I was amenable to the 

SEIU petitioning for an election and would live with the results. It was at this moment that the relationship truly turned adversarial for the first time. Mr. Dingow 

stated to me, ‘‘Mr. Bego, we enjoy conversation but embrace confrontation. If you 

do not execute this Neutrality Agreement, we will begin to target you, your employees and your customers.’’ Needless to say, Mr. Dingow’s threat did not work. EMS 

did not capitulate, and a four-year, million-dollar battle ensued between EMS and 

SEIU ensued. 

On advice of our counsel, we instructed our managers to keep detailed records of 

the activities any organizing activity which occurred. We provided extensive training 

and instruction to our managers and supervisors on compliance with the National 

Labor Relations Act. Our various accounts were in close communication with our 

human resources department, and they, in turn, were in close communication with 

the executive staff and our legal advisors. What developed out of these efforts was 

a detailed record of the SEIU’s corporate campaign against EMS. In addition to the 

noisy rallies and constant handbilling which typically occasion these campaigns, the 

actions of the SEIU included: 

• From January 2007 to May 2008, the SEIU, not the employees of EMS, filed 

thirty-six unfair labor charges against EMS with the National Labor Relations 

Board. Approximately twenty-four of these were dismissed or voluntary withdrawn 

as having no merit. The remainder was resolved pursuant to a settlement agreement entered into between EMS and the SEIU (discussed further below). 

• The SEIU assisted in the filing of three complaints with the Occupational Safety and Health Administration (or the state equivalent agencies). Two of these complaints alleged acts against EMS in facilities in which we were not present. The 

third made allegations that EMS required its employees to dispose of human body 

parts from biological labs. This, of course, made our customer very worried and generated a phone call from the appropriate governmental agency. However, we were 

able to quickly resolve and dismiss the concern. 

• The SEIU paid religious leaders to support its cause, including distributing letters against EMS, holding rallies, and staging sit-ins and hunger strikes. At one 

point, this group of religious leaders requested that I meet with them. I did so, and 

found their motivations to be based on lack of knowledge and misinformation provided by the union. For example, this group believed that the wages and benefits 
12 

3 Attachment 3 consists of a photograph taken during the event of the SEIU’s balloon release 

in the atrium of a building in downtown Indianapolis. 4 Attachment 4 is a photograph of the banner hung from the rooftop of the corporate headquarters of Western Southern Insurance. ‘‘Justice for Janitors’’ is a reference to a campaign in 

which the SEIU, including SEIU Local 3, was involved. 5 A copy of one of the flyers alleging ‘‘civil rights abuses’’ is attached as Attachment 5. 

6See Attachment 6. 

7For more information on the book The Devil at My Doorstep, visit http:// 

www.thedevilatmydoorstep.com. 8The newspaper advertisement inviting the SEIU to engage in a secret ballot election is included as Attachment 7. 

provided by EMS to its employees were inferior to those, which had been secured 

by the SEIU to other accounts in the geographic area and in similar areas. Union 

contracts that have been obtained by EMS have proven this not to be the case. • Over a dozen members of the SEIU trespassed into one of the largest buildings 

in downtown Indianapolis, and one of the largest accounts of EMS, and caused to 

be released hundreds of purple balloons into the building’s five-story atrium.3

• The SEIU staged a lemonade stand on a public street at which they provided 

free lemonade to passer-bys if these persons would call the CEO of a customer of 

EMS and request that they cease business with EMS and find a ‘‘responsible’’ contractor. The SEIU even supplied the cell phone from which these calls were made. • The SEIU accessed the roof of the Western Southern Insurance corporate headquarters in Cincinnati, Ohio and hung a massive multi-story banner.4

• The SEIU filed frivolous charges with the NLRB, and then distributed fliers indicating that EMS was under investigation by the ‘‘federal government’’ for ‘‘unfair 

labor practices,’’ including the harassment and intimidation of its employees. • Distributed fliers making unsubstantiated allegations of civil rights violations.5

• The SEIU utilized religious organizations to interfere with the international 

business affairs of a customer of EMS, in an effort to pressure the customer cease 

business with EMS. This included paying for a disgruntled employee of EMS to be 

flown to London to embarrass the customer at an economic conference. • On Halloween night in 2007, the SEIU had children trick or treat in my residential neighborhood. The children were instructed to hand out fliers at each house 

they went to for candy. These flyers claimed that buildings cleaned by EMS were 

‘‘Houses of Horror’’ where employees were abused and mistreated every night.6

Meanwhile, union organizers were in cars driving the streets of my neighborhood! • Organizers continually harassed our employees trying to coerce them into signing union cards. • The SEIU Infiltrated local governments to obtain favorable decisions for the 

SEIU, and used politicians in an attempt to have EMS contracts canceled in favor 

of responsible contractors, a euphemism for union contractors. 

The details of the campaign are more fully set forth in my book, The Devil at My 

Doorstep.7 The examples above are but a small sampling of the hundreds of tactics 

we were forced to endure. By these examples, however, it is my hope to demonstrate 

the manner in which the SEIU utilized government agencies and the media in general to accomplish their own objectives. This campaign against EMS was a prime 

example of their utilization of the strategy of a ‘‘death by a thousand cuts.’’ 

It is important to understand that, throughout this process, I consistently communicated to the SEIU that EMS was happy to participate in an election. In June 

2007, I even took out an advertisement in the Indianapolis Star calling on the SEIU 

to either ‘‘Fish or Cut Bait.’’ 8 I did not want to continue through this campaign, 

and hoped that through the court of public opinion I could place pressure on them 

to agree to an election, in which I was confident the employees would choose not 

to go with the SEIU as their bargaining representative. This did not work, as the 

SEIU simply did not have any interest whatsoever in an employee election. 

On September 25, 2007, EMS was notified by a representative of the SEIU that 

seven of EMS’s workers several of which we believed to be union salts were going 

on strike—a first in the nearly twenty year history of EMS. Eventually a total of 

ten workers (out of approximately 350 in the Indianapolis area) went on strike, representing approximately three percent (3%) of our Indianapolis workforce. The notice indicated that the strike was due to unfair labor practices. We knew based on 

the activities of the union to date, that this was not true. 

The Involvement of the NLRB 

In May 2008, following nearly two (2) years of picketing, harassment, wrongful 

accusations, and defamatory language, I agreed to enter into a settlement agreement with the SEIU with an intent and hope of ending the entire campaign. Both 

EMS and the SEIU had filed unfair labor practices charges with the NLRB against 
13 

9The link for Judge Amchan’s decision may be found at Attachment 8. 30459, 25-CA-30485, 

25-CA-30486, 25-CA-30487, 25-CA-30489, 25-CA-30553, 25-CA-30537, 25-CA-30690, 25-CA30692, 25-CA-30693, 25-CA-30694, 25-CA-30695, 25-CA-30697, 25-CA-30698 (2009) at page 5. 

Further, Amchan wrote, ‘‘[the] record indicates at least several instance of outright fabrication.’’ 

Id. 

the other. By entering this agreement, the SEIU was agreeing to no longer picket 

or threaten to picket EMS in Central Indiana. EMS was required only to abide by 

the provisions of the National Labor Relations Act, which I believe had been done 

any way. In my mind, there was little reason not to enter this agreement. By the 

Agreement, there was no finding that EMS had engaged in any wrongdoing, and 

no admission by EMS as to such. Had either of these elements been a requirement 

of settlement, I almost certainly would not have agreed to execute the document. 

Entering the Settlement Agreement was simply an attempt to put the events of the 

corporate campaign behind me. 

Shortly after execution of the Settlement Agreement, however, I was notified by 

the union that eight (8) workers that had gone on strike were demanding reinstatement. Upon consultation with my attorneys, I refused. From the start, it was clear 

that the worker’s strike was a recognitional strike with economic motivations. The 

signs that were carried in the course of the picketing, and the handbills which were 

distributed, consistently made reference to ‘‘worker wages,’’ ‘‘health care,’’ ‘‘worker 

benefits,’’ and ‘‘working conditions,’’ or they made generally reference to EMS not 

being a ‘‘responsible’’ company. It was rare when a handbill referenced an unfair 

labor practice. The strike simply did not have a ‘‘unfair labor practice’’ component 

to it. 

Upon receiving notice of EMS’ refusal to reinstate the employees, the union again 

filed multiple unfair labor practice charges against EMS. We were comfortable that 

the NLRB would rule in our favor on the issue. The settlement agreement itself 

identified that the SEIU had engaged in illegal recognitional picketing when it had 

not filed a petition with the board to be recognized as the bargaining representative 

of the employees, and had set forth the union’s agreement not to engage in any further picketing of Executive Management Services in Central Indiana or engage in 

secondary boycotting against EMS where the purpose was to force EMS to recognize 

bargain with the SEIU. 

To our shock, the NLRB, an agency whose mission statement clearly states it is 

bound to protect the secret ballot election and administer the NLRA act fairly without prejudice to employees, employers and unions, agreed with the SEIU and the 

General Counsel filed charges against EMS for refusing to reinstate the employees 

in retaliation for their support of the union. It was the position of the NLRB that 

EMS had engaged in unfair labor practices, and that this—at least in part—motivated the employees to engage in a strike, and that because the strike was an unfair 

labor practice strike, the employees had the right to reinstatement. 

The position was absolutely preposterous. The SEIU had concocted an elaborate 

scheme involving the filing of a frivolous charges by organizers, not EMS employees, 

to convey the illusion of a multitude of ‘‘unfair labor practices’’ to support the notion 

that the strike was motivated by the unfair labor practices. Despite this, the NLRB, 

in the settlement agreement, had required the SEIU to no longer engage in illegal 

recognitional picketing and refrain from secondary boycotting. The NLRB was now 

reversing course and stating to EMS that it believed the picketing to have been motivated by unfair labor practices. 

I can only believe that the position taken by the NLRB was either motivated by 

bias by the General Counsel’s office in favor of the local union, or was the result 

of gross incompetence. In reviewing the numerous handbills and picket sign, there 

can be no doubt that the strike was an attempt for recognition by the union, and 

was economically motivated. The record from the hearing also shows that some of 

the striking employees produced affidavits indicating that no unfair labor practices 

had been committed. Nevertheless, the NLRB utilized their testimony in an effort 

to prove the unfair labor practices, despite their previous affidavits. 

Further, it was absolutely clear in speaking with the employees, that the strike 

was completely motivated by economics. The employees appeared to have been 

coached in to discuss unfair labor practices in their testimony. They made reference 

to ‘‘UPLs’’ and ‘‘unfair practice labors,’’ as if to indicate that they knew they were 

to say something to this effect, but not fully understanding what it meant. In the 

decision rendered by Administrative Law Judge Arthur Amchan, he wrote, ‘‘* * * 

at many points it is clear to me that the testimony of General Counsel’s witnesses 

is contrived and very likely to be untruthful.’’ 9 Executive Management Services, and 

Service Employees International Union, Local 3 and Service Employees Inter-
14 

10The link to the NLRB’s decision is found in Attachment 9. 

national Union, Local 1, Cases 25-CA-30221, 25-CA-30223, 25-CA-30226, 25-CA30266, 25-CA-30328, 25-CA-30392, 25-CAWhen Judge Amchan rendered his decision in favor of EMS, it was my belief that 

the ordeal was finally finished. Once again, I was to be surprised. Despite the overwhelming evidence to the contrary, and the convoluted and clearly false testimony 

of the NLRB’s witnesses, the General Counsel of the NLRB appealed Judge 

Amchan’s decision to the five-member NLRB in Washington. In June, 2010, Chairperson Liebman, along with members Schumber and Pierce, issued a decision in 

favor of EMS finding that the strike was not, in any way, motivated by unfair labor 

practices, and was instead only a strike motivated by a desire to force the company 

to recognize the SEIU as the bargaining representative of the employees.10

Current Actions of the NLRB 

As an individual who has witnessed first-hand the unsavory tactics employed by 

some labor unions in their corporate campaigns to force unionization on companies 

and their employees, I am troubled by the direction of the current labor board, their 

current path of implementing the agenda of big labor, and their unapologetic actions 

in contravention of the will of Congress. Over the past five to six years, Congress 

has failed to generate the support necessary to pass the disastrous Employee Free 

Choice Act (‘‘EFCA’’). The goal of EFCA was to provide labor unions the tools to bypass the secret ballot process to increase its struggling membership. The current 

labor board is accomplishing this goal through its rulemaking, overruling of case 

law precedent, and though the General Counsel’s issuance of enforcement directives 

to the NLRB field offices. Much of the action that has been taken is designed to 

provide labor unions with greater ability to pressure employers and their employees 

to execute neutrality agreements and check cards without consequence. The NLRB 

has recently issued rulings expanding their rights without running afoul of rules on 

bannering, secondary boycotting, and even the making of verbal threats. These actions are all designed to increase the labor union’s ability to utilize the card check 

process, rather than the traditional secret ballot. 

The question of why Congress left an exception to the secret ballot election open 

in the NLRA when it passed the Taft-Hartley amendment in 1947 should be considered. Was it to provide labor unions with an opportunity to run smear campaigns 

against employers in the form of corporate campaigns? Or was it, as the language 

suggests, simply an avenue left available to unions and employers that decided to 

work conjunctively for the employees? If it was the later, have we been faced with 

years of erroneous case law which has led us to where we are today? 

Of further concern are the various memorandums issued by the interim General 

Counsel, wherein he has sought to broaden the fines and penalties that are assessed 

in situations involving violations of the National Labor Relations Act. While these 

policies appear neutral on their face, they are in fact a sword to be used by big labor 

in its corporate campaign arsenal when organizing employers. As was seen in the 

case of EMS, the labor union never hesitated to use the process of filing unfair labor 

practice charges in an effort to exert pressure to make EMS capitulate with its demands. Despite the fact that the union was unsuccessful on all of its charges, there 

was no mechanism to deter such behavior. To date, there exist no penalties against 

either unions or employers for filing frivolous claims with the NLRB or any other 

administrative agency. Until such laws are enacted, it should be expected that the 

labor unions will continue to use all weapons in its arsenal, as it is in their business 

model to do so. 

Finally, I fine it unfortunate that Congress has continued to allow the National 

Labor Relations Act to function as a biased and politically motivated piece of legislation. The Act is a creature of the legislature. Rather than drafting the legislation 

in such a manner as to control the process, thereby removing politics from the equation, Congress has left the NLRB with a tremendous amount of authority to dictate 

the outcome of labor matters. It should, therefore, be expected that without implementation of the proper safeguards and controls, this trend shall continue. So long 

as politicians receive benefits from their friends in big labor, the NLRB can never 

be independent and free from political influence, and its integrity shall always be 

compromised. 

Thank you again for the opportunity to present this information to you today. I 

am happy to provide the Subcommittee with additional information that it may 

deem to necessary or helpful, and to answer any questions from the members. 
15 
16 
17 
18 
19 

ATTACHMENT 2
20 

ATTACHMENT 3
21 

ATTACHMENT 4
22 

ATTACHMENT 5
23 
24 
25 
26 

Chairman ROE. Mr. Karnas? 

STATEMENT OF F. CHET KARNAS, PRESIDENT, 

LONE SUN BUILDERS, INC. 

Mr. KARNAS. Chairman Roe, Ranking Member Andrews, and 

members of the Subcommittee on Health, Employment, Labor, and 

Pensions, good morning. And thank you for the opportunity to testify before you today. 
27 

In the interest of time, I request that my full testimony be included in the hearing record, please. 

My name is Chet Karnas. I am the president of Lone Sun Builders, a small framing and drywall subcontractor in Albuquerque, 

New Mexico. Lone Sun and its 55 employees are dedicated to providing quality work through ethical business practices, and we are 

very involved in our community. 

I also appear before you today on behalf of Associated Builders 

and Contractors. ABC represents more than 23,000 merit shop construction contractors, employing nearly 2 million workers. ABC’s 

membership is bound by a shared commitment of merit shop philosophy based on the principles of nondiscrimination due to labor 

affiliation and the awarding of construction contracts through competitive bidding. 

I also am a Board of Directors position at AGC of America, as 

well. 

Lone Sun Builders started as a small company. As we grew, we 

cultivated a family atmosphere in which workers were taken care 

of and fairly treated. Today, Lone Sun is one of the most well-respected contractors in the State. 

Despite our reputation, or perhaps because of it, we have been 

targeted over the years by unions, particularly the carpenters’ 

union. We have experienced corporate campaigns firsthand, during 

which unions engage in unethical coercion and intimidation in an 

attempt to smear responsible employers’ good names. 

In the construction industry, unions do this to pressure merit 

shop contractors to sign neutrality agreements or become union signatories. If these objectives fail—and they often do—they use these 

tactics to try to put contractors out of business. 

Lone Sun has battled the aggressive corporate campaign tactics, 

including bannering, for several years now. But prior to that, our 

company enjoyed a professional and respectful relationship with 

the unions for more than 20 years. We all lived and worked in the 

same community, so the relationship was courteous and professional. We were all stakeholders in our community. 

Eventually, the carpenters’ union decided to bring in organizers 

from other parts of the country, and the situation started to 

change. The carpenters’ organizers sent letters to our clients, as 

well as developers and general contractors, which stated the union 

had a labor dispute with us, and they wrongly and falsely claimed 

that we did not provide benefits to our employees, which we do. We 

refuted the claims and publicized our excellent benefits program. 

Rather than engage in an open and constructive dialogue, the 

union told us to expect continued harassment. 

In 2008, the aggressive bannering campaign started, where 

‘‘Shame On’’ banners appeared on approximately one dozen of our 

construction sites. The carpenters displayed these large signs in 

front of our clients’ buildings, emblazoned with inflammatory, unfounded claims about labor policies. And, on some projects, the client’s name on the banners had not even hired us; they were tenants having work performed by general contractors or building 

owners and had no relationship with the contractors. 

The following year, the union escalated its campaign, to include 

mass pickets at several large projects. These pickets included vul-
28 

gar chants, physical threats, name-calling, false accusations, trespass, blocking of egress and ingress. During the campaign, the carpenters showed up at a local church, where they disturbed services 

after repeated pleas to stop. They were eventually dispersed by the 

police at that event. 

Realizing that we needed to fight back to survive the union’s 

undue treatment, we embarked on a campaign of our own to protect our integrity and our reputation. We do have something to protect, and that is our reputation. 

We generated media interest and launched a blog chronicling 

Lone Sun’s experience with the carpenters’ corporate campaign. We 

also learned, doing that blog, that the union was hiring outside laborers to engage in this behavior, paying them low wages and no 

benefits. It is ironic that a company like ours that pays excellent 

wages and has benefits would be picketed by people that don’t have 

benefits and paid low wages. 

I firmly believe that our actions had a positive impact on the 

court of public opinion and it helped us avert complete disaster. 

But despite our efforts, business has still suffered, many clients 

were impacted, and many general contractors were reluctant to utilize our services, fearing the organizers’ aggressive and vulgar 

presence. We estimate that we have suffered about a 20 to 30 percent decline in sales directly due to the negative impact of the carpenters’ corporate campaign. 

As a responsible, ethical contractor with a workforce full of 

happy and well-compensated employees, I have to wonder, why us? 

Experience has taught me that I may never get the direct answer. 

All I know is that, as long as we remain defiant, the union seems 

ready to do anything it can to destroy our company’s reputation. 

On behalf of Lone Sun Builders and ABC, I would like to again 

thank the committee for holding today’s hearing. And I am pleased 

to see a renewed interest on Capitol Hill in the problems that corporate campaigns can cause for honest, hardworking merit shop 

contractors. I look forward to working with you on this issue. 

This concludes my formal remarks. Thank you. 

[The statement of Mr. Karnas follows:] 

Prepared Statement of F. Chet Karnas, President and Owner, Lone Sun 

Builders, Inc., on Behalf of Associated Builders and Contractors 

CHAIRMAN ROE, RANKING MEMBER ANDREWS AND MEMBERS OF THE SUBCOMMITTEE ON HEALTH, EMPLOYMENT, LABOR, AND PENSIONS: Good morning and 

thank you for the opportunity to testify before you today on ‘‘Corporate Campaigns, 

the NLRB and the Impact of Union Pressure on Job Creation.’’ 

My name is Chet Karnas. I am the president and owner of Lone Sun Builders, 

Inc., a small framing and drywall subcontractor based in Albuquerque, New Mexico. 

Lone Sun provides hands-on project management, qualified supervision, timely and 

cost-efficient scheduling, and a certified safety program. Our mission is, and always 

has been, to provide quality with integrity through ethical business practices. Lone 

Sun’s reputation is reinforced by our loyalty to and respect for our clients, vendors 

and, most importantly, our 55 employees. 

I also appear before you today on behalf of Associated Builders and Contractors 

(ABC). ABC is a national trade association representing more than 23,000 merit 

shop contractors that employ nearly two million workers whose training and experience span all of the 20plus skilled trades that comprise the construction industry. 

ABC’s membership is bound by a shared commitment to the merit shop philosophy. 

This philosophy is based on the principles of nondiscrimination due to labor affiliation and the awarding of construction contracts through competitive bidding based 

on safety, quality and value. 
29 

1 Incidentally, Lone Sun’s peers in the industry that are union signatories have stated that 

their benefits programs have become less solvent, with retirees being paid less as employer contributions are rising. In the area controlled today by the Southwest Regional Council of Carpenters, these contributions are scheduled to rise another .50 cents per hour by the end of 2011. 

Lone Sun Builders’ Battle with Corporate Campaigns and Bannering 

Lone Sun Builders has simple roots, starting as a ‘‘two guys and a pick-up truck’’ 

operation. As we have grown to add more employees, we have chosen to operate our 

business like an extended family in which workers are taken care of and treated 

fairly. Today, Lone Sun has grown to be one of the most highly regarded subcontractors in the state, and a proud merit shop contractor. 

However, because Lone Sun sets the bar high among subcontractors, we have 

been repeatedly targeted by unions attempting to organize our employees. Unions 

have launched several ‘‘corporate campaigns’’ against us over the years, during 

which they have engaged in many unethical practices, including attempts to smear 

our name through ‘‘bannering.’’ In Lone Sun’s experience, bannering has consisted 

of the union displaying large signs in front of our clients’ (and other neutral third 

parties’) places of business. These signs were emblazoned with inflammatory, unfounded claims about our labor policies, and designed to publicly humiliate and discredit us. These deplorable tactics are desperate attempts to unfairly gain market 

share by targeting merit shop construction companies and their clients—regardless 

of the wishes of their employees. In the construction industry, unions use bannering 

to threaten or coerce merit shop contractors’ clients into hiring union-affiliated 

firms, or to force merit shop contractors to sign neutrality agreements or become 

union signatories. If these objectives fail—and they often do—they use bannering to 

try to put merit shop competition out of business for good. 

More Amicable Times 

Lone Sun’s experience with aggressive union bannering began almost four years 

ago, but it is important to note that we have had interactions with various divisions 

of the United Brotherhood of Carpenters for more than two decades. Initially, the 

relationship was professional and respectful, and involved the New Mexico District 

Council of Carpenters. From time to time, a local organizer would come out to Lone 

Sun jobsites to look around and ask employees why they were working for a merit 

shop company. After these visits, we would sometimes have discussions over coffee, 

where I would provide him with information about Lone Sun’s wage structure and 

benefits program, as well as the community service we performed. In retrospect, I 

believe the non-threatening nature of our initial relationship with the carpenters 

was largely due to the fact that we lived and worked in the same community. We 

felt a connection through our mutual goal of positive future development in the 

area. 

After a few years, however, the situation started to change. My local union contact 

informed me that the District Council had decided to bring in organizers from other 

parts of the country—specifically Chicago and El Paso, Texas. I firmly believe the 

union felt it could more effectively execute aggressive organizing efforts and corporate campaigns if it utilized organizers that had not lived and worked in our community. 

Shift to Aggressive Tactics 

Around 2004, when the District Council was folded into the Mountain West Regional Council of Carpenters, they began sending letters to Lone Sun’s current and 

prospective clients stating the union had a ‘‘labor dispute’’ with us, wrongly claiming 

we ‘‘did not provide benefits’’ to our employees when we actually did (and still do). 

In fact, Lone Sun offers an excellent benefits program that includes health and life 

insurance, a public works pension plan and even a 401(k)—a rarity for our industry’s tradesmen and laborers.1 As a continued commitment to our employees, we 

have steadily increased the amount we pay toward their health care premiums— 

currently 85 percent—and we cover 100 percent of the premiums for our employees’ 

life insurance. In addition, we offer trade-specific certifications, first aid training, 

Occupational Safety and Health Administration (OSHA) training and an apprenticeship program. 

We responded to each of the union’s letters with one of our own, countering the 

claims and providing an overview of Lone Sun’s benefits program. In a preemptive 

move, we also provided letters and documentation to the New Mexico Department 

of Workforce Solutions, the governor of New Mexico, the lieutenant governor, state 

legislators, the president of the University of New Mexico, as well as developers, 

general contractors, owners, and trade and professional associations. 
30 

At the same time, the new union organizers began to show up at jobsites claiming 

to be holding ‘‘raffles’’ in which employees were to submit their names, addresses 

and telephone numbers in order to win. Although none of the employees who signed 

up for the raffles ever won anything, most said they were contacted by the union. 

Some employees were even personally visited at their homes. 

In May 2006, the union organizers contacted us and we agreed to a meeting at 

our office. 

During the meeting, I mentioned their letter campaign and the raffles, and I once 

again reminded them about our benefits program, as well as our respect for union 

tradesmen and contractors. I discussed my friendships with other principal owners 

of union signatory contractors, and our commitment to the industry as a whole and 

our community at large. I told them I believed we should concentrate our efforts 

into making things better for everyone. At the end of the meeting, they remarked 

that they did not care for Lone Sun Builders, and would continue to harass me and 

my employees. 

The following year, the carpenters again reorganized into another larger regional 

council—this time referred to as the Southwest Regional Council of Carpenters. This 

group consolidated what originally was a small group of locals, with approximately 

2,500 members, into a massive council in excess of 32,000 members. This allowed 

the carpenters to export their corporate campaign and bannering tactics from California, through Arizona and into New Mexico. Throughout the next two years, the 

carpenters sent letters to owners, contractors and developers stating they were engaged in a ‘‘labor dispute’’ with Lone Sun, and that they would be pursuing an ‘‘aggressive public information campaign’’ against us that would ‘‘unfortunately impact 

all parties associated with projects where they are employed.’’ 

In 2008, the aggressive bannering started in earnest. The carpenters recruited 

day laborers to hold large signs, stating, ‘‘SHAME ON’’ the third party owners of 

businesses where Lone Sun performed work. On some projects, the entities named 

on the banners had not even hired us, or even the general contractor. In many 

cases, the owner or developer hired the contractors, and the end user—the tenant— 

was named on the banner. In all, Lone Sun was targeted with banners on approximately a dozen projects in 2008. 

In June 2009, the union organized a mass picket at a high-visibility project in 

Santa Fe, New Mexico. The mass picket included vulgar chants, physical threats, 

name calling and false statements, including that Lone Sun paid employees in cash 

and did not provide health benefits. After the mass picket in Santa Fe, the carpenters duplicated the process at multiple sites, including a furniture outlet, a 

church and the University of New Mexico’s Tamarind Institute. At this point, we 

knew we could not sit idly by and allow the unions to pressure us and our clients 

any longer. 

Fighting Back Legally and Ethically 

Over the years our preferred response to the carpenters’ actions had been direct 

dialogue with their representatives—always accompanied by explicit statements 

that the conversations were not to be construed as bargaining discussions. However, 

once the union became extremely aggressive, this method of communication failed. 

We attempted to contact the Southwest Regional Council’s headquarters in Los Angeles multiple times, but they never responded. When members of the public and 

state legislators were similarly unsuccessful, we learned that it had become the 

union’s procedure to not respond to inquiries into the motivations behind their actions. From time to time, they would promise to make a statement, but never did. 

In 2009, we embarked on a campaign to protect our company’s integrity, and to 

educate as many professional organizations as possible in and around Albuquerque 

about the true motivation behind the carpenters’ actions. We gave presentations to 

many local trade associations, employer groups, schools and press outlets, resulting 

in task forces, awareness materials and positive media coverage. 

We visited many of the carpenters’ bannering sites around the area—regardless 

of whether Lone Sun was the target—and learned that the day laborers were not 

even union members. Instead, the carpenters used day laborers and paid them low 

wages, with no deductions or benefits. We, of course, found it ironic that these individuals had chosen to discredit a company with loyal employees who enjoy excellent 

pay and benefits. 

In 2009, we launched our blog, which chronicles Lone Sun’s experience with the 

carpenters’ corporate campaign. We also created our own banners, which read, 

‘‘LONE SUN BUILDERS—EMPLOYEE BENEFITS AND GREAT WAGES,’’ and 

‘‘SHAME ON THE CARPENTERS UNION—HONESTY AND INTEGRITY ARE 

THE AMERICAN WAY—STOP THE LIES!’’ We produced a brochure that provided 

photos of the union’s banners at local hospitals and pharmacies, churches and 
31 

2 In consolidated cases known as United Brotherhood of Carpenters Local No. 1506 [355 NLRB 

No. 159 (2010)], the Board determined in a 3-2 split decision that bannering is protected speech 

under federal labor law. In his dissent, Board Member Brian Hayes argued that bannering was 

nothing more than ‘‘stationary picketing,’’ and should be considered ‘‘secondary coercion,’’ as 

originally intended by Congress in Section 8(b)(4)(ii) of the National Labor Relations Act. 3 U.S. Department of Labor, Bureau of Labor Statistics, Economic News Release: Union Members Summary, Jan. 21, 2011; available at: http://www.bls.gov/news.release/union2.nr0.htm. 4See KenMor Electric Co.; 355 NLRB No. 173 (2010). 

schools, appealing to government officials and the business community to take action. We held a ‘‘silent’’ demonstration and community breakfast for friends and colleagues (and even welcomed the union picketers) at a local church where the carpenters had disrupted a service. 

I firmly believe our actions positively impacted public opinion in New Mexico and 

helped Lone Sun Builders avoid complete financial and professional ruin. 

Aftermath 

Despite the outpouring of support we received from our community, and the successes of our own public education campaign, business has suffered greatly. Many 

of the clients and building tenants that were publically named on the union’s banners also were impacted by the negative publicity. In addition, just as the carpenters intended, our general contractors became reluctant to utilize our services for 

fear of the negative publicity and the organizers’ aggressive and vulgar presence. 

In all, we estimate that we have suffered a 20 percent to 30 percent decline in sales 

directly due to the negative impact of the carpenters’ corporate campaign. To date, 

prospective clients express concerns about working with us—and in many instances 

they have opted to go elsewhere for services. 

Even though business has been negatively impacted, we continue to promote our 

company and its skilled workforce, display our banners touting our benefits program, and contribute charitably to our surrounding community. In addition, Lone 

Sun’s experience with union corporate campaigns is extensive and we have become 

knowledgeable in their tactics—and how to lawfully combat them. 

The last few years have taught Lone Sun that as long as we remain defiant and 

our employees express their unwillingness to organize, the union will continue to 

do anything it can to destroy our company and its reputation. The carpenters union 

has violated our property rights, issued false claims, made vulgar and threatening 

remarks, and vowed to put us out of business. To my disappointment, the National 

Labor Relations Board (NLRB) has recently signaled it will give them cover every 

step of the way. 

The NLRB’s Support of Corporate Campaigns and the Impact on Job Creation 

The NLRB’s recent actions clearly demonstrate the agency has abandoned its role 

as a neutral enforcer and arbiter of labor law in order to promote the special interests of politically powerful unions. These actions have negative implications for 

workers, consumers, businesses and the economy, and will inevitably invite greater 

union intimidation of employees, consumers and small businesses; trample private 

property rights; reduce employee access to secret ballots; and greatly limit the ability of U.S. businesses to quickly and flexibly adjust to the demands of global competition and a changing economy. 

The Board’s September 2010 bannering decisions have been most disappointing 

for Lone Sun. In these cases, the Board took steps to protect this coercive practice, 

failing to apply longstanding laws against secondary union activity intended to prohibit confrontational conduct aimed at neutral parties, such as our clients.2 For decades, the ranks of construction unions have been dwindling, which is reflected in 

the fact that today, only 13 percent of construction workers belong to a union.3 This 

statistic, which illustrates a clear industry-wide choice not to organize, and leads 

unions to employ bannering and other desperate, unethical tactics. The NLRB’s decision will no doubt embolden and encourage more unions to incorporate this practice into their already aggressive and irresponsible corporate campaign efforts. 

The Board also has made it easier for construction unions to engage in so-called 

‘‘salting’’ abuse, in which they apply for work with merit shop contractors without 

being genuinely interested in performing that work, solely to provoke unfair labor 

practice charges and disrupt merit shop workforces.4 Endorsing the hiring of individuals whose motivation for seeking employment is the disruption of the workplace 

runs directly contrary to the Obama administration’s efforts to grow our economy 

and improve working conditions for the American people. 

I understand the Board also is looking at whether employers can be forced to 

allow non-employee union agents to trespass on their premises for the purpose of 

harming their businesses if the employer has allowed access to other non-employee 
32 

5See Roundy’s vs. Milwaukee Building and Construction Trades (Case No. 30-CA-17185). 

6See Mastec Direct TV; 356 NLRB No. 110 (2011). 

7 U.S. Department of Labor, Bureau of Labor Statistics, Construction Sector at a Glance: Employment, Unemployment, Layoffs, and Openings, Hires, and Separations, April 2010; available 

at: http://www.bls.gov/iag/tgs/iag23.htm. 

individuals or groups that have no intention of harming the business (such as the 

United Way or the Girl Scouts).5 This decision will have an enormous impact on employers’ ability to shield customers, clients and employees from interference and 

harassment by union agents. 

In yet another recent case, the NLRB determined that threats of violence made 

by pro-union employees were acceptable because those threats did not meet the 

Board’s vague, undefined standard of creating a ‘‘general atmosphere of fear and reprisal.6 Lone Sun’s policy is to not tolerate any threats of violence among our employees. It is disturbing that the Board does not share my view. 

Regrettably, the NLRB’s actions have been wholly consistent with the agenda set 

by the Obama administration, which has regularly put the interests of its union 

supporters ahead of fiscal responsibility and job growth. Through interpretations, 

regulations and executive orders, the administration has repealed union transparency requirements and consistently promoted union-backed policies, including 

flawed wage mandates under the Davis-Bacon Act and discriminatory project labor 

agreements (PLAs) on federal construction projects. The administration’s policies 

cost taxpayers billions of dollars, negatively impact business opportunities for small 

businesses and limit employment opportunities for workers. PLAs, for example, discriminate against the vast majority (87 percent) of the construction workforce that 

chooses not to join a union by denying them an opportunity to work on federal 

projects. 

The NLRB remains the main offender, as far as Lone Sun is concerned. Just recently, the Board took unprecedented steps to mandate where and how a company 

can operate and expand its business. As I’m sure many of you would agree, the federal government has no right to dictate where a company can or cannot create jobs 

or to prevent companies from speaking about costs related to union actions. 

Conclusion 

The Obama administration and the NLRB continue to pursue a labor agenda that 

stifles job creation and economic growth. With a current unemployment rate of nearly 18 percent in our industry, there is simply no place for corporate campaigns’ disruptive and destructive practices.7 It is unfortunate that the Board has chosen to 

turn the clock back more than 60 years to a time when secondary boycotts threatened to paralyze the industry and stifle job growth. Regardless of the Board’s behavior, ABC members like me will not be deterred from their dedication to the merit 

shop philosophy. 

On behalf of Lone Sun Builders and ABC, I’d like to again thank the Education 

and the Workforce Committee for holding today’s hearing. I am pleased to see the 

Committee take a renewed interest in the problems that corporate campaigns— 

bannering in particular—can cause for honest, responsible contractors, and I look 

forward to working with you on this issue. Mr. Chairman, this concludes my formal 

remarks. I am prepared to answer any questions you may have. 
33 
34 
35 
36 

Chairman ROE. Thank you, Mr. Karnas. 

Ms. Fisk? 

STATEMENT OF CATHERINE L. FISK, ESQ., LAW PROFESSOR, 

UNIVERSITY OF CALIFORNIA IRVINE SCHOOL OF LAW 

Ms. FISK. My name is Catherine Fisk. I am the Chancellor’s Professor of Law at the University of California at Irvine. Thank you 

for inviting me to testify today. 

Corporations adopt codes of social responsibility for good reasons, 

and unions play an important role in helping companies adhere to 

their principles. A union corporate social responsibility campaign is 

designed to provide information to consumers, the public, and regulatory agencies about a company’s labor practices. Thus, corporate 

social responsibility campaigns and union representation help protect good jobs for all workers—a goal endorsed by the House Committee on Education and Labor in 2007 in a pair of hearings on 

strengthening America’s middle class. 

I will address two questions today: First, should the National 

Labor Relations Board protect the rights of employees and unions 

to publicize their concerns about labor practices? And, second, is 

the NLRB appropriately exercising its statutory power to enforce 

the Federal labor law? The answer to both questions is ‘‘yes.’’ 

As to the first question, the First Amendment to the United 

States Constitution protects the right to speak out on matters of 

public concern, including a company’s labor record. Displaying banners and picketing is one way to do this. 

Generally speaking, the National Labor Relations Board’s past 

efforts to prohibit peaceful bannering and street theater have been 
37 

rejected by the Federal courts. Quite rightly, therefore, the NLRB 

has now concluded that peaceful bannering and street theater cannot be prohibited by the National Labor Relations Act. 

In a number of cases in 2010, the Board exhaustively canvassed 

the law on leafleting, banners, and picketing in light of the Supreme Court’s evolving First Amendment jurisprudence. The Board 

quite reasonably concluded that the display of a banner is closer 

to the leafleting protected by the Supreme Court in the DeBartolo 

case than it is to the picketing prohibited by the Supreme Court 

in the 1950 Teamsters case. 

The Board’s decisions on banners are entirely reasonable. As the 

Supreme Court has emphasized for decades, the National Labor 

Relations Act gives the Board the responsibility to regulate and 

protect both worker and employer speech in the context of its labor 

relations setting. 

The First Amendment does, however, allow the government to 

prohibit threats. In deciding when a statement constitutes a threat, 

the court has held that the NLRB should consider the power employers have over employees who fear for their jobs. Thus, Federal 

law can and does prohibit statements like, ‘‘Sleep with me or you 

are fired,’’ or, ‘‘If you join a union or if you go on strike, I will fire 

you or eliminate your job.’’ Thus, the Boeing case does not break 

new ground in the law and is entirely consistent with a half-century of labor law prohibiting employers from threatening to move 

or eliminate jobs, or from actually doing so, in retaliation for employees having exercised their statutory rights. 

Moreover, the mere fact of a corporate campaign does not coerce 

a company in violation of the Federal racketeering law. Several 

Federal courts have rejected RICO challenges to union efforts to organize through card check and neutrality agreements. 

Let me now turn to the second question: Is the NLRB appropriately exercising its powers to interpret and enforce the NLRA? 

There is no basis for suggesting that the decision of the acting 

general counsel to issue a complaint in Boeing and the Board’s request for amicus briefs in the Specialty Healthcare case is evidence 

that the Board is somehow exceeding its statutory authority. 

While it is not unheard of for Members of Congress to criticize 

the Board when its decisions on important matters of labor law and 

policy are contrary to the Members’ own preferences, it is important not to allow criticism of past decisions or concerns about the 

general direction of Board law to become efforts to coerce or intimidate the Board into resolving disputed issues of law and fact in 

pending cases. 

As an independent agency that exercises powers to adjudicate 

cases subject to deferential review in the United States court of appeals, the NLRB is obligated by the National Labor Relations Act 

to decide cases based on evidence adduced in an evidentiary hearing. Due process, a constitutional right, requires any entity that 

formally adjudicates cases based on law and fact, including the 

NLRB and Federal and State trial courts, to have a degree of independence from legislative intervention. 

The Board’s recent decisions in the area of labor protests are entirely consistent with the trend in the United States Supreme 

Court’s First Amendment jurisprudence. They are, moreover, a rea-
38 

sonable agency response to the fact that the agency’s prior and less 

speech-protective approach to leafleting, bannering, and other 

speech was inappropriate. 

Whatever the views of the current congressional majority about 

the trend in the NLRB’s case law on labor protests or other areas, 

there will be time enough for the losing party in those cases to seek 

review in the Federal courts of appeals. Congress should allow the 

Board to continue its work without intervention. 

Thank you. 

[The statement of Ms. Fisk follows:] 

Prepared Statement of Catherine L. Fisk, Chancellor’s Professor of Law, 

University of California, Irvine 

My name is Catherine L. Fisk. Thank you for the opportunity to testify before the 

House of Representatives Subcommittee on Health, Employment, Labor and Pensions on the way in which the NLRB has regulated corporate (also known as comprehensive or corporate social responsibility) campaigns. 

Since 2008, I have been the Chancellor’s Professor of Law at the School of Law, 

University of California, Irvine. Previously, I was the Douglas Blount Maggs Professor of Law at Duke University School of Law, where I taught from 2004 to 2008, 

and was on the faculty of a number of other law schools since 1991. I am the coauthor of a casebook, Labor Law in the Contemporary Workplace (West Publishing 

Co. 2009), as well as two other books on labor and employment law (Labor Law Stories (Foundation Press 2005) and Working Knowledge: Employee Innovation and the 

Rise of Corporate Intellectual Property (UNC Press 2009). I have published dozens 

of articles on labor and employment law in leading law reviews. I regularly teach 

Labor Law, Employment Law, Employment Discrimination Law, and a course on 

the legal profession, and previously have taught Civil Procedure, Legislation, and 

specialized courses on the law of the workplace, labor markets, and employee intellectual property. I am admitted to the bar in California and in the District of Columbia (inactive in DC), and have briefed and/or argued cases in state and federal 

trial and appellate courts. 

I. The Benefits of Corporate Social Responsibility Campaigns in a Free Society with 

a Market Economy 

The topic of this hearing raises significant issues at the intersection of labor law 

and the United States Constitution. A union corporate social responsibility campaign is designed to provide information to consumers, the public, and relevant regulatory agencies about a company’s labor practices, including its wages, health and 

safety record, and environmental practices. Thus, at the heart of a corporate social 

responsibility campaign is the right to speak on matters of public concern and to 

petition government for the redress of grievances. See James J. Brudney, Collateral 

Conflict: Employer Claims of RICO Extortion Against Union Comprehensive Campaigns, 83 Southern California L. Rev. 731, 733 (2010). Corporate social responsibility campaigns are thus within the First Amendment’s protections of freedom of 

association and the right to petition government for the redress of grievances, as 

well as freedom of verbal and written speech, including the dissemination of handbills and other written texts, the use of hand gestures, picketing, the display of placards and banners, symbolic conduct, and the expenditure of money to support or oppose political candidates and issues. 

The Court’s recent and strong protection for the First Amendment rights of companies (Citizens United v. Fed. Election Comm’n, 130 S. Ct. 876, 908 (2010), organizations (Boy Scouts of America v. Dale, 530 U.S. 640 (2000) (First Amendment protects right of Boy Scouts to discriminate against gays)), and individuals (United 

States v. Stevens, 130 S. Ct. 1577 (2010) (individual right to create, possess and sell 

offensive depictions of animals)) is based on a longstanding belief that in a democratic society with a market economy, the best protection for both liberty of conscience and robust economic growth lies in the electorate, consumers, and citizens 

having access to a full range of information on which to base their political, social 

and economic choices. As the Court recently emphasized: ‘‘The First Amendment 

confirms the freedom to think for ourselves.’’ Citizens United, 130 S. Ct. at 908. 

Each of these decisions strikes some as wrong as a matter of policy and constitutional interpretation, but for the moment they are the law. 

The purpose of corporate social responsibility campaigns is to provide workers, 

consumers, and citizens with the information we need, as the Court put it in Citi-
39 

zens United, ‘‘to think for ourselves’’ about which products to buy, which businesses 

to patronize, and where to work. Corporations adopt codes of corporate responsibility for a reason, and there is no basis to restrict the ability of workers and their 

unions to hold companies to the policies and values they announce. There is no evidence that providing workers and consumers information about companies’ labor 

practices and safety records has any adverse effect on the economy. Indeed, to the 

extent that workers and consumers are empowered by information to choose jobs 

and to patronize businesses that pay good wages and have strong safety and environmental records, the economy is strengthened. Elementary principles of economics 

show that information facilitates efficient transactions, prevents negative 

externalities, and prevents a race to the bottom in which companies gain a competitive advantage by driving down wages and externalizing the environmental or other 

safety costs of their operations. 

Corporate social responsibility campaigns are designed to strengthen the middle 

class, a goal which the House Committee on Education and Labor in the 100th Congress endorsed in a pair of hearings on ‘‘Strengthening America’s Middle Class’’ in 

2007. See H. Rep. No. 110-23, text accompanying notes 25-43 (2007). As the House 

Report produced from those hearings found, the decline of unionization and the associated decline in wages and rise in economic insecurity have had devastating effects on the size and security of the American middle class, even as corporate profits 

have soared. Id. Employees who are paid well are more likely to have money to 

spend, which bolsters the economy. Indeed, Congress specifically found when it enacted the Wagner Act 1935, at the depth of the Great Depression, that promoting 

the rights of workers to unionize would eliminate the bargaining and wage inequality that ‘‘tends to aggravate recurrent business depressions, by depressing wage 

rates and the purchasing power of wage earners in industry and by preventing the 

stabilization of competitive wage rates and working conditions within and between 

industries.’’ 29 U.S.C. §151. Employees with decent wages and benefits are more 

able to pay taxes to support education and infrastructure. They are less likely to 

depend on public assistance. Employees with decent wages and benefits are more 

likely to have health care for themselves and their children and are less likely to 

have to work two jobs. Decent wages support strong families and strong communities. See Steven Greenhouse, The Big Squeeze: Tough Times for the American 

Worker (2009). 

Workers and their unions perform a valuable role when they publicize the labor 

records of companies and urge those sympathetic to their view to support their efforts to ensure that people work for good wages in safe conditions. It is well known 

that unionized workplaces are generally better paid. In 2010, the median usual 

weekly earnings of full-time workers who are union members is $917, whereas for 

nonunion workers it is $717. That is not a lot of money: it works out to $47,684 

for a 52 workweek year, as compared to $37,284 for a nonunion worker, but the difference could be huge for a family struggling to make ends meet. Unionized workplaces are more likely to provide employee health insurance. Unionized workplaces 

are more likely to provide defined benefit pension plans, which (like Social Security 

benefits) provide a more secure retirement by placing the risk of economic downturn 

on the plan rather than on the individual. Union workers are more likely than nonunion workers to enjoy freedom from wage discrimination based on gender, race, or 

ethnicity. See U.S. Department of Labor, Bureau of Labor Statistics, Union Members in 2010, Jan. 21, 2011; U.S. Department of Labor, Bureau of Labor Statistics, 

National Compensation Survey: Employee Benefits in Private Industry in the 

United States, March 2008, August 2008. 

II. The First Amendment and Worker Free Speech Rights 

The First Amendment protects speech that most people value, including the right 

of people and political candidates to speak on political issues (Brown v. Hartilage, 

456 U.S. 45 (1982) (political candidate has a right to promise in an election campaign to work for a lower salary)), the right to take out advertisements in newspapers criticizing government officials for failing to protect civil rights (New York 

Times v. Sullivan, 376 U.S. 254 (1964)), the right to display flags, Stromberg v. California, 283 U.S. 359 (1931), and the rights of both workers and employers to speak 

on issues relating to unionization, wages, and working conditions, NLRB v. Gissel 

Packing Co., 395 U.S. 575 (1969). The First Amendment also protects speech that 

many appreciate but some find problematic in some circumstances, such as the right 

of companies to advertise. Central Hudson Gas v. Public Serv. Comm’n, 447 U.S. 

557 (1980). And, in a free society, the First Amendment necessarily also protects 

speech that many people find offensive, including picketing at women’s health clinics and military funerals, Snyder v. Phelps, 131 S. Ct. 1207 (2011); Schenck v. ProChoice Network, 519 U.S. 357 (1997); Madsen v. Women’s Health Center, Inc., 512 
40 

U.S. 753 (1994), the burning of crosses and flags, Texas v. Johnson, 491 U.S. 397 

(1989); United States v. Eichman, 496 U.S. 310, 318 (1990), and burning a cross on 

a person’s lawn, RAV v. City of St. Paul, 505 U.S. 377, 391 (1992). 

A. The Contemporary First Amendment Protection for Picketing and Protest 

In recent years, the Court has made clear that picketing—including displaying 

signs and people patrolling—is protected speech under the First Amendment that 

enjoys the highest level of constitutional protection when it addresses any matter 

of political, social or other concern to the community. Thus, the Court upheld picketing at a military funeral, Snyder v. Phelps, 131 S. Ct. 1207 (2011), and picketing 

outside clinics that provide family planning services, Schenck v. Pro-Choice Network, 519 U.S. 357 (1997); Madsen v. Women’s Health Center, Inc., 512 U.S. 753 

(1994). Even offensive and intimidating speech and symbolic conduct is protected by 

the First Amendment. Snyder, 131 S. Ct. at 1216 (‘‘The arguably ‘inappropriate or 

controversial character of a statement is irrelevant to the question whether it deals 

with a matter of public concern’ ’’ and is thus entitled to the highest level of First 

Amendment protection), quoting Rankin v. McPherson, 483 U.S. 378, 387 (1987)). 

The First Amendment protection generally means that government cannot prohibit or regulate speech or symbolic conduct expressing a political message based 

on content unless the regulation is narrowly tailored to a compelling governmental 

interest. Turner Broadcasting System, Inc. v. Federal Communications Comm’n, 520 

U.S. 180 (1997). The government can prohibit threats, Virginia v. Black, 538 U.S. 

343 (2003), and can consider the coercive power employers have over employees in 

deciding which employer statements to employees are threats (‘‘sleep with me or 

you’re fired’’ or ‘‘if you join a union, I’ll fire you’’). See NLRB v. Gissel Packing Co., 

395 U.S. 575 (1969); NLRB v. Exchange Parts Co., 375 U.S. 405 (1964). But saving 

the targets of offensive speech from psychological or economic harm is usually not 

a compelling governmental interest. Thus, the Court struck down prohibitions on 

flag burning, Texas v. Johnson, 491 U.S. 397 (1989); United States v. Eichman, 496 

U.S. 310, 318 (1990), on burning a cross on a person’s lawn, RAV v. City of St. Paul, 

505 U.S. 377, 391 (1992), on shouting at women entering a medical clinic seeking 

family planning services, Schenck, 519 U.S. 357; Madsen, 512 U.S. 753, and on picketing at a military funeral blaming the soldier’s death on God’s vengeance for American tolerance for gays and lesbians, Snyder, 131 S. Ct. 1207. The Court has struck 

down prohibitions on picketing directed at individuals in residential neighborhoods 

when the prohibition discriminated on the basis of subject matter. Carey v. Brown, 

447 U.S. 455, 465 (1980). Thus even when it is alleged that the picketing infringes 

the rights of the targets of the protest by making it harder for them to run their 

business without disruption, the Court has rejected regulation. 

B. The Older Rules Applicable to Labor Picketing 

Given the robust contemporary First Amendment protection for picketing and protest, the treatment of labor picketing is anomalous. In International Brotherhood of 

Teamsters v. Vogt, the Court upheld a state law prohibiting peaceful picketing by 

union members at a work site because picketing ‘‘involved more than just communication of ideas * * * since it involves patrol of a particular locality and since the 

very presence of a picket line may induce action of one kind or another, quite irrespective of the nature of the ideas which are being disseminated.’’ 354 U.S. 284, 289 

(1957). Since then, the Court has upheld against constitutional challenge the application of federal labor law to picketing encouraging a strike by employees other than 

those employed by an entity with whom the picketing employees have a labor dispute. NLRB v. Denver Building & Construction Trades Council, 341 U.S. 675 (1951). 

The implicit rationale of these cases is that labor picketing is a uniquely persuasive 

form of speech that induces union members to refuse to work regardless of their 

views on the merits of the labor dispute. In upholding a prohibition on picketing 

calling for a consumer boycott of a business if a successful boycott would threaten 

the business with ruin or substantial financial loss, the Court emphasized the harm 

that picketing can cause when consumers are persuaded of the union’s message. 

NLRB v. Retail Store Employees Union, Local No. 1001 (Safeco Title Ins. Co.), 447 

U.S. 607 (1980). 

Under current First Amendment doctrine, these decisions are difficult, if not impossible, to justify. In the first place, they allow Congress to treat picketing engaged 

in by employees affiliated with a labor union more harshly than other picketing. 

Today, such a distinction would fail, inasmuch as the Court has struck down bans 

on worksite picketing and worksite calls for consumer boycotts when engaged in by 

civil rights activists. Police Department of the City of Chicago v. Mosley, 408 U.S. 

92 (1972); NAACP v. Claiborne Hardware Co., 458 U.S. 886, 912 (1982). The Court 

recently affirmed that the First Amendment prohibits differential regulation of 
41 

speech depending on the identity of the speaker: ‘‘[T]he Government may commit 

a constitutional wrong when by law it identifies certain preferred speakers. By taking the right to speak from some and giving it to others, the Government deprives 

the disadvantaged person or class of the right to use speech to strive to establish 

worth, standing, and respect for the speaker’s voice. The Government may not by 

these means deprive the public of the right and privilege to determine for itself 

what speech and speakers are worthy of consideration.’’ Citizens United v. Fed. 

Election Comm’n, 130 S. Ct. 876, 899 (2010). Second, the old labor picketing cases 

allow government to proscribe speech based on its content: picketing requesting 

workers to withhold their labor is prohibited; picketing urging workers to work or 

requesting consumers to withhold their patronage is not. Today, of course, this sort 

of content-based or viewpoint-based regulation is unconstitutional, as content-based 

restrictions are invalid unless strict scrutiny is met. Mosley, 408 U.S. 92; Carey, 447 

U.S. 455. Finally, the notion that labor picketing can be prohibited because it is so 

persuasive to workers and consumers sympathetic to labor’s causes is simply impossible to square with the rest of free speech jurisprudence, which does not allow government to prohibit speech simply because some find it persuasive. 

The anomalous treatment of labor picketing can be understood as an historical artifact when we recall that the Supreme Court developed the law of labor picketing 

before it developed its modern robust protections for picketing and other forms of 

symbolic speech. Thus, it made sense to the Court in the 1950s to hold that picketing was not pure speech because it involves conduct (walking). Although there was 

some judicial protection for symbolic speech before 1950, it was not until the late 

1960s that the Court clearly articulated a test for First Amendment protection for 

symbolic speech and increased the constitutional protection for it. Once the Court 

expanded First Amendment protection for symbolic conduct in the 1960s and 1970s, 

United States v. O’Brien, 391 U.S. 367 (1968) (burning draft cards); Spence v. Washington, 418 U.S. 405 (1974) (hanging a United States flag upside down with a peace 

symbol affixed to it), the differential treatment of labor picketing lost its conceptual 

moorings. 

As First Amendment protection for picketing by civil rights and other groups has 

expanded in recent decades, the Court has begun to accord greater First Amendment protection to non-picketing labor protest. In essence, the Court distinguishes 

between labor picketing (still subject to the old cases) and other forms of peaceful 

labor protest, which enjoys constitutional protection more akin to that enjoyed by 

civil rights and other protest. Thus, the Court held that labor handbilling at a work 

site is not prohibited by federal labor law. DeBartolo Corp. v. Florida Gulf Coast 

Trades Council, 485 U.S. 568 (1987). The Court reasoned that the distribution of 

handbills is ‘‘expressive activity’’ and that ‘‘legislative proscription of such leaflets 

would pose a substantial issue of validity under the First Amendment.’’ 485 U.S. 

at 576. Similarly, in holding that the NLRA does not prohibit picketing urging a 

consumer boycott of a product, the Court reasoned that its construction of the statute ‘‘reflect[s] concern that a broad ban against peaceful picketing might collide with 

the guarantees of the First Amendment.’’ NLRB v. Fruit and Vegetable Packers, 

Local 760 (Tree Fruits), 377 U.S. 58, 63 (1964). Similarly, the Court has read the 

federal labor laws to protect the rights of employees to distribute newsletters and 

leaflets in the workplace urging workers to support legislation and political candidates protective of workers’ rights. Eastex, Inc. v. NLRB, 437 U.S. 556 (1978). 

In attempting to reconcile the older cases upholding regulation of labor picketing 

with recent cases affording expansive protection for picketing, handbilling, and 

other forms of verbal and symbolic speech, the Court has emphasized that the federal labor laws strike a ‘‘delicate balance between union freedom of expression and 

the ability of neutral employers, employees, and consumers to remain free from coerced participation in industrial strife.’’ NAACP v. Claiborne Hardware Co., 458 

U.S. 886, 912 (1982). The NLRB is obligated to construe the NLRA so as to maintain that delicate balance in the facts of each case. Its decisions are entitled to deference if the factual determinations are supported by substantial evidence on the 

record as a whole, its interpretation of the statute is rational, and ‘‘its explication 

is not inadequate, irrational, or arbitrary.’’ 29 U.S.C. §159(e); Allentown Mack Sales 

and Serv., Inc. v. NLRB, 522 U.S. 359, 364 (1999). 

The continuing vitality of the Supreme Court’s labor picketing cases may be 

doubtful given the Court’s expansive protection for picketing on myriad other topics, 

including issues pertaining to fair treatment at work. Police Department of the City 

of Chicago v. Mosley, 408 U.S. 92 (1972). Nevertheless, the law of labor picketing 

and protest draws two crucial distinctions: (1) whether the speech is picketing or 

is instead handbilling, or other comparably expressive and non-coercive communication, and (2) whether the speech is at a worksite and is directed at workers or 

whether it is directed at consumers or the public. The law with respect to two cat-
42 

egories of labor speech is settled under Supreme Court law: picketing directed at 

workers can be regulated, and handbilling directed at consumers cannot. DeBartolo 

Corp. v. Florida Gulf Coast Trades Council, 485 U.S. 568 (1987). The Supreme Court 

has not addressed the outer limits of regulation of labor picketing directed only or 

primarily at the public, nor has it addressed the constitutional permissibility of prohibiting non-picketing speech directed only or primarily at workers, at least when 

the speech occurs at the worksite and when it does not call for an immediate work 

stoppage. 

This leaves two categories of labor protest of uncertain status: peaceful picketing 

directed at the public (which is generally protected by the statute, but whose constitutional status has not been addressed) and dissemination of leaflets, display of 

banners, and other comparable forms of pure speech or non-coercive conduct directed at workers (which, similarly, is generally protected by the statute but whose 

constitutional status has not been addressed by the Court). It is these two categories 

of speech that the Board has recently held entitled to First Amendment protection. 

C. The Lower Court and NLRB Approaches to Labor Protest 

In the absence of Supreme Court precedent, the NLRB and the federal courts of 

appeals have reached an array of conclusions on the statutory and constitutional 

protection for picketing directed at the public and leafleting and other non-coercive 

protest directed at workers. Although the cases are not entirely consistent, overall 

they have found protection for such expression. Three types of protest activity have 

drawn the most litigation: display of banners; distribution of handbills; and various 

forms of street theater, including the appearance at a worksite of employees dressed 

up in rat costumes and the staging of mock funerals. As will be explained below, 

generally speaking the NLRB’s past efforts to prohibit peaceful bannering and street 

theater have been rejected by the federal courts. It is entirely appropriate—indeed, 

it is explicitly contemplated by the statutory scheme—that the Board has now concluded that peaceful bannering and street theater cannot be prohibited by the 

NLRA. 

1. BANNERS AND LEAFLETS

The courts of appeals have held that the display of a banner may not be prohibited by the NLRA unless the message on the banner would lead consumers and 

passersby to conclude that the worksite is dangerous or unhealthful. In Overstreet 

v. United Brotherhood of Carpenters, 409 F.3d 1199 (9th Cir. 2005), on public sidewalks some distance from retailers that contracted with contractors using non-union 

labor and paying low wages, the Carpenters Union displayed banners reading 

‘‘Shame on [name of retailer]’’ in large letters, with the words ‘‘Labor Dispute’’ in 

smaller letters underneath. The NLRB General Counsel issued a complaint against 

the Carpenters Union and sought an injunction against the activity under section 

10(l) of the NLRA. The court of appeals rejected the General Counsel’s interpretation of the statute and held that the bannering was protected by the First Amendment and could not be equated with signal picketing prohibited under the Supreme 

Court’s labor picketing jurisprudence. The court explained: 

[T]he reliance on the physical presence of speakers in the vicinity of the individuals they seek to persuade * * * is no basis for lowering the shield of the First 

Amendment or turning communication into statutory ‘‘coercion.’’ 

Nor are the union members’ activities ‘‘coercive’’ for any reason other than their 

physical presence. The union members simply stood by their banners, acting as 

human signposts. Just as members of the public can ‘‘avert [their] eyes’’ from billboards or movie screens visible from the public street, they could ignore the Carpenters and the union’s banners. If anything, the Carpenters’ behavior involved less 

potential for ‘‘coercing the public than the handbilling in DeBartolo, as there was 

no one-on-one physical interaction or communication.’’ 409 F.3d at 1214. 

When the message on the banner would lead consumers to conclude that the targeted business is dangerous or unhealthful (as where the union displayed a banner 

saying ‘‘This Medical Facility is Full of Rats’’), a divided panel of the Ninth Circuit, 

over the dissent of Judge Kozinski, held the banner was defamatory. San Antonio 

Community Hospital v. Southern California District Council of Carpenters, 125 F.3d 

1230 (9th Cir. 1997). Distinguishing other cases in which unions had referred to employers as ‘‘rats’’ on the ground that the audience would know that rat is a slang 

term of art for an employer paying substandard wages, the court found that passersby might think that the hospital in this case had a rodent problem. Id. at 1235. 

Alternatively, if a union distributes handbills to workers (rather than to consumers 

and the public) and a work stoppage immediately ensues, a divided panel of the 

D.C. Circuit held that the handbilling was tantamount to picketing urging a strike 

and could be prohibited. Warshawsky & Co. v. NLRB, 182 F.3d 948 (D.C. Cir. 1999). 
43 

2. STREET THEATER AND THE RAT

In labor disputes across the country, workers and their unions have engaged in 

a variety of forms of street theater as protest. In a few cases, workers staged a mock 

funeral accompanied by signs proclaiming that patronizing the target business 

‘‘should not be a grave decision.’’ Sheet Metal Workers’ International Association, 

Local 15 v. NLRB, 491 F.3d 429 (D.C. Cir. 2007); Kentov v. Sheet Metal Workers, 

Local 15, 418 F.3d 1259 (11th Cir. 2005). In another few cases, employees dressed 

up in rat costumes and strolled around public sidewalks near job sites with leaflets 

complaining that targeted businesses were rats because they paid substandard 

wages. Construction & General Laborers Local Union 4 (Quality Restorations), Case 

13-CC-2006, Advice Memorandum (January 19, 1996) (individual dressed as a rat 

who patrolled in front of association confronted customers or employees and thus 

was not engaged in protected free speech). Northern California Regional Council of 

Carpenters, Cases 32-CC-1469-1; 32-CC-1480-1; 32-CC-1482-1; 32-CC-1483-1; 32- 

CB-5451-1, Advice Memorandum (October 31, 2002) (person in rat costume who patrolled in front of employer premises was confrontational and coerced employers and 

thus violated section 8(b)). 

At least one protest involved inflating a 16-foot-tall balloon in the shape of a cartoon rat. Sheet Metal Workers’ Int’l Assn, 491 F.3d at 432. In other cases, janitors 

have conducted sing-alongs on the sidewalk outside of commercial office buildings 

or paraded around with mops and brooms. Service Employees Union Local 87, 312 

NLRB 715 (1993). And in at least one instance which appears never to have resulted in a published agency or judicial decision, hotel room cleaners supported their 

demand for better wages by wheeling a bed onto a public sidewalk outside a hotel 

and demonstrated the physically arduous labor of changing the sheets on hotel beds. 

There have been only a few court of appeals decisions on the permissibility of 

worker street theater, and they have reached conflicting conclusions. The D.C. Circuit, in an extensive and scholarly opinion by Chief Judge Douglas Ginsburg, held 

that the mock funeral could not constitutionally be prohibited, Sheet Metal Workers’ 

Int’l Assn, 491 F.3d at 439. The Eleventh Circuit, in an opinion by Judge Kravitch, 

held that the mock funeral was more like picketing than it was like leafleting and 

thus could be prohibited. Kentov, 418 F.3d at 1266. Because review may be had in 

the D.C. Circuit in any case decided by the NLRB, 29 U.S.C. §159(f), it is not unreasonable for the Board to follow the D.C. Circuit’s guidance and hold that banners 

and street theater cannot constitutionally be prohibited under section 8(b). 

The NLRB’s recent efforts to reconcile its own jurisprudence on the distinction between picketing, leafleting, bannering, and street theater are entirely reasonable. In 

Eliason & Knuth, 355 NLRB No. 159 (2010), the Board exhaustively canvassed the 

Supreme Court’s and its own prior treatment of picketing and other labor protest 

in light of the Court’s historical and evolving First Amendment treatment of the 

various forms of symbolic speech. The Board quite reasonably concluded that the 

display of a banner is closer to the leafleting protected by the Court in DeBartolo 

than to the picketing prohibited in Vogt and its progeny. See also Carpenters Local 

Union No. 1506 (Marriott), 255 NLRB No. 219 (2010) (following Eliason & Knuth). 

The Board concluded in Southwest Regional Council of Carpenters, 356 NLRB No. 

88 (2011), that the display of banners is not prohibited by the statute even if the 

banners are at construction sites rather than at places frequented by the general 

public. The Board concluded that the bannering cannot be prohibited in the absence 

of evidence that the display of a banner is intended as a covert signal to engage 

in an illegal secondary work stoppage (as might be the case if the employees picket) 

rather than as an effort to persuade workers, consumers, and other friends of labor 

about the harm caused by the employers paying substandard wages. 

These recent efforts to reconcile the First Amendment rights of workers to publicize the nature of their labor dispute with the Supreme Court’s treatment of labor 

picketing are entirely reasonable. As the Supreme Court has emphasized for decades, the National Labor Relations Act gives the Board the responsibility to regulate 

and protect both worker and employer speech ‘‘in the context of its labor relations 

setting.’’ NLRB v. Gissel Packing Co., 395 U.S. 575 (1969). See also NLRB v. Exchange Parts Co., 375 U.S. 405 (1964). In both Gissel and Exchange Parts the Court 

deferred to the Board’s determination of whether particular speech was protected 

or prohibited by the NLRA. The Board has for 75 years attempted to decide, based 

on the evidence in cases and its expertise in labor relations, which speech by employees and by employers should be protected by the NLRA, prohibited by the 

NLRA, or left unregulated. Given that the weight of court of appeals decisions have 

rejected the Board’s previous efforts to prohibit peaceful dissemination of leaflets or 

display of banners, as discussed above, and given the Supreme Court’s recent unequivocal First Amendment protection for picketing and other protest, the Board 
44 

reasonably has concluded that bannering and leafleting are not prohibited by section 8(b) of the NLRA. The Board would also be reasonable to conclude that other 

forms of symbolic speech, including street theater such as the rat and mock funerals, cannot be proscribed unless the conduct blocks ingress or egress to the property 

or contains false and defamatory statements. Indeed, given the Supreme Court’s recent 8-1 decision in Snyder v. Phelps upholding offensive picketing at military funerals, the Board’s prior jurisprudence allowing extensive prohibitions of worker 

protest based on its content and even its viewpoint is constitutionally suspect. Thus, 

the Board is well within its broad statutory authority to interpret the NLRA in light 

of workplace realities and to develop a labor policy that grants robust protection to 

worker speech. Indeed, its decisions in this area are all but compelled by the protection courts of appeals and the Supreme Court have granted to non-picketing labor 

protest. 

D. Corporate Social Responsibility Campaigns Do Not Violate RICO 

The title of this hearing suggests possible concern about whether union corporate 

social responsibility campaigns are desirable as a matter of policy or permissible as 

a matter of law. Inasmuch as they are designed to enforce workers’ statutory rights 

to unionize and to inform consumers and workers about a company’s labor, safety, 

and environmental practices, they are good policy. Whatever one’s views about their 

desirability as a matter of policy, however, there is no basis in law for an outright 

prohibition. As noted above, to the extent that a corporate social responsibility campaign involves publicity about a company’s labor, safety, or environmental record, 

it is protected by the First Amendment. To the extent that it involves invoking regulatory proceedings or litigation challenging the legality of particular practices, the 

usual rules governing meritorious litigation apply. But to the extent that the argument is that the mere fact of a corporate campaign, including an effort to secure 

recognition through card-check and a neutrality agreement, coerces a company, the 

law is on the unions’ side. To date, several federal courts have rejected RICO challenges to union efforts to organize through card check and neutrality agreements. 

Cintas Corp. v. UNITE HERE, 601 F. Supp. 2d 571 (S.D.N.Y.), aff’d, 355 F. App’x 

508 (2d Cir. 2009); Wackenhut Corp. v. Service Employees Int’l Union, 593 F. Supp. 

2d 1289 (S.D. Fla. 2009). See generally Brudney, supra, 83 S. Cal. L. Rev. 731. 

III. Congress Should Not Interfere With the NLRB’s Adjudication of Pending Cases 

It appears from the public commentary of some Members of Congress that some 

of the NLRB’s recent decisions on labor protest and other topics, along with the decision of the Acting General Counsel to issue a complaint one case, have caused consternation. While it is not unheard of for Members of Congress to criticize the Board 

when its decisions on important matters of labor law and policy are contrary to the 

Members’ own preferences, it is important not to allow criticism of past decisions 

or concerns about the general direction of Board law to become efforts to coerce or 

intimidate the Board into resolving disputed issues of fact in pending cases. There 

is no basis for suggesting that the decision of the Acting General Counsel to issue 

a complaint in one case and the Board’s request for amicus briefs in another is evidence that the Board is somehow exceeding its statutory authority. Specialty 

Healthcare and Rehabilitation Center of Mobile and United Steelworkers, District 

9, 15-RC-8773, and Boeing and International Ass’n of Machinists District Lodge 751, 

19-CA-32431. 

As an independent agency that exercises powers to adjudicate cases subject to deferential review from the courts of appeals under the substantial evidence standard, 

Universal Camera Corp. v. NLRB, 340 U.S. 474 (1962), the NLRB is obligated by 

the National Labor Relations Act to decide cases based on evidence adduced in an 

adversary hearing. Its adjudicatory processes are relatively formal as compared to 

those of many agencies. It acts in the place of a United States District Court in enforcing the statutory rights of individuals and entities. Like any entity that adjudicates cases based on law and fact, including federal and state trial courts, principles of separation of powers and due process necessitate a degree of independence 

from legislative oversight as the agency carries out its adjudicatory role. 

Although a number of federal court decisions have addressed the propriety of Congressional interference in agency processes, the most closely on point is Pillsbury 

Co. v. Federal Trade Commission, 354 F.2d 952 (5th Cir. 1966). In Pillsbury, a Senate subcommittee interrogated the Chair of the FTC and members of his staff regarding a pending case and expressed views on how it should be decided. After the 

FTC later decided the case along the lines suggested by the Senators, the court of 

appeals found the Senate inquiry to be improper and to have infringed the due process rights of the litigants to a ‘‘fair trial’’ and to be free from the ‘‘appearance of 

impartiality.’’ Id. at 964. The court of appeals said that when a congressional inves-
45 

tigation ‘‘focuses directly and substantially upon the mental decisional processes of 

a Commission in a case which is pending before it, Congress is no longer intervening in the agency’s legislative function, but rather, in its judicial function.’’ Id. 

Accord: Koniag v. Andrus, 580 F.2d 601, 610 (D.C. Cir. 1978) (holding that a letter 

sent from a chair of a House committee to the Secretary of Interior regarding the 

Secretary’s review of decisions of the Bureau of Indian Affairs created the appearance of a compromise of the Secretary’s impartiality and remanding to the new Secretary of the Interior for a fair and dispassionate treatment of the matter). 

Later cases that have rejected challenges to Congressional interference in agency 

processes have emphasized that the interference did not express a view on the merits but was instead intended only to expedite the decision, Gulf Oil Corp. v. Federal 

Power Commission, 563 F.2d 588 (3d Cir. 1977), or that there was no evidence that 

the intervention had an effect on the agency’s decision, ATX, Inc. v. U.S. Dep’t of 

Transp., 41 F.3d 1522, 1529-30 (D.C. Cir. 1994); State of California v. Federal Energy Regulatory Comm’n, 966 F.2d 1541, 1552 (9th Cir. 1992), or that the agency 

proceeding was informal, United States ex rel. Parco v. Morris, 426 F. Supp. 976 

(E.D. Pa. 1977). See generally Morton Rosenberg & Jack H. Maskell, Congressional 

Research Serv., RL 32113, Congressional Intervention in the Administrative Process: Legal and Ethical Considerations (2003). 

Conclusion 

The Board’s recent decisions in the area of labor protest are entirely consistent 

with the trend in the United States Supreme Court’s First Amendment jurisprudence. They are, moreover, a reasonable agency response to the fact that the agency’s prior and less speech-protective approach to leafleting, street theater, and other 

non-picketing protest met with hostility from several federal courts. Wholly apart 

from the question whether the recent cases upholding worker protest rights are 

compelled by the First Amendment, there is no evidence that robust protection for 

employee speech has any adverse effect on job creation or the health of the American economy, and there is some evidence suggesting that it helps both the economy 

and the polity by enabling consumers and workers make informed decisions to support companies that adopt responsible labor and environmental practices that are 

consistent with the consumers’ and workers’ values. 

Whatever the views of the current Congressional majority about the trend of the 

NLRB’s case law on labor protest or other areas, there will be time enough for the 

losing party in those cases to seek review in the federal courts of appeals and for 

Members of Congress to call hearings to criticize the decisions later. To interfere 

with the Board’s adjudication of pending cases jeopardizes the due process rights 

of all the parties to the case and casts doubt on the ability of the administrative 

state to fairly adjudicate the statutory and constitutional rights of the parties that 

appear before it. 

Chairman ROE. Thank you, Ms. Fisk. 

And Mr. Fritts? 

STATEMENT OF JONATHAN C. FRITTS, ESQ., PARTNER, 

MORGAN, LEWIS & BOCKIUS 

Mr. FRITTS. Chairman Roe, Ranking Member Andrews, members 

of the subcommittee, thank you for inviting me to testify today. I 

am honored to appear before you. 

I am a partner in the law firm of Morgan, Lewis & Bockius. I 

represent employers in many industries regulated by the National 

Labor Relations Act. 

The act serves an important function in our national economy. 

Its primary purpose is to encourage unions and employers to resolve their disputes peacefully through the collective bargaining 

process. The act protects the right of employees to strike and the 

right of employers to lock out, but the act does not assume that the 

parties will be engaged in a constant state of industrial warfare. 

To the contrary, the act assumes that the threat of a strike or lockout will provide a strong incentive for the parties to resolve their 

disputes at the bargaining table. Once the parties reach an agree-
46 

ment, the act assumes that there will be labor peace during the 

term of the agreement. 

This system of collective bargaining was designed at a time when 

the strike was the primary weapon used by labor to exert pressure 

on an employer. What has changed in recent years is that unions 

increasingly believe that the strike is an ineffective weapon, so 

they are abandoning it in favor of the corporate campaign. 

Whereas the act carefully regulates the right to strike, corporate 

campaigns are difficult to regulate because they involve conduct 

that is arguably protected by the First Amendment. Strikes also 

differ from corporate campaigns in that a strike necessarily entails 

a loss of pay for the striking employees, which creates an incentive 

to resolve their dispute as quickly as possible. In contrast, corporate campaigns result in little or no economic harm to the employees, which means that the union can engage in a prolonged 

campaign without any real pressure from the employees to resolve 

the dispute. 

Before I discuss some recent NLRB decisions that involve corporate campaign tactics, I want to express my respect for the Board 

and its many employees who have dedicated their careers to administering the act. The issues presented to the Board often do not 

have easy answers, and there are multiple interests at stake. The 

interests of employees, unions, and employers are often in conflict, 

but a balance must be reached. It is said that people who work in 

labor relations are doing their job well when everyone is angry 

with them. I think that saying holds true for the Board. 

Employers seem to be more upset with the Board these days 

than unions or employees. The Board has issued a number of decisions that provide additional weapons for unions and employees to 

use against their employer in a corporate campaign. 

One of these cases holds that unions have the right to display 

large banners calling for a boycott of a secondary employer without 

violating the act’s secondary boycott provisions. Another case held 

that employees of AT&T had the right to wear T-shirts that said 

‘‘inmate’’ on the front and ‘‘prisoner of AT&T’’ on the back while 

they were on the job and visiting AT&T’s customers in their homes. 

And another recent case held that off-duty employees of a restaurant located in a hotel had the right to distribute handbills to 

hotel customers while on hotel property. 

There has been a lot of publicity surrounding the acting general 

counsel’s decision to prosecute a complaint against Boeing based on 

its decision to locate some additional 787 assembly work in South 

Carolina rather than at its union-represented facilities in Washington State and Oregon. 

What is remarkable to me about the Boeing case is that the acting general counsel found that Boeing satisfied its duty to bargain 

with the machinists’ union over the decision to locate this work in 

South Carolina. The Board found that the union had waived its 

right to bargain on the issue in its collective bargaining agreement 

with Boeing. 

In my view, the prosecution of the Boeing case does not advance 

the core purpose of the act, which is to promote industrial peace 

through the process of collective bargaining. The Boeing dispute arguably was resolved at the bargaining table when the union recog-
47 

nized Boeing’s right to determine the location where the work will 

be performed. Instead, the dispute has exploded into an intense 

public relations campaign as a result of the acting general counsel’s 

prosecution. 

Because Board litigation often takes years to resolve, the dispute 

is not likely to end anytime soon. This is an unfortunate outcome 

for all parties, regardless of who ultimately prevails in the litigation. 

This concludes my prepared testimony. Thank you. 

[The statement of Mr. Fritts follows:] 

Prepared Statement of Jonathan C. Fritts, Partner, 

Morgan, Lewis & Bockius LLP 

Chairman Roe, Ranking Member Andrews, and Members of the Subcommittee, 

thank you for your invitation to participate in this hearing. I am honored to appear 

before you today. 

By way of introduction, I am a partner in the law firm of Morgan, Lewis & 

Bockius LLP, where I represent employers in many industries under the National 

Labor Relations Act, including manufacturing, construction, maritime, retail food, 

and higher education. I am also an Adjunct Professor at Georgetown University Law 

Center, where I co-teach a course on labor law with a retired chief counsel of the 

National Labor Relations Board. Beginning in September 2011, I will serve as the 

management co-chair of the American Bar Association’s Committee on Practice and 

Procedure under the National Labor Relations Act.1

In my testimony today, I will describe the phenomenon of union corporate campaigns and how they relate to the structure and policies of the National Labor Relations Act (NLRA or Act).2 I will also discuss recent National Labor Relations Board 

(NLRB or Board) cases that relate to union corporate campaign tactics and what 

effect those cases have on employers that are the target of a corporate campaign. 

Finally, I will address the Boeing case and its relevance to the subject matter of 

this hearing. 

What Is a Corporate Campaign? 

One of the most frequently cited definitions of a corporate campaign is attributed 

to the current President of the AFL-CIO, Richard L. Trumka: 

Corporate campaigns swarm the target employer from every angle, great and 

small, with an eye toward inflicting upon the employer the death of a thousand cuts 

rather than a single blow.3

Unions engage in corporate campaigns as an alternative to calling a strike as a 

means of applying pressure on employers. This is because unions increasingly believe that the strike is an ineffective weapon of industrial warfare.4 A strike necessarily entails a loss of pay for the striking employees, which tends to have a mitigating effect on the duration of the labor dispute. Because both parties (the employer and the union-represented employees) suffer economic consequences during 

a strike, there is an incentive on both sides of the table to resolve the labor dispute 

as quickly as possible. 

During a corporate campaign, however, employees generally continue to work and 

receive pay. Therefore, employees suffer little or no economic harm as a result of 

the union’s campaign against their employer. This means that a union can wage a 

prolonged corporate campaign without any real pressure from the employees to resolve the underlying dispute. Consequently, the dispute may persist for as long as 

the employer is willing to resist the union’s demands and absorb the economic damage caused by the campaign. 

Corporate campaigns are used in various types of labor disputes. They are used 

during an organizing campaign in order to pressure an employer to remain neutral 

during the campaign and to recognize the union without an election. They also can 

be used as a means of creating leverage for the union in the context of negotiating 

a collective bargaining agreement on behalf of a group of employees that the union 

already represents. 

The target of the corporate campaign may not be the employer with which the 

union has a labor dispute. For instance, the union may engage in corporate campaign tactics against the employer’s customers, suppliers, lenders, creditors, or investors as a means of creating secondary pressure against the employer.5

The types of tactics employed in a corporate campaign vary widely, and are limited only by the union’s imagination. They typically involve efforts to generate nega-
48 

tive publicity for the employer though print, radio, or television advertisements or 

the display of billboards, banners, or inflatable rats. The union may coordinate these 

public relations activities with civic or religious leaders, politicians, or public interest groups. Corporate campaigns can involve calls for boycotts of the employer’s 

products, including through picketing, handbilling, or demonstrations at stores or 

other retail outlets. The union also may seek to apply personal pressure against the 

corporation’s officers and directors, through picketing or demonstrations at their 

residences or at social events. 

Corporate campaigns may involve other forms of pressure that have no apparent 

connection to the labor dispute. For instance, the union may lobby legislators or regulators to withhold government contracts, to block zoning approvals, or to deny public financing to the employer that is the target of the corporate campaign. The union 

also may file charges or initiate legal action under a variety of state or federal laws, 

such as environmental laws, securities laws, or employment laws. These claims or 

charges may then be withdrawn as soon as the labor dispute is resolved. 

Does Federal Labor Law Regulate Corporate Campaign Tactics? 

Corporate campaigns must be understood in the context of the structure and policy of the NLRA. The basic policy objective of the Act is to promote industrial peace 

through the process of collective bargaining.6 Somewhat paradoxically, the right to 

strike (and the employer’s corresponding right to lockout) promotes industrial peace 

by creating an incentive for the parties to negotiate and resolve their differences at 

the bargaining table.7 In most cases, the parties do not engage in a strike or a lockout, but instead decide to enter into an agreement that reflects each side’s actual 

or perceived economic leverage. 

Once the parties have entered into a collective bargaining agreement, the Act assumes that there will be labor peace during the term of the agreement. Section 8(d) 

of the Act prohibits the parties from engaging in a strike or lockout until at least 

60 days after they have provided written notice of their desire to negotiate a new 

agreement.8 In addition, the party seeking to modify the agreement is obligated to 

notify the Federal Mediation and Conciliation Service and any equivalent state 

agency, so that these agencies may help the parties resolve their negotiations peacefully.9

To further ensure industrial peace during the term of a collective bargaining 

agreement, Congress enacted Section 301 of the Labor Management Relations Act, 

which creates a federal cause of action to enforce the terms of the collective bargaining agreement, including the duty to resolve disputes through arbitration.10 The 

legislative history of Section 301 clearly reflects Congress’s expectation that employers should be able to run their businesses without the threat of economic warfare 

during the term of a collective bargaining agreement: 

The chief advantage which an employer can reasonably expect from a collective 

labor agreement is assurance of uninterrupted operation during the term of the 

agreement. Without some effective method of assuring freedom from economic warfare for the term of the agreement, there is little reason why an employer would 

desire to sign such a contract.11

Corporate campaigns are designed to ‘‘sidestep the labor laws’’ by creating new 

forms of economic warfare as an alternative to the carefully regulated right to 

strike, either during or after the term of a collective bargaining agreement.12 There 

is no provision of the NLRA that regulates ‘‘corporate campaigns.’’ To the contrary, 

unions typically employ corporate campaign tactics that cannot be regulated because 

they fall within the arguable scope of First Amendment speech or petitioning activity.13 Thus, while a corporate campaign may have a destructive impact on an employer’s business, the employer is largely without a remedy to counteract the union’s 

campaign. 

Recent NLRB Cases That Relate to Union Corporate Campaign Tactics 

Some recent NLRB decisions provide additional weapons for unions to use in a 

corporate campaign. For instance, the Board recently decided that a union’s display 

of large (3 to 4 feet high and 15 to 20 feet wide) stationary banners, calling for a 

boycott of a neutral employer’s business, did not violate the Act’s secondary boycott 

provisions.14 The Board held that the display of these banners outside the secondary 

employer’s facility did not ‘‘coerce’’ the secondary employer and therefore did not 

constitute an unlawful secondary boycott under the Act. 

As a result of this decision, unions are more likely to utilize large banners in a 

corporate campaign. Banners such as these typically are not directed against the 

employer with which the union has a labor dispute. Instead, they are used to pressure companies that do business with the target employer. Displaying a large, and 

often provocative, banner may be as effective, if not more effective, than traditional 
49 

picketing, which is regulated by the Act’s secondary boycott provisions. By holding 

that banners, unlike picketing, constitute non-coercive speech, the Board has effectively exempted these types of banners from regulation under the Act. 

In another recent case,15 the Board held that AT&T could not prohibit employees 

from wearing, while on the job and visiting customers in their homes, t-shirts that 

said ‘‘INMATE #’’ on the front and ‘‘PRISONER OF AT$T’’ on the back. The Board 

dismissed the employer’s concern that customers would be disturbed by an employee 

arriving at their home wearing this t-shirt. The Board found that the ‘‘totality of 

the circumstances would make it clear that the technician was one of [AT&T’s] employees and not a convict.’’ 16 Member Hayes dissented, arguing that the Board majority ‘‘failed to give sufficient weight to the potential for employees wearing these 

shirts to frighten customers in their own homes and thereby to cause substantial 

damage to [AT&T’s] reputation.’’ 17

The AT&T case demonstrates that the current Board will allow unions and employees to engage in corporate campaign tactics while they are on the job. This 

means that employees can work and collect pay from their employer while they are 

engaged in a form of economic warfare against their employer. Such tactics stand 

in contrast to the traditional strike, which involves a deliberate withholding of labor 

(and therefore a foregoing of pay) by employees who wish to protest their wages, 

hours, or working conditions. For this reason, a corporate campaign is viewed by 

unions and employees as a superior alternative to a traditional strike because a corporate campaign is effectively a ‘‘strike with pay.’’ 

In addition to permitting employees to engage in corporate campaign tactics while 

on the job, the current Board is inclined to permit employees to engage in such tactics while on the employer’s property. For instance, in a case arising in the hotel 

industry, the Board held that off-duty employees of a restaurant company are entitled to distribute handbills while on the hotel’s property.18 Even though the employees were employed by the restaurant company and not the hotel, the Board concluded that the hotel violated the Act when it prohibited the off-duty restaurant employees from distributing handbills to hotel customers while on hotel property.19

The Board is currently considering the extent to which non-employee union agents 

should be permitted to distribute anti-employer literature on the employer’s property, even if the union has no labor dispute with that employer.20 On November 12, 

2010, the NLRB solicited briefs on the question of whether the Board should continue to apply its existing precedent, which holds that an employer may not prohibit 

non-employee union agents from soliciting or distributing literature on its property 

if the employer allows charitable or civic organizations to solicit on its property.21

Several federal courts of appeals have criticized the Board’s current standard in 

cases involving non-employee union agents who seek access to an employer’s property in order to persuade customers to boycott the employer.22 It remains to be seen 

whether the Board will adhere to its precedent despite the contrary views of these 

federal courts of appeals. 

How Does the Boeing Case Fit in to All of This? 

The Acting General Counsel’s much-publicized decision to prosecute an unfair 

labor practice complaint against Boeing can be viewed as a corporate campaign tactic in the sense that it involves an effort by the International Association of Machinists and Aerospace Workers (IAM) to obtain an outcome that the union was not able 

to achieve at the bargaining table. 

The complaint alleges that Boeing violated the Act when it decided to locate a second production line for its 787 Dreamliner aircraft at a facility in South Carolina, 

rather than at its IAM-represented facilities in Washington State and Oregon.23 The 

theory of the complaint is that Boeing made this decision in order to retaliate 

against the IAM-represented employees based on their past strike activity at the 

Washington State and Oregon facilities. 

This complaint will be litigated before an NLRB Administrative Law Judge at a 

hearing beginning on June 14, 2011. I am not in a position to comment on the issues 

and allegations that will be litigated at the hearing. I am not privy to any of the 

evidence that will be presented in the hearing, beyond what has been reported publicly. I will, however, comment on a significant issue that is not going to be litigated 

in that hearing. 

According to the ‘‘fact sheet’’ published on the NLRB’s website,24 the Acting General Counsel decided not to prosecute any allegation that Boeing violated its duty 

to bargain with the IAM over the decision to locate the second 787 production line 

in South Carolina. This is because the Board concluded that the IAM ‘‘waived its 

right to bargain on the issue in its collective bargaining agreement with Boeing.’’ 25

The Board’s conclusion that Boeing had the unilateral right, under its collective 

bargaining agreement, to locate this work in South Carolina is a significant one. 
50 

The Board’s standard for proving that a union has waived its right to bargain over 

an issue is an exceedingly high one, requiring proof that the union’s waiver was 

‘‘clear and unmistakable.’’ 26 In other words, the employer and the union must ‘‘unequivocally and specifically express their mutual intention to permit unilateral employer action with respect to a particular employment term, notwithstanding the 

statutory duty to bargain that would otherwise apply.’’ 27 This standard ‘‘reflects the 

Board’s policy choice, grounded in the Act, in favor of collective bargaining concerning changes in working conditions that might precipitate labor disputes.’’ 28

In this case, the Board found that Boeing and the IAM negotiated about Boeing’s 

right to perform work in other locations and ‘‘unequivocally and specifically’’ agreed 

that Boeing was entitled to make these decisions unilaterally. Boeing exercised that 

right when it decided to locate the second 787 Dreamliner production line in South 

Carolina. The Board concluded that Boeing had no further obligation to bargain 

with the IAM over this decision. 

Nonetheless, the Acting General Counsel decided to challenge Boeing’s decision as 

a violation of the NLRA based on a theory of discrimination and retaliation under 

Section 8(a)(3) and (1) of the Act. If the Acting General Counsel succeeds on this 

theory, he will ask the Board to order Boeing to move the second 787 production 

line from South Carolina to the IAM-represented facilities in Oregon and/or Washington State. This remedy, if granted, will override Boeing’s collectively bargained 

right to decide where it wishes to perform this work. 

In my view, this prosecution does not advance the core purpose of the Act—promoting industrial peace through the process of collective bargaining. Certainly, the 

Acting General Counsel has an obligation to protect the rights of employees to engage in strikes and other concerted activity protected by the Act. But this is not a 

case where the employees are in the vulnerable early stages of an organizing campaign. The Boeing employees have been represented for decades by a powerful and 

sophisticated union, the IAM. They have a mature collective bargaining relationship, with an agreement that no doubt reflects a series of carefully negotiated compromises over time. By stepping into this dispute, the Acting General Counsel is altering the delicate balance of power and likely undermining the deal that the parties negotiated when the IAM agreed to recognize Boeing’s right to determine the 

location where the additional 787 assembly work will be performed. 

For these reasons, the Acting General Counsel’s decision to prosecute this case 

does not serve ‘‘the Board’s policy choice, grounded in the Act, in favor of collective 

bargaining concerning changes in working conditions that might precipitate labor 

disputes.’’ 29 Board litigation can be a distraction from the bargaining process. And 

because Board litigation often takes years to resolve, it can disrupt labor relations 

and the expectation of industrial peace during the term of a multi-year collective 

bargaining agreement. 

The Board’s job is not an easy one, to be sure. There are important rights and 

interests on both sides of the table. And in a labor dispute of this magnitude, a 

breakdown in the collective bargaining relationship can have a profound effect on 

the national economy. In these circumstances, the aggressive prosecution of unfair 

labor practice charges may ultimately disrupt, rather than promote, industrial 

peace. A dispute that might otherwise have been resolved at the bargaining table 

(and arguably was resolved by virtue of the IAM’s waiver in this case) has exploded 

into an intense public relations campaign as a result of the Acting General Counsel’s decision to prosecute. That is an unfortunate and costly result, whatever the 

outcome of the litigation may be. 

This concludes my prepared testimony. Thank you again for the invitation to appear today. I would be happy to answer any questions that Members of the Subcommittee may have. 

ENDNOTES

1 I am not speaking on behalf of Morgan, Lewis & Bockius, the Georgetown University Law 

Center, or the American Bar Association, and my testimony should not be attributed to any of 

these organizations. My testimony reflects my own personal views, although I wish to thank 

Ross H. Friedman and David R. Broderdorf for their efforts in helping me preparing this testimony. 2 29 U.S.C. §§ 151 et seq. 

3 Jarol B. Manheim, THE DEATH OF A THOUSAND CUTS: CORPORATE CAMPAIGNS 

AND THE ATTACK ON THE CORPORATION (2001). 4See Cynthia L. Estlund, The Ossification of American Labor Law, 102 COLUM. L. REV. 

1527, 1605 (2002). 5See id. 

6See Fibreboard Paper Prods. Corp. v. NLRB, 379 U.S. 203, 211 (1964) (‘‘One of the primary 

purposes of the Act is to promote the peaceful settlement of industrial disputes by subjecting 

labor-management controversies to the mediatory influence of negotiation.’’); Local 24, Int’l Bhd. 
51 

of Teamsters v. Oliver, 358 U.S. 283, 295 (1959) (‘‘The goal of federal labor policy, as expressed 

in the Wagner and Taft-Hartley Acts, is the promotion of collective bargaining * * * and thereby to minimize industrial strife.’’). 7See NLRB v. Insurance Agents’ Int’l Union, 361 U.S. 477, 489 (1960) (‘‘The presence of economic weapons in reserve, and their actual exercise on occasion by the parties, is part and parcel of the system that the Wagner and Taft-Hartley Acts have recognized.’’). 8 29 U.S.C. § 158(d)(1) & (4). 

9 29 U.S.C. § 158(d)(3). 

10 29 U.S.C. § 185; see also Textile Workers Union v. Lincoln Mills of Alabama, 353 U.S. 448, 

455 (1957) (finding that Section 301 ‘‘expresses a federal policy that federal courts should enforce these agreements on behalf of or against labor organizations and that industrial peace can 

be best obtained only in that way’’). 11Lincoln Mills, 353 U.S. at 454 (quoting S.Rep. No. 105, 80th Cong., 1st Sess., p.16). 12See Estlund, supra note 4, at 1603. 13See Edward DeBartolo Corp. v. Florida Gulf Coast Bldg. & Constr. Trades Council, 485 U.S. 

568, 588 (1988) (holding that union handbills calling for boycott of shopping mall did not constitute a secondary boycott in violation of the NLRA because of potential First Amendment concerns); Linn v. United Plant Guard Workers, 383 U.S. 53, 65 (1966) (holding that employer may 

pursue defamation action against union only if the defamatory statements were made ‘‘with 

knowledge of their falsity or with reckless disregard of whether they were true or false’’). 14 Carpenters Local 1506 (Eliason & Knuth of Arizona, Inc.), 355 NLRB No. 159 (Aug. 27, 

2010). 15 AT&T Connecticut, 356 NLRB No. 118 (March 24, 2011). 16 Id., slip op. at 1. 17 Id., slip op. at 3. 18 New York New York Hotel & Casino, 356 NLRB No. 119 (March 25, 2011). 19Member Hayes dissented in this case as well. Id., slip op. at 15-19. 20 Roundy’s Inc, 30-CA-17185. 21Sandusky Mall Co., 329 NLRB 618, 622 (1999). If the employer has permitted only a few 

‘‘isolated’’ acts of charitable solicitation on its property, the Board might permit the employer 

to exclude non-employee union agents from its property. Id. at 621. 22See, e.g., Salmon Run Shopping Ctr. LLC v. NLRB, 534 F.3d 108, 114 (2d Cir. 2008); Sandusky Mall Co. v. NLRB, 242 F.3d 682, 685-86 (6th Cir. 2001); Be-Lo Stores v. NLRB, 126 F.3d 

268, 284 (4th Cir. 1997). 23The Boeing Company, Case 19-CA-32431 (April 20, 2011), available at http:// 

www.nlrb.gov/sites/ default/files/documents/443/cpt—19-ca-032431—boeing——4-20-2011— 

complaint—and—not—hrg.pdf. 24 Boeing Complaint Fact Sheet, available at http://www.nlrb.gov/boeing-complaint-fact-sheet. 25 Id. 26See Provena St. Joseph Medical Center, 350 NLRB 808, 811 (2007). 27 Id. 28 Id. 29Provena St. Joseph Medical Center, 350 NLRB at 811. 

Chairman ROE. Thank you, Mr. Fritts. 

Mr. Andrews, questions? 

Mr. ANDREWS. Thank you, Mr. Chairman. 

I would like to thank the witnesses for their preparation and 

their compelling testimony this morning. 

Mr. Fritts, thank you for the respect that you showed to the employees and the board members of the NLRB. It is appreciated, and 

I thought it was very appropriate. 

You have accomplished a lot in your career as a lawyer representing parties in labor disputes—right? That is essentially what 

you do? 

Mr. FRITTS. Yes. 

Mr. ANDREWS. Let’s assume that you were representing an employer in a labor dispute and there was controversy around what 

the employer did. And let’s say that the workers who were contesting things with your client said that your employer was engaging in a systematic campaign to coerce the employees, you know, 

to avoid their collective bargaining rights. And the committee decided to write you a letter that said, we want to see all of the communications that exist between you and your client, you and that 

employer, about this alleged coercion campaign. 

Would you comply with that request? 
52 

Mr. FRITTS. Ranking Member Andrews, there would certainly be 

attorney-client privilege issues associated with that. But your question raises a policy issue that currently is before the Board—— 

Mr. ANDREWS. Well, look, my question was, would you comply 

with the request? Is the answer ‘‘no’’? 

Mr. FRITTS. I would not disclose attorney-client privileged communication. 

Mr. ANDREWS. Okay. And the basis of your refusal to disclose 

that would be what, would be the attorney-client privilege? And 

could you explain to us why you think that would be an invasion 

of that privilege? 

Mr. FRITTS. Well, to the extent the communications reflected advice of counsel or efforts by me as counsel to prepare for litigation, 

they would be privileged. 

I would also say that to the extent, in preparing for any type of 

litigation, the employer had collected statements from witnesses, 

employee witnesses, and there was a promise of confidentiality, 

that employer would seek to refuse to disclose those statements to 

the Board or to any third party prior to any litigation, just as the 

Board—— 

Mr. ANDREWS. So the basis of your refusal to turn it over would 

be the attorney-client privilege and I guess what we would call the 

attorney-work-product privilege? 

Mr. FRITTS. Right. 

Mr. ANDREWS. I am going to read to you from a letter from this 

committee to the acting general counsel of the NLRB of May 5th 

in which the committee directs the acting general counsel to turn 

over, quote, ‘‘all documents and communications between NLRB 

Region 19,’’ which is where the Boeing complaint originated, ‘‘and 

the NLRB national office addressing the Boeing complaint.’’ 

Do you think that that request violates the attorney-client privilege? 

Mr. FRITTS. Well, I think, to the extent there is privileged communications, the general counsel might be entitled to withhold 

those. But I think—— 

Mr. ANDREWS. Let’s examine that extent. If the general counsel 

has said to the people in the field office, ‘‘What material facts 

might exist that would show a violation of the National Labor Relations Act, and give me your opinion as to whether you think these 

facts are credible and whether they rise to that level,’’ would that 

be within the attorney-client privilege? 

Mr. FRITTS. Well, I think what you are referring to is what the 

Board, historically, zealously defends, and those are statements of 

witnesses who have provided affidavits in the course of investigating the complaint. 

Mr. ANDREWS. Right. And do you agree the Board should zealously defend that privilege? 

Mr. FRITTS. I agree that they do, and I agree that they should. 

And I think they also should—— 

Mr. ANDREWS. So, do you agree that this characterization that I 

have given in this letter of May 5th would require those communications to be turned over? 

Mr. FRITTS. Well, it depends on, I think, the scope of what is in 

the acting general counsel’s file—— 
53 

Mr. ANDREWS. Well, let’s say if there were statements from witnesses that would be material witnesses that were in those documents, you believe they shouldn’t be turned over, right? 

Mr. FRITTS. I believe that is consistent with the Board’s longstanding position. And I think the Board’s longstanding position—— 

Mr. ANDREWS. Okay. I agree with you. I agree with you that this 

request from the committee was inappropriate. 

And I would yield back the balance of my time. 

Chairman ROE. I thank the ranking member. 

Dr. DesJarlais? 

Mr. DESJARLAIS. Thank you, Mr. Chairman. 

And thank you to all our witnesses for being here today. 

I wanted to start a little bit off-topic and ask if any of you are 

aware of a draft Executive order that has been brought forth by 

President Obama requiring companies who contract with the Federal Government to disclose any campaign contributions in advance 

of receiving a contract. Are any or all of you familiar with that Executive order? 

Mr. Bego, yes. 

Ms. Fisk, no. 

Okay. Well, Mr. Bego, you had mentioned that when the SEIU 

had come to you that they had asked that you give a list of all your 

employees and homes and addresses. So you are familiar with the 

draft Executive order. 

And for those of you who are not, it is an order where any company seeking a government contract must supply, in advance of 

being awarded the contract, disclosure of all financial contributions, not only for themselves but also for their employees. 

And we discussed that in the Oversight Committee. And, basically, one of the glaring exemptions was that unions were not required to give the same information. 

And I thought, maybe, Ms. Fisk, you would have an opinion on 

that. But you have no knowledge of that draft Executive order? 

Ms. FISK. No, I haven’t seen the draft Executive order. 

Mr. DESJARLAIS. Okay. 

Mr. Bego, you have. Does that particular order bother you in the 

same way? 

Mr. BEGO. Well, I have not had the opportunity to read the whole 

thing, but I am familiar with it. And I—— 

Mr. DESJARLAIS. Okay. All right. Well, let me move on. 

And as we discussed here already today, that unions use diverse 

tactics to disrupt an employer’s business, including legislation, political/religious appeals, assaulting complaints to regulatory agencies, et cetera, negative publicity campaigns, such as banners and 

as we spoke of. 

How many unfair labor practice charges were filed against your 

company during SEIU’s corporate campaign? 

Mr. BEGO. Well, initially, in the first 11 or 12 months, we had 

36 them filed against us. By the time it was over, it was close to 

50. 

Mr. DESJARLAIS. How much did it cost to defend these charges? 

Mr. BEGO. Well, just our attorney fees alone were close to a million dollars in defending ourselves. 
54 

Mr. DESJARLAIS. And, obviously, that had a great impact on your 

company? 

Mr. BEGO. Well, it did. And the thing is, we are fortunate enough 

that we could withstand it. The problem is that, today, most employers can’t or aren’t willing to go through what I call the psychological and financial warfare that these corporate campaigns entail. 

And I can tell you categorically that some of the other cleaning 

contractors that were being attacked in our area gave in because 

psychologically they couldn’t take it, financially they couldn’t take 

it. One case of one contractor I know, it got so bad, his wife told 

him that, ‘‘Look, sign the neutrality agreement. If you don’t, I am 

going to divorce you.’’ 

Mr. DESJARLAIS. Okay. 

Mr. Karnas, the same line of questioning to you. What tactics did 

the carpenters use against your company? 

Mr. KARNAS. Well, they started with bannering, and they have 

done a lot of active pickets on job sites. They have gone to our office complex and have picketed in front of our office complex. 

During one event, they blocked the ingress and egress to our office property. I had painted the property line with a utility paint 

in front of the property, and when they came there, they promptly 

kicked all the utility paint away and violated our private property 

rights. The next day, we did the same thing, and they also kicked 

away the paint. There was some minor vandalism. 

So my biggest concern is that, the rulings allow bannering but, 

quite often, they overstep their bounds and they do illegal acts. 

Mr. DESJARLAIS. How much did it cost your company? 

Mr. KARNAS. Well, it has cost me tens of thousands of dollars in 

legal fees, and it has cost me in business volume, I would say, 

probably $100,000 in contracts. 

Mr. DESJARLAIS. Any layoffs of employees? 

Mr. KARNAS. Well, yes, I have had a tremendous amount of layoffs. I mean, it is in conjunction with the economy as well as the 

union bannering. I basically have very minimal work in my hometown of Albuquerque. 

Mr. DESJARLAIS. All right. 

Thank you all. 

I am about out of time, so I will go ahead and yield back, Mr. 

Chairman. 

Chairman ROE. Thank you. 

Mr. Kucinich? 

Mr. KUCINICH. Thank you very much, Mr. Chairman. 

In looking at this hearing, which I appreciate the chairman calling, we are really looking at some deeper constitutional questions 

and questions of labor law, as to whether or not the intention of 

the National Labor Relation Act can actually be satisfied anymore. 

Because if you see attempts to destructively undermine the principles underpinning the National Labor Relations Act and to further attack those who are trying to work together to settle their 

disputes, then you have to ask questions of whether or not the rule 

of law can prevail when it comes to the insistence, in this case, of 

certain corporate interests to have their way notwithstanding what 

the law is. 
55 

Case in point, we know that the situation at Boeing, in brief, was 

a question of unlawful retaliation against union workers and that 

it was a retaliation for previous strikes. This is what the NLRB essentially found, that a new plant was being located in South Carolina because machinists had gone on strike and Boeing had determined and made no secret that they were going to relocate to 

South Carolina because of these strikes. However, what Boeing 

overlooked and what the NLRB determined is that there was a violation of the National Labor Relations Act because of retaliation for 

protected labor activity. And that is really what we are talking 

about here: what is protected and what is not protected. 

I am not aware, Mr. Chairman, Ranking Member Andrews, I am 

not aware that Boeing filed a counterclaim here to say that there 

was a violation on the other side, because the Labor Relations Act 

gives rights to both parties, as we know. 

So we have here at issue whether or not Congress should be intervening even more deeply in this dispute by upending the position of the National Labor Relations Board. 

Now, Ms. Fisk, do you see any problems with the violation of 

due-process rights of workers if a congressional committee goes in 

and tries to get the work product of the NLRB, which basically 

made the decision advancing a case saying that there was a violation of the Labor Relations Act which resulted in work being moved 

out of an area, in a sense, in retaliation? 

Is there a question, not just of what the Board’s rights are—we 

got the attorney-client privilege—but is there a question of an undermining of the due-process rights of the workers? 

Ms. FISK. Yes, Representative Kucinich, there is. 

The Board induces witnesses to testify about the circumstances 

in a workplace under promises of confidentiality. And the Board 

stands in the shoes of the individual workers in enforcing their 

statutory rights. 

An individual can’t file a lawsuit in Federal court claiming that 

his rights were violated under the National Labor Relations Act. 

Only the Board decides which cases to prosecute. And so, when 

Congress interferes in the Board’s processes to try and sway the 

outcome, it violates the rights of the individual workers that the 

Board is trying to protect. 

Mr. KUCINICH. Thank you very much, Ms. Fisk. 

Mr. CHAIRMAn and members of the committee, what we are looking at here is a double violation of workers’ rights. On one hand, 

workers are told that their jobs are going to be moved simply because they took up the right to strike, which is a protected right 

under the National Labor Relations Act. And there is a further violation by attacking their due-process rights, when, in fact, they 

have had a decision in their favor at the National Labor Relations 

Board. 

Now, we have to put this in context. The right to strike met a 

corporate response, which was replacement workers. Corporate 

campaigns, which were the only other way that unions defending 

their workers could appeal to the community in which they live— 

it is a free-speech right—appeal to the community in which they 

live to look at the corporate conduct and see if this is the kind of 
56 

conduct you want to obtain in the community, now that is under 

attack. 

So we have the right to organize under attack, the right to collective bargaining, the right to strike, and the First Amendment right 

to free speech all under attack here. And we have to look at this 

in a larger context, because what is happening in this country right 

now, as you look at the State areas, where unions are under attack 

at the State level, this is really an attack on free speech, the right 

to organize, the right to collective bargaining. 

I thank the chair for calling this hearing because it gives us a 

chance to discuss these things. Thank you very much. 

Chairman ROE. I thank the gentleman. 

Mr. Wilson? 

Mr. WILSON. Thank you, Mr. Chairman. 

And thank you, witnesses, for being here. 

Over the decades, I have had the extraordinary privilege of working in a bipartisan manner, Democrats and Republicans, to recruit 

industry to South Carolina. We work together—municipal, county, 

regional, State, Federal—to recruit industry, and we have been 

very, very successful. But it has become a real shock to the people 

of our State, our region, the recent attack by the NLRB, a threat 

to job creation in our State. 

I go back—I served on the board of the State Department of 

Commerce with Governor Jim Edwards to recruit Michelin to 

South Carolina. We have the North American headquarters of 

Michelin in South Carolina, five plants across the State, two in the 

district that I represent. It has been very successful. Just 2 weeks 

ago, an expansion was announced for Earthmover tires to be developed and built in the district I represent. 

We are very grateful that the late Governor Carroll Campbell recruited BMW to locate in South Carolina. It has been phenomenally successful. Every X5, X6, Z3, Z4 in the world is made in 

South Carolina. In fact, they just announced an expansion of the 

plant 2 years ago—it has been completed—to increase production 

from 160,000 cars to 240,000 cars. 

Now we have Boeing. I want to give credit to our Secretary of 

Commerce, Joe Taylor; the chairman of the State Senate Finance 

Committee, Hugh Leatherman. They worked with Boeing to 

bring—and it has even been agreed to in Politico today for a new 

production line. Not moving a line, not moving jobs, it is a new production line, the second line. 

Significant portions of 787s are already being made in South 

Carolina. 

It is particularly a shock because just 2 months ago—I was there 

for the groundbreaking a year and a half—2 months ago, I was 

there; the building is complete. A million square feet. The American people need to know this building is there. A thousand people 

have been employed. In fact, they announced 2 months ago solar 

panels to provide for the energy to be used at that plant be one of 

the largest investments in the world to produce solar power. 

And then out of the blue, the reckless decision by NLRB. It is 

not a shift of jobs from the Washington State. It is very clear that 

new jobs have been created in Washington State since this announcement. 
57 

With that background, Mr. Fritts, if you could tell us, in 2009, 

there was 16,000 unfair labor practices filed in our country, and 

what has been your experience—how many years have you worked 

in this field and your experience and then what recommendation, 

or do you have any, for Members of Congress to stop a frivolous 

complaint? 

Mr. FRITTS. In my practice, I try very hard to avoid a client having a charge filed against them, and if the charge is filed, I work 

very hard to either have it dismissed or settled in some fashion, 

and the vast majority of unfair labor practice charges filed are ultimately either dismissed and settled in some fashion. But in that 

process of determining whether a charge has merit through the 

general counsel’s investigation, there is a lot of work that goes into 

that, a lot of cost for the employer that goes into that, and unfortunately, because of the politicization of the board and the policies of 

the act and the shift in precedent, an employer can often be in the 

position of having to defend the charge that is a vehicle for changing the law. And so that is what I try to work to avoid and avoid 

being in the position of having an unfair labor practice trial. 

Mr. WILSON. And I want to congratulate Mr. Bego and Mr. 

Karnas for surviving. 

It was Samuel Gompers, the father of the American labor movement, who indicated the greatest threat for American labor is a 

failed business. And so I want to thank you for succeeding. 

And Mr. Bego, your positive attitude, about $1 million in attorney’s fees, as an attorney myself, I am startled that you have such 

a positive attitude. But I was a real estate attorney, not litigation. 

With that, do you have a recommendation to other businesses, either one of you, as to how to face these type of charges. 

Mr. BEGO. Well, it is very difficult. Like I said, they filed 36 of 

them against us and most of them are very, very frivolous. I will 

give you a couple of real quick. We weren’t allowing them to wear 

union buttons, which we were. We just wouldn’t allow them to 

wear them over our logo because we have to be identified when we 

are in the buildings at night. But they put them there on purpose 

so that they get stract from our supervisors that you have got to 

move them. Then they would go down and file an unfair labor practice that they were told to remove them, which was not the case. 

Another one was that one of our supervisors walked—put his 

hand in the pocket of an employee to get out union information. 

They do these because they know it is his word against her word 

or vice versa, and they know it is hard for the company to prove. 

In most cases, the NLRB will uphold these. So, unfortunately, in 

those types of cases, the business is spending money to defend 

themselves. 

Mr. WILSON. Again, thank you very much. 

Our State is very grateful to have a right-to-work law. Thank 

you. 

Chairman ROE. Thank you. 

Mr. Tierney. 

Mr. TIERNEY. Thank you very much. 

Mr. Bego, in your testimony, you asserted that you had no problem basically with unions. In fact, at one point, you said, well, if 

you want to have a union, fine. 
58 

I see that, but when I look at your Executive Management Services, Inc., employee manual for hourly employees, you make these 

statements: Indeed, we believe that a union would serve only to 

hurt our profitability and, thus, our job security. Unions can adversely affect production by narrow work classifications, silly grievances, strikes and inflexibility. It is our positive intention to oppose 

unionism at every proper and lawful means. 

It goes on and on and on that basis. Do you consider that a popular attitude towards unionism? 

Mr. BEGO. I don’t believe that is our manual, sir, but anyway. 

Mr. TIERNEY. We can send it down for you to look at it so, yeah. 

Mr. BEGO. Okay. Our intent is to stay nonunion unless our employees come to us. 

Mr. TIERNEY. Okay. It is interesting to note that you—— 

Mr. BEGO. I haven’t seen the latest one, okay, that is fine. 

Mr. TIERNEY. But you are the CEO? 

Mr. BEGO. Yes, I am, sir. 

Mr. TIERNEY. You wrote this book as well, ‘‘The Devil at My 

Doorstep,’’ on that, and you mention in your testimony as well. In 

that book, you contended that the Obama administration was 

under pressure from the Service Employee International Union, 

and under that pressure, they weighed in with the National Labor 

Relations Board’s general counsel to urge him to take an appeal of 

an administration decision that you had won. 

What you say is, despite your attorney’s belief that the appeal by 

the NLRB on the union’s behalf made no sense, it was not unexpected and very clear to me, in my mind—and I am not a conspiracy theory believer—Stern and the SEIU were introducing 

their proclaimed persuasion of power via their association with the 

White House. I believe that the SEIU contacted the Obama administration when they learned of the decision, who in turn made a 

call to the general counsel of the NLRB in Washington, D.C., and 

demanded an appeal of the case. 

Mr. Bego, were you aware that Ron Meisberg, who was then the 

NLRB general counsel, was in fact appointed by the Bush administration? 

Mr. BEGO. Yes, I am, sir. 

Mr. TIERNEY. And you are aware that the Bush administration 

board had favored generally employers in a lot of different instances, right? 

Mr. BEGO. Well, that is true. 

Mr. TIERNEY. And you ultimately prevailed in front of the 

Obama-appointed National Labor Relations Board in June of 2010; 

isn’t that right? 

Mr. BEGO. Yes. Are you going to let me answer? 

Mr. TIERNEY. Well, I just asked you, was that right, yes or no? 

Mr. BEGO. Yes, but I would like to—— 

Mr. TIERNEY. Okay. And do you believe that that was a fair decision? 

Mr. BEGO. We won after going through 2 years—— 

Mr. TIERNEY. Do you believe it was a fair decision? 

Mr. BEGO. We won after 2 years with appeals hearings and waiting on a decision that was appealed. We won the appeals hearing, 

okay. 
59 

Mr. TIERNEY. Do you believe it was fixed? 

Mr. BEGO. Which the administrative law judge overwhelmingly 

found in our favor and said that the union’s testimony was contrived and unbelievable, and yet despite that, the National Labor 

Relations Board appealed the decision—— 

Mr. TIERNEY. And you won, correct? 

Mr. BEGO. And the reason we won—— 

Mr. TIERNEY. And do you think that in the board deciding that 

you were correct, that you got a fair resolution by that board? 

Mr. BEGO. Only because we kept meticulous records. Most companies can’t afford or take the time to do that. 

Mr. TIERNEY. Do you think that the fact that the President has 

the CEO of Boeing on his Export Council in any way means that 

Boeing has undue influence on National Labor Relations Board decisions? 

Mr. BEGO. I have no comment on that. I don’t know the situation 

there. 

Mr. TIERNEY. You had a theory here that Andrew Stern—— 

Mr. BEGO. Well, Andrew Stern had been in the White House at 

that point about 27 times and we know that—— 

Mr. TIERNEY. How about Jeffrey Immelt, the CEO of General 

Electric, who is now on the President’s Economic Jobs Council; do 

you think he has undue influence on National Labor Relations 

Board decisions? 

Mr. BEGO. I wouldn’t have any idea. 

Mr. TIERNEY. Mr. Fritts, you testified that the company has a 

right to relocate where it wants, and they had settled that matter 

on the negotiating table on that issue. But I want to ask, that is 

correct, right? 

Mr. FRITTS. That is the finding of the acting general counsel. 

Mr. TIERNEY. Now, Ms. Fisk, do you see any distinction at all between the labor union and the company deciding that it would be 

the company’s right to decide where to locate and a distinguishable 

issue of whether or not the company can violate the National Labor 

Relations Act in discriminating in having conduct? 

Ms. FISK. Yes. There is a huge distinction. It is common for collective bargaining agreements to give the employer the right to 

make certain kinds of entrepreneurial or business decisions, but a 

collective bargaining agreement cannot waive the individual statutory rights of the members of the union to be free from discrimination on the basis of Section 7 rights. 

Mr. TIERNEY. Thank you. 

I yield back, Mr. Chair. 

Chairman ROE. I thank the gentleman. 

Mr. Rokita. 

Mr. ROKITA. Thank you, Mr. Chairman. 

I want to again thank all the witnesses for their time here today 

and remind them and the audience that the witnesses aren’t under 

trial here today. 

This isn’t some kind of trial. In fact, the duty of this committee 

is to have oversight jurisdiction on the NLRB, and each of you are 

helping in doing that today. So thank you. 

Mr. Bego, in light of that, do you want to add anything to your 

previous answers from questions from Member Tierney? 
60 

Mr. BEGO. The fact is, and you know, we have always been an 

employee-friendly employer. And yes, we have our employee handbook, and we do believe that workers, if given the opportunity to 

work on their own and their free choice, perform very well under 

that atmosphere. Now that doesn’t mean we are anti-union. 

As I said during the introduction, we gave the SEIU many, many 

opportunities to hold an election. In fact, I took out a half page ad 

in the ‘‘Indianapolis Star,’’ I believe in the summer of 2007, where 

we asked the union to have an election, and they refused to do it. 

My guess on that is, is you only need 30 percent to petition for election. I don’t think they had anywhere close, and that is probably 

drawn out by the fact that they finally held a strike against our 

company in 2008 where they got 10 of our employees out of 400 to 

go on strike. That is less than 3 percent. 

Mr. ROKITA. I will follow up on that point, Mr. Bego. Did the 

SEIU provide you any evidence that employees of EMS invited 

them to begin unionization proceedings? 

Mr. BEGO. None at all. In fact, I have never received any information on that. 

Mr. ROKITA. And then following up on my comment at the beginning of this questioning that we have a constitutional duty on this 

committee and as Members of Congress to oversee the Federal Government, specifically here the NLRB, and understanding that one 

of the two primary functions of the NLRB is to prevent and remedy 

unlawful acts by either employers or unions—so the idea is and as 

the law that created the NLRB contemplated—that was supposed 

to be an arbiter, and an unbiased one and given the fact that you 

must be one of the few people in America that have had this many 

cases before the NLRB, do you care to comment at all as to whether the NLRB has been a fair arbiter of your cases, and can you give 

any specific examples? 

Mr. BEGO. Well, I believe that, you know, the playing field at this 

point is unlevel, and I think that is seen in the 36 unfair labor 

practices they filed against us, initially about 10 or 11 of them 

were upheld, ones like the buttons and the guy putting his hand 

in the employee’s pocket. And these continued to be upheld until 

we finally filed 33 unfair labor practices against the SEIU in 1 day. 

Mr. ROKITA. That is what I thought; you went on the offensive 

at one point. 

Mr. BEGO. Yeah, and that was the only way for us to have an 

opportunity. Otherwise, we would have continued to be under assault. 

Mr. ROKITA. Thank you. 

Mr. Karnas, hearing that testimony, and I couldn’t remember, do 

you—did you have cases before the NLRB? 

Mr. KARNAS. I do not, no, sir. 

Mr. ROKITA. Okay. Thank you. 

Mr. Bego, you spoke of the neutrality agreement which you chose 

not to sign. Do you know of companies that have chosen to sign 

these agreements, and if so, can you explain to the committee the 

outcome once those agreements were in place? You mentioned 

something about companies that did sign them being sorry. Do you 

have specific examples? 
61 

Mr. BEGO. The interesting thing is that the law firm that represented us during the corporate campaign by the SEIU also represented another company in town. That company did, in fact, sign 

a neutrality agreement. We did not. We were the only major company that did not. When they sat down for negotiations, we had national companies, regional companies, and companies from the Indianapolis area there, and from what my attorney says, almost to 

a man, they all wished they would have not signed the neutrality 

agreement. 

Mr. ROKITA. All right. 

Mr. Karnas, anything to add to that? 

Mr. KARNAS. Just to reflect on, I have tried to always keep an 

open mind. I would like to see some bipartisanship here in Congress and between unions. 

I am a former union member of two unions, household Workers 

Union 1199 and the International Brotherhood of Laborers. My 

wife is currently in a teachers union. 

So I am not anti-union. I have always tried to keep an open dialogue and conversation with the union members, of course, under 

the premise or the mandate that the conversations that we have 

are not to be construed as bargaining agreements, and we try to 

be very transparent, ethical and honorable. 

And what bothers me when I talk to somebody man on man, I 

have been told multiple times, it is just my job. But it is never just 

your job to spit upon somebody or to disparage a man or a woman 

or to threaten their reputation. So I feel that the playing field is 

unlevel. 

Mr. ROKITA. Thank you, Mr. Chairman. 

I yield back. 

Chairman ROE. I thank the gentleman. 

Mr. Holt. 

Mr. HOLT. Thank you. 

Clearly, these matters that come before the NLRB are complicated matters. 

Ms. Fisk, you have stated quite strongly and clearly that workers 

cannot and should not be penalized for exercising their existing 

rights, whether they be civil rights or rights, such as on the basis 

of race or sex, or rights that derive from the NLRA. 

And, Mr. Fritts, in your conversation with Mr. Andrews, I think 

it was established pretty well that it is inappropriate to interfere 

with the orderly process before an administrative law judge for establishing whether workers have been penalized and whether these 

are, indeed, established rights. 

So, as someone who always tries to simplify things so I can understand them, I would like to get really to the basis for this, and 

my question is for you, Ms. Fisk. Why are these established? I 

mean, I go back to the time when the Wagner Act, these protections, were established. These were tough economic times. Clearly, 

this was not to make it hard for employers. It was not to try to 

make disadvantageous economic decisions. Why is it important to 

protect these rights for economic reasons? In your testimony, you 

talked about preventing a race to the bottom. Could you elaborate 

on that, please? 

Ms. FISK. Yes, of course. 
62 

The reason why Congress enacted the National Labor Relations 

Act in 1935 at the depths of the Great Depression was because 

Congress found that collective bargaining would improve working 

conditions, that it would raise labor rates and increase the rates of 

employment. And that, in fact, proved true. 

From the time that the statute was enacted through the 1970s, 

America enjoyed enormously expanding productivity, a vibrant 

middle class, and that was made possible and still is sometimes 

made possible by union representation. Median weekly wages for 

union workers average $917 a week; that is about $47,000 a year. 

Median weekly wages in a nonunion workplace, about $800—$700 

a week which is about $37,000 a year. Union workplaces are more 

likely to respect safety protections. These are the kinds of the 

things that the National Labor Relations Act was enacted. 

My brother was trained in a union apprenticeship program as a 

machinist. He now lives in Arizona, works nonunion, because it is 

a right-to-work State, and makes less in real terms than he made 

when he was a young man. 

Moreover, last summer he was working in Phoenix, in a shop, 

with no air conditioning. It was about 125 degrees inside that machine shop on a daily basis. I said to him, why don’t you file a complaint with the Occupational Safety and Health Administration? 

That is unsafe. It is dangerous. They didn’t even provide water. 

And he said, because I need my job. If I ban together with my 

coworkers to complain about this or Lord knows if I go down to 

some government agency, I will get fired like that. 

And I said, yes, but then you could file a claim and get your job 

back. 

He said, I can’t afford to wait 6 or 8 months and be unemployed. 

I have to pay my mortgage. I will lose my house. 

Mr. HOLT. Well, would you say that in our efforts to ensure that 

due process is followed, that the administrative law judge is able 

to operate in a fair and efficient way, still is useful today as it was 

in yesteryear that you are describing? Is it still true that by providing for good wages and a strong safety record and communications about a company’s practices actually benefits the consumer 

and the economy at large? 

Ms. FISK. Of course, because it enables workers to demand their 

rights to be respected, and it enables consumers to urge companies 

to respect the legal rights of employees. 

Mr. HOLT. Thank you. 

Chairman ROE. I thank the gentleman. 

Dr. Bucshon. 

Mr. BUCSHON. Thank you, Mr. Chairman. 

A question for Mr. Karnas. The carpenters, they claim I guess 

that you didn’t provide benefits to your employees. Can you kind 

of provide a brief overview of what you provided? 

Mr. KARNAS. Yes, sir. 

We pay about 85 percent of our employees’ health and dental 

plan. We also will pay 100 percent of a life insurance plan. We 

have a 401(k), a public works pension plan. We have safety training that we pay for. 

And Ms. Fisk mentioned safety. We are a member of three 

OSHA—Federal OSHA partnership programs and our rating for 
63 

workmen’s comp is a .81, which is a testament to what our safety 

in our culture—in our company is. So we are very proud of those 

things. 

Mr. BUCSHON. As you should be. How would you think that benefits program compares to other companies in your area? 

Mr. KARNAS. Oh, I think it is probably—we set the bar for subcontractors. There might be some general contractors. We are a 

small company, truly are, 55 employees. I am not trying to be the 

richest guy in the graveyard. My employees are my family, and we 

set the bar for subcontractors. 

Mr. BUCSHON. Great. 

Ms. Fisk, I want to ask you, you were commenting on the 1970s, 

and I just wanted to give a background. My dad was a United Mine 

Worker for 37 years. I grew up in that atmosphere. Could you comment on maybe how Federal law has changed and responded to 

workplace conditions in that—probably I would imagine it is tremendously different now the protections that the government has 

for workers and everything compared to the 1960s and 1970s. 

Would you think that there has been a big change in that? 

Ms. FISK. Well, let’s see, since the 1970s, Congress prohibited 

discrimination on the basis of disability, but the Occupational Safety and Health Act was enacted in the 1960s. The National Labor 

Relations Act has not been amended in substance really since the 

1950s, except it was applied to the health care industry in 1974. 

So there has not been huge statutory expansion. 

Mr. BUCSHON. I guess my question would be is that, would you 

think today’s work climate—is today’s work climate in 2011 significantly different from the 1970s, when my dad was in the United 

Mine Workers, to enough of an extent where it is difficult to justify 

this aggressive activity that we have been describing today on behalf of the unions, claiming that there are continuing ongoing safety issues and other unfair practices going on, compared to historically why unions were valuable to our society in the past? 

I mean, is there a difference because in my mind, there is a significant difference in our climate, in our country today, compared 

to when I grew up, when my dad was—and what I experienced 

when I was a kid. 

Ms. FISK. Work still remains difficult and dangerous. Coal mines 

still have massive explosions, killing dozens of people. I think 

that—— 

Mr. BUCSHON. I want to clarify that. Dozens of explosions killing 

many people. There has been—we had one coal mine explosion, and 

I know that that is what you are talking about. My dad worked in 

the coal mine at Peabody Mine No. 10, Pawnee, Illinois, 37 years, 

didn’t lose 1 day for a work-related injury, and during that time 

frame, they had no explosions, and they had a few injuries based 

on rooftop problems. So I think you are over generalizing and sensationalizing that particular aspect. I know the coal industry very 

well. 

So what I am trying to get at is, is there ongoing justification for 

this type of aggressive activity in the workplace against businesses 

today compared to when unions were, you could argue, very, very 

necessary in the history of our country? Because, in my view, this 

type of activity that is overly aggressive, that what goes outside of 
64 

people’s constitutional rights or what the labor law has in place, 

isn’t necessary. 

Ms. FISK. I didn’t say dozens of explosions. I said explosions that 

kill dozens of people. Work still remains dangerous in many sectors. Construction still has high rates of injuries. 

Mr. BUCSHON. I have a limited time so I want to ask you this 

question then. How would what these people are doing impact 

that? How would that make it better? 

Chairman ROE. If you will hold that question. His time has expired. 

Mr. BUCSHON. My time has expired. 

Chairman ROE. Mr. Hinojosa. 

Mr. HINOJOSA. Thank you, Mr. Chairman. 

I thank the panelists for coming before our committee, and I 

would like to make a statement and then ask some questions. 

While Congress’ oversight of the NLRB is important, I strongly 

urge my colleagues on this committee to refrain from pointing to 

the NLRB and refrain from linking them to our Nation’s unacceptable unemployment rate. 

Instead, we must do what Congressman Rob Andrews said in his 

opening statement: We must focus on working together to create 

jobs and provide much-needed relief to American workers. 

Dr. Fisk, in your testimony, you indicate that corporate social responsibility campaigns are designed to strengthen the middle class, 

a goal which the House Committee on Education and Labor in the 

last 110th Congress endorsed in a pair of congressional hearings 

which I attended. They were on strengthening America’s middle 

class in 2007. In your opinion, how do corporate social responsibility campaigns accomplish the goal of strengthening the working 

middle class? 

Ms. FISK. Union corporate social responsibility campaigns are designed to provide information to workers, to enable them to assert 

their rights, in particular, rights to decent wages, to benefits, to 

safe workplaces, and to consumers so that consumers can choose to 

patronize those companies that have strong labor practices and 

safety records and environmental records, and not patronize those 

companies that have dangerous workplaces or pay low wages. It is 

information that allows all of us as consumers, as workers, and as 

citizens to hold companies accountable and to make sure that they 

treat their workers fairly. 

Mr. HINOJOSA. Dr. Fisk, in your testimony, you conclude that the 

board’s recent decisions in the area of labor protests are entirely 

consistent with the trend in the United States Supreme Court’s 

First Amendment jurisprudence. Can you elaborate on that point? 

Ms. FISK. Yes, of course. The United States Supreme Court has 

recently decided a number of cases protecting rights to picket and 

protest in various ways. Sometimes people find those protests deeply offensive. 

Depending on your point of view, Operation Rescue protests outside of women’s health clinics is deeply offensive, but it happens to 

be constitutionally protected, as the Supreme Court has twice held. 

Depending on your point of view, protests at military funerals accusing the death of the serviceperson on America’s attitudes with 

respect to sexual orientation are outrageously offensive, but just 
65 

this spring, by an 8-1 vote, the United States Supreme Court held 

that that kind of protest is constitutionally protected. 

In a free society, we have to protect speech that we don’t like. 

Mr. HINOJOSA. Thank you for that clarification. 

My next question is to Chet Karnas, Lone Sun Builders. 

In your testimony you state that you fought back against the 

Carpenters Union by engaging in your own public campaign 

through presentations to local groups and the press, creating a 

blog, producing a brochure, and even creating your own banners 

that said, in part, shame on Carpenters Union; honesty and integrity are the American way; stop the lies. 

Do you believe that the First Amendment protects your rights to 

free speech? 

Mr. KARNAS. Yes, I do. 

Mr. HINOJOSA. If yes, in your testimony, you state you were disappointed with the board’s recent bannering decision because it 

protected this coercive practice. Do you believe your actions were 

coercive? 

Mr. KARNAS. I do not because I believe the recent decision on 

Carpenters Union 1506 was on the Carpenters Union, and I consider the Carpenters Union’s tactics to be a rogue union with rogue 

tactics. The AFL-CIO construction unions—— 

Mr. HINOJOSA. If that is how you feel, did you file a complaint 

or charge against the NLRB? 

Mr. KARNAS. No, sir. Due to the litigation costs and due to counsel—just due to the environment, the business environment, it is 

not cost-effective. It didn’t pass the cost-benefit analysis, and I really thought I had a dialogue with the carpenters’ representative. I 

am very transparent, tried to communicate multiple times. I tried 

that. I tried to be bipartisan and honest and communicate first. 

Mr. HINOJOSA. My time has expired. 

Chairman ROE. I thank the gentleman. 

Mr. Gowdy. 

Mr. GOWDY. Thank you, Mr. Chairman. 

Mr. Fritts, can Boeing factor in South Carolina’s financial incentives in their decision to relocate. 

Mr. FRITTS. There is certainly nothing unlawful with Boeing considering what financial benefit the State of South Carolina may be 

willing to provide them, and that will be one of the issues I am 

sure that they will argue in the hearing. 

Mr. GOWDY. You will be doing a pretty sorry job for your shareholders if you didn’t factor in the fact that a State was willing to 

incentivize your relocation there, wouldn’t you? 

Mr. FRITTS. I would think that is an important business consideration. 

Mr. GOWDY. Are you familiar with the case of First National 

Maintenance Corp. v. NLRB? 

Mr. FRITTS. Yes. 

Mr. GOWDY. Am I stating this correctly: Congress had no expectation that the elected union representative would become an equal 

partner in the running of the business enterprise? 

Mr. FRITTS. Yes, that is accurate. 

Mr. GOWDY. Is that a fair quote from either the holding or dicta 

in that case? 
66 

Mr. FRITTS. Yes, that is an accurate quote. 

Mr. GOWDY. All right. So Boeing has to make what is the best 

decision for them, correct? They can factor in the fact that South 

Carolina provides financial incentives to locate to that State? 

Mr. FRITTS. Yes. 

Mr. GOWDY. All right. Is there any evidence that Boeing negotiated in bad faith? 

Mr. FRITTS. I don’t know what evidence the acting general counsel has or collected—— 

Mr. GOWDY. That is not part of the complaint. 

Mr. FRITTS. But what I do know is the acting general counsel has 

determined that there was no violation of Boeing’s duty to bargain 

in good faith. They did, in fact, satisfy their duty to bargain with 

the union by negotiating language in their collective bargaining 

agreement that gave them the right to place new work wherever 

they wanted to. 

Mr. GOWDY. All right. And this case is going to turn on whether 

or not it was a new line of work or a transfer of existing work, correct? 

Mr. FRITTS. I believe so, but again, I am not privy to all of the 

evidence that is—— 

Mr. GOWDY. Are you privy to the fact that Boeing added 2,000 

jobs in Washington State even after the transfer of work to North 

Charleston? 

Mr. FRITTS. My understanding is that the work in the Puget 

Sound area has grown, and that no IAM representative or employee is going to be laid off as a result of this decision. 

Mr. GOWDY. Are you familiar with the quote from the spokesperson for the NLRB? 

Mr. FRITTS. I am sorry, which quote? 

Mr. GOWDY. We are not telling Boeing they can’t build planes in 

South Carolina; we are talking about one specific piece of work, 

three planes a month. If they keep those three planes a month in 

Washington, then there is no problem. Beyond the 10 planes, Boeing can build whatever it wants in South Carolina. 

Have we gotten to the point where the NLRB is going to tell a 

company how many widgets or planes or anything else they can 

build in any particular State? Is that how you read this? The 

NLRB is going to tell a company precisely the number of a product 

it can build in a State? 

Mr. FRITTS. That is the essence of the complaint, yes. 

Mr. GOWDY. Let me ask you about another quote. 

Mr. McNerney, who is the CEO of Boeing, said that one of the 

considerations in where to place the new work was strikes. Is it inappropriate, legally, for him to say that one of the considerations 

for where they are going to place a new line of work is whether or 

not they will have a consistent source of labor? 

Mr. FRITTS. There is a certain level of candid dialogue that occurs when you have an established bargaining relationship. I know 

based on what has been reported that there were concerns about 

customers who were unwilling to tolerate interruption in production. 

Mr. GOWDY. Let’s be very clear on that because there was a customer who said we are going to have to reevaluate our business re-
67 

lationship with you because of the unpredictability of your work, 

correct? A customer is threatening to take its work somewhere else 

because there have been four strikes, correct? 

Mr. FRITTS. That is what I understand, yes. 

Mr. GOWDY. Am I to be led to believe by the NLRB that that cannot be considered? 

Mr. FRITTS. Ultimately, the issue in the case is would Boeing 

have made this decision for business reasons other than the strike 

activity of the employees in the plant, and ultimately, that is the 

issue for the board. 

Mr. GOWDY. Well, let me ask you this. Is it okay for him to think 

it but just not say it? Would he have been fine to just think to himself, we better look for a consistent workforce, instead of saying it? 

Was that the sin he committed, that he actually said it? 

Mr. FRITTS. I think as a result of this case, employers are going 

to be cautious about what they say publicly about their business 

decisions. 

Mr. GOWDY. Well, my time is almost up. I find it an abomination 

that you can wear a prison uniform and represent yourself as a 

prisoner while you are at work, but a CEO of Boeing cannot say 

we can’t survive with these continued work stoppages. 

That is an abomination, and I will yield back my time, Mr. 

Chair. 

Chairman ROE. I thank the gentleman. 

Mr. Scott. 

Mr. SCOTT. Thank you, Mr. Chairman. 

Ms. Fisk, are you aware that our committee has requested documents from the NLRB? 

Ms. FISK. Yes, I am. 

Mr. SCOTT. Are those documents accessible under the normal discovery process or Freedom of Information? 

Ms. FISK. I imagine that documents about pending cases that reflect attorney-client privilege, as Mr. Fritts said, work product, or 

strategic decisions of the general counsel are not available either 

through the ordinary board processes or through a FOIA request. 

Mr. SCOTT. Can a litigant benefit if the secret internal communications of NLRB are made public? 

Ms. FISK. Yes, of course. That is what the Supreme Court held 

in Hickman v. Taylor in the 1930s. 

Mr. SCOTT. Thank you. We have heard a lot of complaints, but 

do any of the witnesses have legislative recommendations? 

Mr. BEGO. As far as unfair labor practices in the corporate campaigns? 

Mr. SCOTT. Right. 

Mr. BEGO. Well, in our experience with all corporate campaigns 

run against us. It is called death by a thousand cuts. So not only 

were they filing unfair labor practices but OSHA complaints, 

EEOC complaints. We had people in my neighborhood on Halloween trick-or-treating, handing out fliers to people in my company. We had clergy people involved. It goes on and on and on. 

Daily, you wake up and say, what is next. 

One thing I do believe that is necessary is, on the unfair labor 

practice side, is there has to be some type of loser pay law, that 
68 

if people, unions or employers, either one, file complaints that are 

frivolous and they lose, they need to be held accountable for them. 

Mr. SCOTT. Ms. Fisk, is there a prohibition against frivolous 

claims? 

Ms. FISK. Yes, of course. 

Well, explicitly in the statute, no, but any adjudicative entity, 

whether it is a court or the National Labor Relations Act, has a 

way of dealing with nonmeritorious complaints. 

The challenge is protecting the right of people to file claims that 

later turn out not to be successful with prohibiting complaints that 

are filed for harassing or other purposes. That is a complicated line 

to draw for Federal courts. It is a complicated line to draw for an 

agency. 

But as long as we are committed to the constitutional right of 

people to petition government for redress of grievances, we have to 

have a regime that allows people to file complaints that turn out, 

upon investigation, not to be well based either in the fact or the 

law. 

Mr. SCOTT. And are there limitations on freedom of speech as to 

what legislative response we can have? Ms. Fisk? 

Ms. FISK. I am sorry? 

Mr. SCOTT. Are there limitations on freedom of speech under the 

Constitution or right to freedom of speech as to what we can do to 

some of these complaints? 

Ms. FISK. Yes, of course. I mean, you can’t defame somebody by 

standing around in public and shouting falsehoods that harm their 

reputation unless they are a public figure and you lack malice, but 

in terms of just filing litigation documents, there is a First Amendment right to make allegations in litigation documents, including 

allegations of fact that later turn out not to be true. 

Chairman ROE. I thank the gentleman. 

Mr. Walberg. 

Mr. WALBERG. Thank you, Mr. Chairman. 

And before I ask the question, I just feel compelled to let off some 

steam as well. 

It is absolutely frustrating to even have to have a hearing like 

this. I come from Michigan, that led this country into recession, 

and I am hopeful that we don’t ultimately be the last one out. 

But the impact of what the NLRB is doing indicates to me and 

I think it ought to indicate to people of goodwill and belief in what 

capitalism and what this country is all about, it ought to lead them 

to fear as well, that what either the bureaucrats and this NLRB 

board are doing is either out of ignorance of what it takes to move 

a country forward or it is just malice aforethought, to change this 

country from what it is, what it has been, what it can be. 

Having said that, I thank the panel for being here, and Mr. Bego, 

I thank you for being here. I see you are from Michigan, that you 

have operations in Michigan, that you are providing jobs in my 

State, and I thank you for that, in tough times. 

Mr. BEGO. I thank you. 

Mr. WALBERG. I come from a county that has a 14 percent unemployment rate still to this day. So jobs are important to us, and I 

thank you for taking the risk and taking the abuse that I read and 

I hear is going on here. 
69 

You said that it costs about $1 million to defend yourself from 

the corporate campaign. How many jobs could have been created, 

to your guesstimate, with that kind of investment? 

Mr. BEGO. Forty, 50 jobs or more, and you know, that is the 

problem when you go into these, and that is why a lot of employers 

don’t fight them because they don’t have the resources to do it. We 

are fortunate we do, that we are big enough, and we stretch across 

the country, and we can withstand it. 

Mr. WALBERG. From a financial and personal standpoint, I say 

relational standpoint even, in the case of your employees, what 

kind of a toll did it take on your employees? 

Mr. BEGO. Well—— 

Mr. WALBERG. Marriages, whatever. 

Mr. BEGO. It was difficult for everybody, and the ones that I felt 

the worst for were our cleaners who are out in the buildings because the organizers would be out there at night, waiting for them 

to come out of the buildings to try and force them to sign union 

cards while they were doing all the other things to me and my customers. And I saw some of the affidavits that they wrote when we 

were in the hearing, and it just—I am sorry, I get emotional—it 

just was appalling what they did to some of our employees. 

And then, you know, that is what hurt the most, but the bright 

spot was is that when I met with the employees, they understood 

what was going on, and they didn’t want any part of what the 

union had to sell, and that kept me going. 

Mr. WALBERG. Well, I appreciate that. 

Mr. Karnas, how has the NLRB’s September 2010 bannering decision affected your business? And a follow-up question for your 

consideration, what cost did it have on your businesses and your 

employees? 

Mr. KARNAS. Well, first of all, the bannering decision, September 

2010, again, was not endorsed by all the construction trade unions. 

In New Mexico, we have the New Mexico Construction Building 

and Trades Council, and they have had an editorial in our local 

paper saying that they don’t endorse those kind of tactics because 

those kind of tactics are divisive. It is a visual blight. It is bad for 

tourism. It is bad for business. It is bad for the construction profession, for its reputation, and it is a job killer, and it is not a job creator by any means. 

And I believe that bannering decision was made for the minority 

of the construction trade groups. Most construction trade groups do 

not agree with those tactics, and they have openly stated that. 

So, again, I believe the Carpenters Union is a rogue union, and 

I believe their tactics are unethical and reprehensible, and I would 

like the National Labor Relations Board to take that into consideration and make sure that the bannering decision is enforced. We 

all have free speech rights, but they have violated those rights 

every time. 

Mr. WALBERG. It is a chilling effect on those rights? 

Mr. KARNAS. I am sorry. 

Mr. WALBERG. This is a chilling effect on all of those rights, even 

for a majority of the trades people? 

Mr. KARNAS. Yes, and our employees, they have no—after their 

abhorrent behavior, they are with us 100 percent, and again, we 
70 

are not anti-union. You talk about collective bargaining. Our employees are involved in our processes. I mentioned our benefits programs before. On top of our health benefits, we also include an has 

for employee savings accounts when they have the larger 

deductibles, and this is all from employee input. And we have a lot 

of buy in, but it has had a chilling effect on our employees. There 

has been some fear of some safety, some threats. Of course, even 

the threats have been loud, and so we have had a negative impact, 

but we continue on. I think we are closer for it, and we still keep 

an open mind, and we wish to have dialogue. 

Mr. WALBERG. I thank you, and Mr. Chairman, I thank you for 

the time and I also thank you for letting the time go so we could 

hear that employees get it, in many cases, even though their leadership doesn’t. 

Chairman ROE. Mr. Miller. 

Mr. MILLER. Thank you, Mr. Chairman. 

Mr. Fritts, in your submitted testimony, you suggested that in 

the discussions about the movement of the plant, that the employees had waived their right to Boeing making this decision? 

Mr. FRITTS. That is what the acting general counsel found. 

Mr. MILLER. And Ms. Fisk, in your statement, I think in responding to Mr. Andrews you suggested that that may be so, but 

they did not waive their rights against being discriminated against 

under the law? 

Ms. FISK. That is correct. 

Mr. MILLER. And that would be what right? 

Ms. FISK. The right under Section 8(a)(3) of the NLRA to be free 

from discrimination in regard to having exercised statutory rights. 

Mr. MILLER. So when various officers and the CEO of Boeing 

make a series of public statements that they made this decision 

and will continue to make these decisions because of the strikes at 

the Washington facility, one of the units of the Washington facility, 

what choice does the general counsel have here given that retaliatory actions against legal union activities are prohibited under the 

law? 

Ms. FISK. The general counsel is appointed to enforce the National Labor Relations Act. It is important to distinguish that there 

may not have been a violation under 8(a)(5), which imposes a duty 

to bargain, but that has nothing to do with whether there was a 

violation under Section 8(a)(3) of the statute, which prohibits discrimination in regard to union activity. 

Mr. MILLER. So if Boeing, if these same corporate officers had 

said, well, we are going to move our planet because there are too 

many African-Americans in Seattle, would those African-American 

workers have lost their right because Boeing and the machinists 

decided that they could move this facility prior to the knowledge 

of that reason? 

Ms. FISK. Of course not. The African-Americans have rights 

under Title VII of the Civil Rights Act of 1964, as does everybody, 

to be free from discrimination in regards to race as companies 

make decisions about how to run their operations. 

Mr. MILLER. And to date, we have this complaint—we haven’t 

heard from the administrative law judge yet, correct? 
71 

Ms. FISK. That is correct. We have no idea what the evidence is 

ultimately going to show about why Boeing decided to move its operations. 

Mr. MILLER. You don’t know whether or not the board will agree 

with that finding or whether it will be appealed to the board or 

whether the board will disagree with that finding; is that not correct? 

Ms. FISK. That is correct. 

Mr. MILLER. And we don’t know in fact whether that will be appealed? 

Ms. FISK. That is correct. 

Mr. MILLER. But the allegation here is that this decision was 

based in part on an illegal activity? 

Ms. FISK. That is correct. It is an allegation based on the board’s 

investigation of the facts, but those facts have not been proven. 

Mr. MILLER. So the idea that somehow this decision—I find it 

rather ironic that we would say that this decision somehow is going 

to change America for what it could be, when, in fact, what you 

have is the protection of rights of workers, under the law, clearly 

stated. You have on videotape comments by these individuals saying that that is the reason why they are continuing to move the 

facility or move the facility, and the question is whether or not the 

law will be allowed to work or whether this committee and the 

oversight committee will be able to reach in and tamper and interfere with that process, which is essentially a judicial process. 

Ms. FISK. That is correct. 

Mr. MILLER. Have you ever asked—Mr. Fritts, have you ever 

asked the Congress to defund a case against one of your clients? 

Mr. FRITTS. I am not a lobbyist. I am a lawyer. 

Mr. MILLER. No, I am just asking as a lawyer. This is one of the 

tools that is in apparently now available if you come to the Congress and ask them to defund the agency bringing the case, prior 

to any little bit of, you know, presentation of evidence. 

Mr. FRITTS. Congressman, all I can tell you is my client’s pay me 

to litigate cases. They don’t pay me to lobby. 

Mr. MILLER. It is not a question of lobbying. It is a question of 

whether or not you think that is a proper tool. 

Mr. FRITTS. I am not here to comment on what is appropriate for 

Congress or for the purposes of congressional oversight. I am here 

to testify about the National Labor Relations Act and practice before the board. 

Mr. MILLER. Ms. Fisk, you also state in your testimony that, in 

fact, the Supreme Court has found the board to be too restrictive 

on the issues of free speech in union campaigns; is that accurate? 

Ms. FISK. That is correct. 

Mr. MILLER. It wasn’t on initiation by the board. In fact, the 

board was going the other direction until the Supreme Court spoke. 

Ms. FISK. It wasn’t the Supreme Court. It was the Federal 

Courts of Appeals. What happens is the board interprets the statute one way and then tries to get enforcement, either by going into 

a district court to get an injunction or it issues a decision, and then 

one of the parties appeals it or seeks review in the Federal Courts 

of Appeals. And the board was losing its cases in which it was holding that bannering is coercive, and ultimately, therefore, the board 
72 

decided that it had to change its position because the Federal 

Courts of Appeals, including the D.C. Circuit in the Sheet Metal 

Workers case, in an opinion by Chief Judge Douglas Ginsburg, who 

is nobody’s liberal, found that bannering is protected by the First 

Amendment. 

Chairman ROE. The gentleman’s time has expired. 

Mr. Kline. 

Mr. KLINE. Thank you, Mr. Chairman. 

Thank you to the panel for being here. 

Mr. Fritts, earlier in the discussion today, there were questions 

raised regarding attorney-client privilege. In inquiries that this 

committee has made of the National Labor Relations Board, I have 

got to admit up front I am not an attorney, but it is my understanding that attorney-client privilege is not an absolute, that in 

some circumstances, the parties can be compelled to provide information. Is that correct? 

Mr. FRITTS. That is correct. Certainly—— 

Mr. KLINE. Thank you. More to the point raised earlier, this committee is authorized, indeed obligated, to conduct oversight of the 

agencies and entities within its purview and the actions those 

agencies and entities take. And that is an obligation that we take 

seriously. 

And I would point out that both parties have taken this obligation seriously. It is fundamental, fundamental to the role of Congress. 

I want to be clear that inquiries this committee has made of the 

NLRB have been made in connection with our authority and obligation to conduct congressional oversight, and that authority has 

been exercised consistent with House Rules. 

Now, would you say, Mr. Fritts, that if there are concerns regarding the information requested, wouldn’t you agree that it 

would fall to Congress and the board to discuss and resolve any 

disagreement over what can be produced consistent with congressional responsibilities and rules? 

Mr. FRITTS. I agree. 

Chairman KLINE. Thank you. 

We have had this discussion back and forth many times, the 

members of this committee. Oversight is a tough business. With 

the National Labor Relations Board, it is absolutely indisputable— 

and I am ready to argue with anybody here—that the nature, and 

I would argue, the bias, of that board shifts. Typically when it is 

a Republican administration, the Democrats claim that workers’ 

rights are being denied and it is too pro-business. And when it is 

a Democrat’s administration, Republicans complain. When it is a 

Republican administration, this committee has called for hearings 

and brought board members here to testify, and I have complained 

about it, and now in this administration, I think we have an outrageous overreach of the board, and I am doing what I can do to 

provide the oversight to that board. 

It is very powerful. It is powerful beyond what we imagined that 

it could be, and we need to exercise checks and balances that the 

legislative branch, Congress, and the executive branch and this 

board to watch for overreach both ways. 
73 

So I would just say to my colleagues, to the panel, and to those 

here in the room that we are going to continue to exercise our authority as both parties have done and provide oversight to this 

board and to all agencies and departments in the executive branch. 

I yield back. 

Chairman ROE. I thank the gentleman for yielding. I will now exercise my time for questions, and I would start out by saying 

that—well, first of all, Mr. Bego and Mr. Karnas, thank goodness 

there are people like you out there who have the deep pockets, and 

you, Mr. Karnas, are a very small business, and I am very familiar 

with the backbone to not be intimidated. And I think you are absolutely right. I grew up in union households. 

As a matter of fact, I have also belonged to a union, and I think 

it is inherent on all of us to allow and make sure that workers are 

treated properly and make sure that employers are treated properly. 

Jobs are the single most important because, as Mr. Andrews 

brought up in the very beginning, and I have got a news flash for 

you. We don’t have an income tax from Tennessee. We are a rightto-work State, and we would love to have your business. That is 

the way our Governor feels, and that is the way I feel about this. 

When you see a company like Boeing, a great company—I have 

been through part of their company in Washington State, great employees. That business competes around the world, and they have 

a lot of factors. Part of it is labor, a huge part, and any business— 

I heard both of you all say that. And absolutely, I am aware of it 

myself. The most important person in my shop are my employees, 

who work with me every day. They didn’t work for me. They 

worked with me in a small business. 

And Mr. Karnas, I heard you say that, too. You are very proud 

of your people. 

And the same thing, Mr. Bego. 

And I would like to know why in the world in American business, 

we have got jobs going overseas, and you see losing jobs and jobs 

and especially our manufacturing jobs, why in the world we would 

have a situation where you could go to a non—a shop or an employer who is not even involved in a conflict, a discussion, and have 

someone show up with a rat out there as an inflatable rat or a banner, how that creates a job or helps a worker. I am sort of slow, 

but I don’t understand that. 

And the other thing I can’t understand is, when you have a business—Mr. Bego, I want you to speak to this—is when you have a 

business out there, and you have hundreds or you, in case, thousands of employees, who haven’t asked for a union, no one in your 

shop asks, and if you want to have a vote, that is the way America 

votes. You have an election. We now have a process for that, but 

these corporate campaigns are a way to avoid any pain on the side 

of the person asking for it completely, and you used the same tactics as you can with a strike, except you don’t feel, as Mr. Fritts 

pointed out, the pain of losing your paycheck. 

So, in your case, you didn’t have anyone asking for a union. They stepped in to ask, and then you went through essentially $1 million 

worth of litigation to protect yourself from something you didn’t 

ask for or your employees asked for. Can you speak to that? 
74 

Mr. BEGO. Well, that is correct, and I think people have to understand what a corporate campaign is versus what is going on with 

Boeing right now. 

In a corporate campaign, the union, as I said before, has come 

in and looked at as a business model. And in our case, they came 

went out to about 10 janitorial firms in the Midwest, okay. And the 

thing about this is, if they could follow the law, the National Labor 

Relations Act, and get 30 percent of the people to sign cards, they 

could petition for an election. They didn’t do that. My guess is because they couldn’t get enough people to sign the cards. 

So what they did then is start this campaign that would force 

unionize my people, and I said, no, because it wasn’t right for my 

people. 

And it continues, and the board today is trying to promulgate 

rules that will help them process these corporate campaigns easier, 

and one simple example real quick is, they are trying to get one 

where you have to post the National Labor Relations Act, specifically the part of it that says you can unionize. Sounds good, but 

they also want to attach fines to it, like $10,000 every time you are 

found guilty of not posting. 

That is not the real goal. The real goal is, is not to inform the 

people. The real goal is they go in. They don’t have it up. The organizer goes back to the union hall, and he says, we will file an unfair labor practice. All of the sudden, the business has two or three 

of those sitting there, and the union comes in and says, I can make 

your pain go away; here is what I will do. You sign this neutrality 

agreement, we will withdraw the charges. And they have got what 

they want because now they have got card check; they have got the 

people’s home addresses and their names. That is what the game 

is. 

Chairman ROE. I am going to ask Mr. Fritts very quickly, is a 

private employer subject to oversight by a Member of Congress? 

Mr. FRITTS. Is it proper—— 

Chairman ROE. Private citizen, they are not. We are not. 

Mr. FRITTS. No. 

Chairman ROE. And is a private employer subject to the oversight of this committee? 

Mr. FRITTS. I am not an expert on oversight. 

Chairman ROE. The answer is no, and is a private employer subject to oversight of this Congress? 

Mr. FRITTS. I assume not, no. 

Chairman ROE. Well, is the National Labor Relations Board subject to oversight by this Congress? 

Mr. FRITTS. Yes. 

Chairman ROE. And by this committee? 

Mr. FRITTS. Yes. 

Chairman ROE. I think that is the point Mr. Kline was trying to 

make. My time has expired. 

Any closing statements from the ranking member. 

Mr. ANDREWS. Yes. I would like to again thank the witnesses 

and our colleagues for what I think was a very interesting and instructive exchange. 

I think the record of the hearing establishes four propositions: 

The first is that in a boisterous and exuberant democracy, when 
75 

people express their opinions, sometimes people are troubled and 

find them offensive. I hope we always find opinions offensive because that means people are free to speak their minds. 

The second proposition established is that the Boeing decision is 

very controversial and hasn’t been decided yet. So I guess we are 

a little ahead of our time in that regard that we are discussing a 

decision that hasn’t been made yet, and someday it will be made, 

and we will assess the impact of it. 

The third proposition I think is clearly established is that asking 

the general counsel of the National Labor Relations Board for his 

work product and his privileged communications with his client in 

a pending matter or any matter is wrong and should not have been 

done. 

And the fourth proposition is that this is yet another example of 

how we could have focused on the issue of creating an environment 

where businesses and entrepreneurs could actually address the 

number one problem in this country, which is creating jobs, instead 

of talking about cases that haven’t been decided, asking people for 

information to which we are not entitled, and sort of remarking on 

the fact that in a free speech democracy, people sometimes say 

things that offend other people. 

I appreciate—I think the witnesses did contribute in a meaningful and important way, and I appreciate their time and their preparation, but I would, frankly, again urge that the committee refocus 

our attention on the number one issue that we hear about in our 

district, which is working together to create jobs for the American 

people. 

I yield back. 

Chairman ROE. I thank the gentleman. 

I agree with the gentleman that jobs are the single biggest issue 

facing this country right now. I went back and reviewed all of the 

recessions that have occurred, major recessions that have occurred 

since 1945, and all—the four steepest ones when we have come out 

of recession—and this is essentially 13 months past that time—we 

have come out, the GDP, about 7 percent higher than we went in 

and jobs about 4 percent, 4.7 percent higher than when we went 

in. So we came out pretty steep after the deepest recessions. 

And the two I remember, the first was 1973. I was in the Army 

and Korea, and I got heat 3 hours a day. People here stood in gas 

lines in this country. In 1981, we had a very steep recession, and 

the same thing occurred then. This particular recession, our GDP 

is up about a 10th of a percent. That is why when you ask people, 

is this recession over—go ask when you get home to your constituents, is this recession over, and no one will raise their hand. And 

the reason is because they can’t find a job, and the reason they 

can’t find a job is that our job creation is 5 percent lower than 

where it was. We are 7 million jobs below when we started this recession. 

And for the life of me, I am trying to figure out how harassing 

Mr. Bego for 3 years when he said it cost him $1 million and he 

could have created potentially 20, 30, 40, 50 jobs, how that helps 

with job creation, and that is my situation here and my concern 

here, I mean. I think certainly workers need to be protected, no 
76 

doubt. I put on a uniform and left this country so that you would 

have a right to a secret ballot. 

My wife claims she voted for me in the election, but I don’t know 

that for sure because it is a secret ballot, and that is the way it 

should be. The President is elected that way. The Congress is elected that way. The union members are elected that way. And that 

is exactly the right we want to protect. 

And I think you all so much for coming today. It was a great 

hearing. You all did a wonderful job. Without any further comments, this meeting is adjourned. 

[Additional submissions of Chairman Roe follow:] 

Prepared Statement of Bill Ritsema, President, Ritsema Associates 

CHAIRMAN ROE, RANKING MEMBER ANDREWS AND MEMBERS OF THE SUBCOMMITTEE ON HEALTH, EMPLOYMENT, LABOR AND PENSIONS: Thank you for the opportunity to submit my testimony today to your subcommittee. My company has 

been adversely impacted by the Michigan Regional Council of Carpenters (MRCC) 

union as they have singled-out our small business for no concrete reason and use 

methods such as letters, picket lines and ‘‘bannering’’ at several of our high profile 

job sites. Congress needs to put an end to the currently allowed harassment practices on small businesses that are based on no merit. 

My name is Bill Ritsema, and I am the President of Ritsema Associates which 

is a second generation merit shop specialty contractor that has been in business 

since 1955. We are a family owned business that has a strong reputation in Michigan for providing a quality product and providing quality benefits and pay to our 

employees. 

On July 13, 2010, we received a letter that stated the carpenters’ union had investigated our wages and benefits and deemed that they were lower than the area 

standard. Coincidentally, our business did not provide them with any wage and benefit information nor have our employees submitted a survey to them directly. They 

are attempting to blackmail us into providing them with proprietary information intended to be used for their own benefit with the threat of harassment to our customers and business. They requested that we fill out our wage structure and send 

it back to them within seven days. See exhibit 1. Instead of filling out their forms, 

we sent them a response letter on July 23, 2010 asking to see the results from their 

investigation of our wages and benefits. See exhibit 2. Interestingly, they did not 

send us the results of their investigation of our own wages and benefits. 

To date, the union has no recorded complaint filed with the National Labor Relations Board (NLRB). However, the union began a harassment campaign by sending 

letters to more than one dozen of Ritsema Associates’ customers claiming a ‘‘Notice 

of Labor Dispute.’’ The letter requests of customers, ‘‘[W]e are asking that you use 

your managerial direction to not allow these non area standard contractors to perform any work on any of your projects unless and until they generally meet area 

labor standards for all their carpentry craft work.’’ The MRCC is attempting to remove our carpenters off the job site even though they do not represent our carpenters or have legitimate cause. While this was couched as a request from the 

MRCC, the union also informed the customers that there would be adverse impacts 

if they continued using the employees of Ritsema Associates. ‘‘We want you to be 

aware that our new and aggressive public information campaign against this company will unfortunately impact all parties associated with projects where they are 

employed,’’ the notice warns. The impact is defined as ‘‘highly visible’’ banner displays and ‘‘distribution of handbills’’ at the job sites of Ritsema Associates’ customers. Shortly thereafter, large banner displays manned by teams of demonstrators 

did begin to appear outside of several job sites where employees of Ritsema Associates were working. 

When asked, the banner holders denied being employed by Ritsema Associates, 

the customer or any of the other contractors on the job site. They stated that they 

were not carpenters and not members of the MRCC union. They would only state 

that they had been hired by the MRCC to ‘‘hold the banner.’’ Additionally, video 

interviews done by the Mackinac Center for Public Policy confirm that the union 

hired homeless individuals from a shelter in downtown Grand Rapids. Committee 

members can view the videos at the following web addresses: 
77 

http://www.youtube.com/watch?v=JUwy_Ot1d4I and 

http://www.youtube.com/watch?v=Ndb_xGkZY5w 

The union has been ‘‘bannering’’ and picketing many of our construction sites 

claiming that we do not pay the area standard wages, health benefits and pension 

to all of our employees. What they say on our job sites essentially mirrors what 

their letters say and are patently false. The union was actually picketing right outside a cancer center where cancer patients were resting and, according to the hospital’s lawyer, were doing so illegally. 

The MRCC has also sent letter to our customers’ clients that are filled with lies, 

approximately 60 letters have been sent. See exhibit 3 (Standard letter). Nearly 

every statement they claim as a fact is in reality fiction. Additionally, Kathy Hoekstra from the Mackinac Center for Public Policy has a union representative on video 

accusing us of hiring illegal aliens, which is also false. 

Customers have stopped using Ritsema Associates in order to make the MRCC 

demonstrations stop. Demonstrations that are unfounded and based on no proof. To 

be clear, I have never spoken with anyone from the MRCC union. The dispute that 

they have with our small business is based on ulterior motivations rather than 

facts. 

Congress needs a legislative solution to stop the currently legal practice of harassment and lies. These current practices allowable by the National Labor Relations 

Board (NLRB) are destroying business and have given the unions the right to harass good long-standing companies such as our own. 

Ritsema Associates pays a superior package of wages and benefits to our employees. We are also very competitive and, accordingly, are able to provide the kind of 

job security that allows our employees to earn fair wages and benefits on a consistent basis. We provide our employees with a quality benefit package that includes 

a financially sound health plan and a 401(k) plan where every dollar that goes in 

belongs to our employees. Our company and customers have been needlessly harmed 

by the acts of harassment by the Michigan Regional Council of Carpenters. These 

acts have no merit or basis other than to damage our reputation and therefore harm 

our workers. 
78 
79 
80 
81 
82 
83 
84 
85 

[Additional submissions of Mr. Andrews follow:] 
86 
87 

INDIANAPOLIS CLERGY COMMITTEE 

A Project of Interfaith Worker Justice 

In accordance with our various faith traditions, we believe that dignity and just 

compensation are essential human rights for all workers. As religious leaders, God 

has called us to share a vision of reconciliation and economic equality. We invite 

business, labor, and political leaders to work together to make this vision a reality 

for the workers in our city. 
88 

STATEMENT OF PRINCIPLES

Therefore, we call upon business leaders to enact polices and practices for janitors 

and all low-wage workers, whether they are direct employees or contracted out, 

which will: 

• Pay a living wage that allows workers to meet the basic needs of their families. 

• Provide full health care benefits for workers and their families at an affordable 

rate. 

• Prevent tactics which intimidate workers who want to join a union. 

• Negotiate in good faith. We call upon labor leaders to: 

• Make the needs of low-wage workers their primary concern. 

• Be honest about services provided. 

• Negotiate in good faith. 

It is our prayer that the economic inequality in our city can be overcome through 

cooperation. It is our commitment to stand up for the rights of all low-wage workers. 

It is our calling to keep before this city a vision of God’s justice and mercy. 

BISHOP MICHAEL J. COYNER, 

Indiana Area of The United Methodist Church; 

REV. STEPHEN GRAY, Regional Minister, 

Indiana-Kentucky Conf., United Church of Christ; 

REV. DICK HAMM, former Genl Min & Pres., 

Christian Ch, Disciples of Christ, US, Canada; 

REV. RICHARD L. SPLETH, Regional Minister, 

Christian Church (Disciples of Christ) Indiana; 

BISHOP CATHERINE WAYNICK, 

Episcopal Diocese of Indianapolis; 

REV. MMOJA AJABU, 

Light of the World Christian Church; 

REV. CHAD ABBOTT, 

Lockerbie Central United Methodist Ch.; 

REV. MICHAEL ALEXANDER, 

Aldersgate United Methodist Church; 

REV. LAURIE ADAMS, 

Christian Church (Disciples of Christ); 

REV. DR. RONALD J. ALLEN, 

Christian Theological Seminary; 

DR. PRESTON ADAMS, III, 

Light of the World Christian Church 

REV. KEVIN R. ARMSTRONG, 

North United Methodist Church; 

RABBI JON ADLAND, 

Indianapolis Hebrew Congregation. 

INDIANAPOLIS CLERGY COMMITTEE

A Project of Interfaith Worker Justice 

Rev. Sharon Baker, Lockerbie Central United Methodist 

Rev. Louise Baldwin Rieman, Northview Church of the Brethren 

Rev. Phil Baldwin Rieman, Northview Church of the Brethren 

Pastor Stan Banker, Indianapolis First Friends (Quaker) 

Minister Oscar E. Banks, IV, Light of the World Christian Church 

Rev. Robert S. Bates, Christian Church (Disciples of Christ) 

Rev. Dr. John Bean, Downey Ave. Christian Church 

Rev. Johnson A. Beaven III, Citadel of Faith Church of God in Christ 

Fr. Carlton Beever, St. Philip Neri Catholic Church 

Fr. Justin Belitz, O.F.M., Archdiocese of Indianapolis 

Bishop T. Garrott Benjamin, Light of the World Christian Church 

Rev. Jeffrey Bessler, Christ Church Cathedral (Episcopal) 

Mr. J. Brent Bill, Religious Society of Friends (Quakers) 

Rev. Howard Boles, Roberts Park United Methodist Church 

Rev. Rayford Brown, Rock of Faith Missionary Baptist Church 

Rev. Kent Burcham, Edgewood United Methodist Church 

Rev. Larry Bush, Amity United Methodist Church 

Rev. Audrey Borschel, Christian Church (Disciples of Christ) 

Rev. Bob Cannon, Danville United Methodist Church 
89 

Rev. Dr. James M. Capers, Lamb of God Church (ELCA) 

Rev. Patricia Case, Christian Church (Disciples of Christ) 

Fr. Tom Clegg, Sacred Heart Catholic Church 

Rev. Richard Clough, First Congregational Church 

Rev. Clarinda Crawford, Bradley United Methodist Church 

Fr. Larry P. Crawford, St. Gabriel the Archangel Catholic Ch. 

Rev. Darrel Crouter, Central Christian Church 

Rev. Canon Kate Cullinane, Christ Church Cathedral (Episcopal) 

Rev. Darren Cushman-Wood, Speedway United Methodist Church 

Rev. Clement T. Davis, St. Bartholomew Catholic Church 

Rev. Garnett Day, Downey Ave Christian Church 

Rev. Jean Denton, St. Paul’s Episcopal Church 

Rev. Brian Durand, St. Luke’s United Methodist Church 

Rabbi Sandy Eisenberg-Sasso, Congregation Beth-El Zedeck 

Rev. Pat Engel, Epworth United Methodist Church 

Rev. Ed Fischer, Trinity United Methodist Church 

Fr. Tom Fox, O.F.M., Archdiocese of Indianapolis 

Rev. Joseph Freeman, Sr., Christ the Savior Lutheran Church 

Rev. Carol Fritz, Sheridan United Methodist Church 

Rev. Dr. Daniel Gangler, Indiana Area, United Methodist Church 

Rev. James Gentry, Indiana Area Fdtn., United Methodist Ch. 

Rev. Henry Gerner, United Methodist Church 

Rev. John Gibson, United Methodist Church 

Rev. Betty Gilbert-Griffin, Immanuel Presbyterian Church 

Fr. Jeffrey Godecker, Immaculate Heart Catholic Church 

Rev. Ronald Goldfarb, St. Timothy’s Episcopal Church 

Fr. Todd Goodson, St. Ambrose Catholic Church 

Rev. C. Mac Hamon, Castleton United Methodist Church 

Rev. Dr. Adolf Hansen, St. Luke’s United Methodist Church 

Rev. Holly Hardsaw, Horizons of Faith United Methodist 

Rev. Charles Harrison, Barnes United Methodist Church 

Rev. C.J. Hawking, United Methodist Church 

Rev. Rosella Helms, St. Mark’s Carmel United Methodist Ch. 

Rev. Dr. James Higginbothham, Earlham School of Religion 

Rev. Aaron Hobbs, New Market United Methodist Church 

Rev. James P. Hollis, Westview Christian Church 

Rev. Jonathan Hutchinson, St. David’s Episcopal Church 

Rev. Bill Johnson, Avon United Methodist Church 

Rev. William Keith, Indianapolis East, United Methodist Ch. 

Rev. Karen King, Trinity Episcopal Church 

Rev. Keith Kriesal, Our Redeemer Lutheran Church 

Rev. Douglas Kriz, Speedway Christian Church 

Rev. Thomas M. Kryder-Reid, Trinity Episcopal Church 

Sr. Mary Ann Lechner, S.P., Sisters of Providence 

Rev. Meredith Loudon, United Church of Christ 

Rev. Zoila Manzanares, Christ Church Cathedral (Episcopal) 

Rev. Mike Mather, Broadway United Methodist Church 

Fr. John McCaslin, St. Anthony, Holy Trinity Catholic Ch. 

Rev. Linda McCrae, Central Christian Church 

Rev. Greg McGarvey, Carmel United Methodist Church 

Rev. Linda McKiernan-Allen, First Christian Church, New Castle 

Rev. Kent Millard, St. Luke’s United Methodist Church 

Rev. Jack Miller, Epworth United Methodist Church 

Rev. Dr. Richard Moman, Christian Theological Seminary 

Pastor James Mulholland, Irvington Friends Meeting 

Rev. Wayne Nichols, Faith United Methodist Church 

Rev. William Nottingham, Disciples of Christ, United Ch. of Christ 

Rev. Bill Novak, Bethlehem Lutheran Church 

Fr. Arturo Ocampo, O.F.M., St. Patrick Catholic Church 

Fr. Michael E. O’Mara, St. Mary Catholic Church 

Rev. David Penalva, Vida Nueva United Methodist Church 

Rev. Mark J. Powell, Christian Theological Seminary 

Fr. Marty Peters, Archdiocese of Indianapolis 

Rev. Bonnie Plybon, Victory United Methodist Church 

Rev. Steve Rasmussen, Union Chapel United Methodist Church 

Rev. Robert Reister, Allisonville Christian Church 

Fr. Joseph G. Riedman, Holy Spirit Catholic Church 

Rev. Leon Riley, Central Christian Church 
90 

Rev. Gwendolyn Roberts, Metro Ministries, United Methodist Ch. 

Imam Michael Saahir, Nur-Allah Islamic Center 

Rabbi Dennis Sasso, Congregation Beth-El Zedeck 

Rev. Michael Scaife, New Light Christian Church 

Rev. Lisa Schubert, North United Methodist Church 

Rev. Steven C. Schwab, St. Thomas Aquinas Catholic Church 

Rev. Canon David I. Shoulders, The Episcopal Church 

Rev. David J. Smith, Abundant Grace Evangelical Lutheran 

Rev. Dr. L. Wayne Smith, Abundant Harvest United Methodist Ch. 

Rev. Diane Spleth, Franklin Central Christian Church 

Rev. Ned Steele, Indianapolis West, United Methodist Ch. 

Rev. Kevin Stiles, Cumberland United Methodist Church 

Rev. Dan Strobel, St. Andrew’s Lutheran Church 

Rev. George Sullivan-Davis, Christian Church (Disciples of Christ) 

Rev. John Thomas, New Palestine United Methodist Church 

Rev. Edgar A. Towne, emeritus, Christian Theological Seminary 

Rev. Randall Updegraff, Spleth Geist Christian Church 

Rev. Laurin Vance, Salem Lutheran Church 

Rev. Art Vermillion, Christian Theological Seminary 

Rev. Doug Walker, Rosedale United Methodist Church 

Rev. Reid Walker, Zionsville United Methodist Church 

Rev. Rodger Ward, Mace/New Ross United Methodist 

Rabbi Lewis Weiss, Indianapolis Jewish Community 

Fr. Christopher Weldon, All Saints Catholic Church 

The Rev. William D. Wieland, St. Andrew’s Episcopal Church 

Rev. Kirsteen Wilkinson, St. Alban’s Episcopal Church 

Rev. Canon Alfredo Williams, Christ Church Cathedral (Episcopal) 

Rev. Richard Willoughby, Promise Land Christian Church 

Rev. David Wise, Otterbein United Methodist Church 

Rev. Cynthia Wolfe, Bethel African Methodist Episcopal Ch. 

Rev. Kevin Wrigley, Plainfield United Methodist Church 

Rev. Amanda Yoder Schrock, First Mennonite Church 
91 
92 
93 
94 
95 
96 
97 
98 
99 
100 
101 
102 
103 
104 
105 
106 

[Questions submitted for the record and their responses follow:] 

U.S. CONGRESS, 

Washington, DC, August 5, 2011. 

Mr. JONATHAN C. FRITTS, 

Morgan Lewis, 1111 Pennsylvania Avenue, NW, Washington, DC 20004-2541. 

DEAR MR. FRITTS: Thank you for testifying at the May 26, 2011, Subcommittee 

on Health, Employment, Labor, and Pensions hearing entitled, ‘‘Corporate Campaigns and the NLRB: The Impact of Union Pressure on Job Creation.’’ I appreciate 

your participation. 

Enclosed are additional questions submitted by Committee members following the 

hearing. Please provide written responses no later than August 19, 2011, for inclu-
107 

sion in the official hearing record. Responses should be sent to Benjamin Hoog of 

the Committee staff who may be contacted at (202) 225-4527. 

Thank you again for your contribution to the work of the Committee. 

Sincerely, 

PHIL ROE, Chairman, 

Subcommittee on Health, Employment, Labor, and Pensions. 

QUESTIONS FROM REPRESENTATIVE ROBY

Representing a district that is in a Right-To-Work State, the current activist 

agenda of the National Labor Relations Board greatly concerns me. Congress has 

a responsibility to ensure the NLRB objectively applies the law written by the people’s elected representatives. Congress must also work to ensure labor interests are 

not undermining an employer’s efforts to create jobs. At a time when more than 14 

million individuals are unemployed and searching for work, public officials in Washington should look to provide greater certainty to America’s employers so they can 

grow their businesses and create new jobs, not hinder them. Unfortunately, the recent rulings and proceedings of the NLRB have demonstrated otherwise. 

1. In your testimony you highlighted the controversial Boeing case before the 

NLRB. In your opinion, does this case threaten Right-To-Work states and their ability to compete with states that are Non-Right-To-Work states? 

2. If the NLRB rules in favor of the International Association of Machinists & 

Aerospace Workers, do you foresee business owners less likely to open or expand 

their businesses into Right-To-Work states? 
108 
109 

[Whereupon, at 11:58 a.m., the subcommittee was adjourned.] 

Æ