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	<title> - RESTORING BALANCE AND FAIRNESS TO THE NATIONAL LABOR RELATIONS BOARD</title>
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	[House Hearing, 115 Congress]
	[From the U.S. Government Publishing Office]





	RESTORING BALANCE AND FAIRNESS TO
	THE NATIONAL LABOR RELATIONS BOARD

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

	HEARING

	before the

	SUBCOMMITTEE ON HEALTH,
	EMPLOYMENT, LABOR, AND PENSIONS

	COMMITTEE ON EDUCATION
	AND THE WORKFORCE

	U.S. House of Representatives

	ONE HUNDRED FIFTEENTH CONGRESS

	FIRST SESSION

	__________

	HEARING HELD IN WASHINGTON, DC, FEBRUARY 14, 2017

	__________

	Serial No. 115-4

	__________

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




	[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]





	Available via the World Wide Web:
	www.gpo.gov/fdsys/browse/
	committee.action?chamber=house&committee=education
	or
	Committee address: http://edworkforce.house.gov





	_________

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	____________________________________________________________________
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	COMMITTEE ON EDUCATION AND THE WORKFORCE

	VIRGINIA FOXX, North Carolina, Chairwoman

	Joe Wilson, South Carolina Robert C. ``Bobby'' Scott,
	Duncan Hunter, California Virginia
	David P. Roe, Tennessee Ranking Member
	Glenn ``GT'' Thompson, Pennsylvania Susan A. Davis, California
	Tim Walberg, Michigan Raul M. Grijalva, Arizona
	Brett Guthrie, Kentucky Joe Courtney, Connecticut
	Todd Rokita, Indiana Marcia L. Fudge, Ohio
	Lou Barletta, Pennsylvania Jared Polis, Colorado
	Luke Messer, Indiana Gregorio Kilili Camacho Sablan,
	Bradley Byrne, Alabama Northern Mariana Islands
	David Brat, Virginia Frederica S. Wilson, Florida
	Glenn Grothman, Wisconsin Suzanne Bonamici, Oregon
	Steve Russell, Oklahoma Mark Takano, California
	Elise Stefanik, New York Alma S. Adams, North Carolina
	Rick W. Allen, Georgia Mark DeSaulnier, California
	Jason Lewis, Minnesota Donald Norcross, New Jersey
	Francis Rooney, Florida Lisa Blunt Rochester, Delaware
	Paul Mitchell, Michigan Raja Krishnamoorthi, Illinois
	Tom Garrett, Jr., Virginia Carol Shea-Porter, New Hampshire
	Lloyd K. Smucker, Pennsylvania Adriano Espaillat, New York
	A. Drew Ferguson, IV, Georgia

	Brandon Renz, Staff Director
	Denise Forte, Minority Staff Director
	------

	SUBCOMMITTEE ON HEALTH, EMPLOYMENT, LABOR, AND PENSIONS

	TIM WALBERG, Michigan, Chairman

	Joe Wilson, South Carolina Gregorio Kilili Camacho Sablan,
	David P. Roe, Tennessee Northern Mariana Islands
	Todd Rokita, Indiana Ranking Member
	Lou Barletta, Pennsylvania Frederica S. Wilson, Florida
	Rick W. Allen, Georgia Donald Norcross, New Jersey
	Jason Lewis, Minnesota Lisa Blunt Rochester, Delaware
	Francis Rooney, Florida Carol Shea-Porter, New Hampshire
	Paul Mitchell, Michigan Adriano Espaillat, New York
	Lloyd K. Smucker, Pennsylvania Joe Courtney, Connecticut
	A. Drew Ferguson, IV, Georgia Marcia L. Fudge, Ohio
	Suzanne Bonamici, Oregon


	C O N T E N T S

	----------
	Page

	Hearing held on February 14, 2017................................ 1

	Statement of Members:
	Sablan, Hon. Gregorio Kilili Camacho, Ranking Member,
	Subcommittee on Health, Employment, Labor and Pensions..... 4
	Prepared statement of.................................... 6
	Walberg, Hon. Tim, Chairman, Subcommittee on Health,
	Employment, Labor and Pensions............................. 1
	Prepared statement of.................................... 3

	Statement of Witnesses:
	Aloul, Ms. Reem, President, Zay Enterprises, Inc. D/B/A
	Brightstar Care of Arlington, VA........................... 46
	Prepared statement of.................................... 48
	Davis, Ms. Susan, Partner, Cohen, Weiss and Simon, LLP....... 52
	Prepared statement of.................................... 54
	LaJeunesse, Mr. Raymond J. Jr., Vice President and Legal
	Director, National Right to Work Legal Defense Foundation,
	Inc........................................................ 66
	Prepared statement of.................................... 68
	Larkin, Mr. Kurt G., Partner, Hunton and Williams LLP........ 10
	Prepared statement of.................................... 12

	Additional Submissions:
	Courtney, Hon. Joe, a Representative in Congress from the
	State of Connecticut:
	News Release dated January 26, 2017, from Bureau of Labor
	Statistics (BLS)....................................... 93
	Mr. LaJeunesse:
	Article: Cost of Living-Adjusted Poverty Higher in
	Forced-Unionism States................................. 134
	Article: Since 2008, Private Health Coverage Has Risen by
	6.04 Million in Right to Work States, But Hasn't Risen
	in Forced-Dues States.................................. 136
	Article: Right-to-Work States Have Lower Workplace Injury
	Rates.................................................. 139
	Fact Sheet dated January 7, 2017, from National Institute
	for Labor Relations Research (NILRR)................... 141
	Fact Sheet dated January 17, 2017, from National
	Institute for Labor Relations Research (NILRR)......... 146
	Fact Sheet dated January 2017, from National Institute
	for Labor Relations Research (NILRR)................... 151
	Article: Little Evidence That Unions Make Workers Safer.. 153
	Letter dated February 28, 2017, from National Right To
	Work Legal Defense Foundation, Inc..................... 155
	Mr. Sablan:
	Teamsters News dated February 1, 2017, from International
	Brotherhood of Teamsters............................... 128
	Letter dated February 2, 2017, from International
	Association of Fire Fighters........................... 131
	Letter dated February 13, 2017, from United Steelworkers
	(USW).................................................. 129
	Appellate Court Outcomes for National Labor Relations
	Board Decisions........................................ 158
	Chairman Walberg:
	Letter dated February 14, 2017, from Coalition for a
	Democratic Workplace................................... 123
	Letter dated February 14, 2017, from Retail Industry
	Leaders Association (RILA)............................. 125
	Prepared statement of the NSTSO, Representing America's
	Travel Plazas and Truckstops........................... 160
	Letter dated February 14, 2017, from Argentum............ 166
	Letter dated February 28, 2017, from Chamber of Commerce. 168
	U.S. Chamber of Commerce National Labor Relations Board
	Review................................................. 169
	Wilson, Hon. Joe, a Representative in Congress from the State
	of South Carolina:
	Prepared statement of.................................... 169
	Questions submitted for the record by:
	Rooney, Hon. Francis, a Representative in Congress from
	the State of Florida.................................172, 176
	Mr. Wilson..............................................174,176
	Response to questions submitted for the record:
	Ms. Aloul................................................ 177
	Mr. LaJeunesse........................................... 179
	Mr. Larkin............................................... 183


	RESTORING BALANCE AND FAIRNESS TO THE NATIONAL LABOR RELATIONS BOARD

	----------


	Tuesday, February 14, 2017

	House of Representatives,

	Subcommittee on Health,

	Employment, Labor, and Pensions

	Committee on Education and the Workforce,

	Washington, D.C.

	----------

	The Subcommittee met, pursuant to call, at 10:03 a.m., in
	Room 2175, Rayburn House Office Building, Hon. Tim Walberg
	[chairman of the subcommittee] presiding.
	Present: Representatives Walberg, Wilson of South Carolina,
	Roe, Rokita, Allen, Lewis, Rooney, Mitchell, Smucker, Ferguson,
	Sablan, Wilson of Florida, Norcross, Blunt Rochester, Shea-
	Porter, Espaillat, Courtney, Fudge, and Bonamici.
	Also Present: Representatives Foxx and Scott.
	Staff Present: Bethany Aronhalt, Press Secretary; Andrew
	Banducci, Workforce Policy Counsel; Courtney Butcher, Director
	of Member Services and Coalitions; Ed Gilroy, Director of
	Workforce Policy; Callie Harman, Legislative Assistant; Nancy
	Locke, Chief Clerk; Geoffrey MacLeay, Professional Staff
	Member; John Martin, Professional Staff Member; Dominique
	McKay, Deputy Press Secretary; James Mullen, Director of
	Information Technology; Krisann Pearce, General Counsel; Alissa
	Strawcutter, Deputy Clerk; Olivia Voslow, Staff Assistant;
	Joseph Wheeler, Professional Staff Member; Tylease Alli,
	Minority Clerk/Intern and Fellow Coordinator; Austin Barbera,
	Minority Press Assistant; Denise Forte, Minority Staff
	Director; Nicole Fries, Minority Labor Policy Associate;
	Christine Godinez, Minority Staff Assistant; Richard Miller,
	Minority Senior Labor Policy Advisor; Veronique Pluviose,
	Minority Civil Rights Counsel; and Elizabeth Watson, Minority
	Director of Labor Policy.
	Chairman Walberg. A quorum being present, the Subcommittee
	on Health, Employment, Labor, and Pensions will come to order.
	Good morning to each of you. Welcome to the first hearing
	of the HELP Subcommittee in the 115th Congress.
	Before I begin, I'd like to congratulate Ranking Member
	Sablan on his selection to serve as the subcommittee senior
	Democrat. Welcome. I look forward to working together
	throughout the 115th Congress as we tackle the tough challenges
	facing our country.
	After years of struggling through an anemic economy,
	sluggish job growth, rising healthcare costs, and stagnant
	wages, American people are expecting--in fact, they are
	demanding--a new direction for this country. They want
	policymakers to advance a bold, pro-growth agenda that will
	reduce the regulatory burden on small businesses, deliver a
	stronger, healthier economy, and provide hope and prosperity to
	families and future generations.
	The American people are looking for a better way, and this
	is precisely what this Congress, working with the new
	administration, is committed to delivering. Restoring balance
	and fairness to the National Labor Relations Board will play an
	important role in this effort.
	More than 80 years ago, President Franklin Delano Roosevelt
	signed the National Labor Relations Act to guarantee the right
	of workers to organize and collectively bargain over terms and
	conditions of employment, such as wages and benefits.
	Approximately 10 years later, Congress would reform the law to
	enact a basic set of protections for employers as well, such as
	the right to communicate with their workforce on employment and
	union-related matters.
	Together, both the original law and the subsequent
	amendments to the law are designed to provide a level playing
	field between employers and union leaders. But more
	importantly, they're designed to protect the right of workers
	to make free and informed decisions about whether they want to
	join a union.
	A neutral arbiter was created to maintain the balance
	Congress established in the law, protect worker free choice,
	and serve as an unbiased judge over labor disputes. The goal
	was to have an impartial referee who would apply the rules of
	the game fairly and objectively. The neutral arbiter was the
	National Labor Relations Board, although you wouldn't know it
	from the actions it has taken in recent years.
	We have repeatedly seen the Obama NLRB overturn
	longstanding labor policies and put in place new policies
	designed to empower special interests. It's why the board
	adopted an ambush election rule that chills employers' free
	choice and free speech, cripples worker free choice, and
	jeopardizes the privacy of workers and their families. It's why
	the board endorsed a new joint employer standard that will
	destroy jobs and make it harder for entrepreneurs and small
	businesses to pursue the American dream.
	It's also why the board is advancing a micro-union proposal
	that gerrymanders the workplace, thereby limiting the workplace
	mobility of employees and tying up employers in red tape. And
	it's also why the NLRB is expanding the power of union
	organizing on college campuses, whether it's organizing
	graduate students, student athletes, and others.
	This is, by no means, a comprehensive list of extreme
	partisan actions the NLRB has taken in recent years. As
	Republicans raised concerns with harmful consequences of these
	policies, our colleagues told us not to worry; these were all
	innocent changes that will improve the lives of working
	families. Meanwhile, workers have less time to make informed
	decisions in union elections. Micro unions are being certified
	across the country, and small businesses, franchises, are
	uncertain about the future. None of this, none of this, has
	helped invigorate the slowest economic recovery since the Great
	Depression.
	Small business owners and entrepreneurs deserve better.
	Workers and their families deserve better. And this Congress
	will demand better. In the weeks and months ahead, we will do
	everything we can to turn back this failed activist agenda and
	restore balance and fairness to the board. We will work to
	protect the rights of workers and employers and help create an
	environment where businesses can grow, and all workers can
	achieve a lifetime of success.
	Again, I look forward to working with all my colleagues on
	this important effort. With that, I will now recognize Ranking
	Member Sablan for his opening remarks.
	[The statement of Mr. Walberg follows:]

	Prepared Statement of Hon. Tim Walberg, Chairman, Subcommittee on
	Health, Employment, Labor and Pensions

	After years of struggling through an anemic economy, sluggish job
	growth, rising health care costs, and stagnant wages, the American
	people are expecting--in fact, they are demanding--a new direction for
	this country. They want policymakers to advance a bold, pro-growth
	agenda that will reduce the regulatory burden on small businesses,
	deliver a stronger, healthier economy, and provide hope and prosperity
	to families and future generations.
	The American people are looking for a better way, and that is
	precisely what this Congress--working with the new administration--is
	committed to delivering. Restoring balance and fairness to the National
	Labor Relations Board will play an important role in this effort.
	More than 80 years ago, President Franklin Delano Roosevelt signed
	the National Labor Relations Act to guarantee the right of workers to
	organize and collectively bargain over terms and conditions of
	employment, such as wages and benefits. Approximately 10 years later,
	Congress would reform the law to enact a basic set of protections for
	employers as well, such as the right to communicate with their
	workforce on employment and union-related matters.
	Together--both the original law and the subsequent amendments to
	the law--are designed to provide a level playing field between
	employers and union leaders. But more importantly, they are designed to
	protect the right of workers to make free and informed decisions about
	whether they want to join a union.
	A neutral arbiter was created to maintain the balance Congress
	established in the law, protect worker free choice, and serve as an
	unbiased judge over labor disputes. The goal was to have an impartial
	referee who would apply the rules of the game fairly and objectively.
	That neutral arbiter was the National Labor Relations Board, although
	you wouldn't know it from the actions it has taken in recent years.
	We have repeatedly seen the Obama NLRB overturn long-standing labor
	policies and put in place new policies designed to empower special
	interests. It's why the board adopted an ambush election rule that
	chills employer free speech, cripples worker free choice, and
	jeopardizes the privacy of workers and their families. It's why the
	board endorsed a new joint employer standard that will destroy jobs and
	make it harder for entrepreneurs and small businesses to pursue the
	American dream.
	It's also why the board is advancing a micro-union proposal that
	gerrymanders the workplace, thereby limiting the workplace mobility of
	employees and tying up employers in red tape. And it's also why the
	NLRB is expanding the power of union organizing on college campuses,
	whether it's organizing graduate students, student athletes, and
	others.
	This is by no means a comprehensive list of the extreme, partisan
	actions the NLRB has taken in recent years. As Republicans raised
	concerns with the harmful consequences of these policies, our
	colleagues told us not to worry; these were all innocent changes that
	will improve the lives of working families. Meanwhile, workers have
	less time to make informed decisions in union elections, micro unions
	are being certified across the country, and small business franchisees
	are uncertain about the future. None of this has helped invigorate the
	slowest economic recovery since the Great Depression.
	Small business owners and entrepreneurs deserve better. Workers and
	their families deserve better. And this Congress will demand better. In
	the weeks and months ahead, we will do everything we can to turn back
	this failed, activist agenda and restore balance and fairness to the
	board. We will work to protect the rights of workers and employers, and
	help create an environment where businesses can grow and all workers
	can achieve a lifetime of success.
	______

	Mr. Sablan. Thank you very much, Mr. Chairman. Let me also
	begin by congratulating you on your selection to be chairman of
	the--our Subcommittee on Health, Employment, Labor, and
	Pensions.
	I'd also like to greet and welcome all our witnesses this
	morning. We would very much like to hear your points of view.
	This is my first meeting, too, as ranking member of this
	subcommittee. And I know that we have different personal
	backgrounds and experiences, and I know as chairman and ranking
	member we are both expected to represent the views of our
	respective side of the aisles, but I hope that coming fresh to
	our jobs, as we both do, we may be able to be free from
	preconceptions.
	I hope we can remain willing to listen to each other and to
	the many points of view we will hear from other members and
	witnesses who will appear before this committee. I really do
	look forward to working with you.
	And as I see it, we have two choices in today's hearing and
	over the next 2 years, as we examine the National Labor
	Relations Act. The purpose of the NLRA is to strengthen unions
	as an institution in our economy to ensure that wealth is more
	fairly shared.
	The preamble to the Act states, and I quote, ``The
	inequality of bargaining power between employees who do not
	possess full freedom of association, or actual liberty of
	contract and employers who are organized in the corporate or
	other forms of ownership associations substantially burdens and
	affects the flow of commerce, and tends to aggravate recurrent
	business depressions, by depressing wage rates and the
	purchasing power of wage earners in industry and by preventing
	destabilization of competitive wage rates and working
	conditions within and between industries,'' end quote.
	Here is the policy prescription set forth in the National
	Labor Relations Act: ``It is declared to be the policy of the
	United States to eliminate the causes of certain substantial
	obstructions to the free flow of commerce and to mitigate and
	eliminate this obstruction when they have occurred by
	encouraging the practice and procedure of collective
	bargaining, and by protecting the exercise by workers of full
	freedom of association, self-organization, and designation of
	representatives of their own choosing for the purpose of
	negotiating the terms and conditions of their employment or
	other mutual aid or protection.'' Nothing harmful there.
	Now, the question is, does this committee update the
	National Labor Relations Act so it can be more effective in
	implementing these goals? Or do we go back to the year prior to
	its enactment, eighty years ago--older than I am, and I'm an
	older man--and find ways to undermine its purposes? We have
	choices. We can address the needs of working Americans whose
	pay has been largely stagnant over the past several decades,
	despite rising productivity. We can try to rebuild the middle
	class and those who want to climb the ladder to get there.
	This is particularly important following the hollowing out
	of so many good-paying jobs caused by the economic collapse
	during the Great Recession. We can study the economic history
	of our country to assess how unions helped to make sure that
	growth in productivity rates was closely linked to growth in
	wage rates.
	When the economy grew after the Great Recession, data shows
	that most of the new wealth was funneled disproportionately to
	the 1 percent. While the benefits began to spread more widely
	in the past few years, one thing is unmistakable: Far too many
	have been left behind. We know from studies that the declining
	union density and collective bargaining coverage is closely
	associated with rise in income inequality.
	The median weekly income of full-time wage or salary
	workers who are union members in 2014 was $1,004, according to
	the U.S. Bureau of Labor Statistics. For non-union members, it
	was $802. Unionized workers also have more access to paid
	holidays, paid sick leave, life insurance, and medical and
	retirement benefits than those workers who are not unionized.
	At home in my district, in the Marianas, we don't have many
	unions. But I know that our unionized communication workers are
	earning about $3.50 above the minimum wage, which is $6.55 an
	hour at the entry level, and two to three times as much as
	minimum at the higher levels.
	Another choice is to go down the same path we have been
	following for the past three sessions of Congress when there
	have been 25 hearings and markups focused exclusively on
	weakening the National Labor Relations Act. Bills have been
	passed which give employers greater power to block union
	organizing efforts. Other bills actually blocked the ability of
	the National Labor Relations Board to function.
	When you consider that private sector unions represent a
	mere 6.4 percent of the workforce, it is troubling that the
	committee has directed so much time on this small, independent
	agency. But attacks on the National Labor Relations Board are
	what they are: a proxy for attacks on unions.
	We would like to work with you, Mr. Chairman, to try to
	chart a new path. We have legislative ideas to improve the
	National Labor Relations Act, which are outlined in the WAGE
	Act, and I would like to see if we can get this discussed in
	committee.
	I want to thank our witnesses for their work in preparing
	for today's hearing, and I look forward to hearing your
	testimony.
	And with that, Mr. Chairman, I yield back. Thank you very
	much.
	[The statement of Mr. Sablan follows:]


	[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



	Chairman Walberg. I thank the gentleman.
	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.
	It's now my pleasure to introduce our distinguished panel
	of witnesses. First, Mr. Kurt G. Larkin is a partner of Hunton
	& Williams, LLP, in Richmond, Virginia. Mr. Larkin advises
	businesses of all sizes on a host of traditional labor
	subjects, including union organizing campaigns, single and
	multiemployer collective bargaining, handling strikes and
	lockouts, and responding to and litigating unfair labor
	practice charges. He has advised clients in numerous union
	organizing campaigns, including under the NLRB's new
	representation case procedures, the ambush election rules, and
	help clients prepare advanced strategies for responding to
	union organizing under the board's new rules. Welcome.
	Ms. Reem Aloul is the owner of BrightStar Care of
	Arlington, in Arlington, Virginia. After over 20 years of
	senior executive experience in management consulting, Ms. Aloul
	decided to focus on helping people in her local community
	remain in the comfort of their homes. She founded BrightStar
	Care of Arlington and became a certified senior adviser in the
	field. She will testify on behalf of the Coalition to Save
	Local Businesses. Welcome.
	Ms. Susan Davis is a partner at Cohen, Weiss, and Simon of
	New York City. Ms. Davis specializes in the representation of
	national regional, and local labor unions in all aspects of
	collective bargaining, litigation, mergers, affiliations,
	organizing, strategic planning, and internal union governance.
	Welcome.
	And finally, Mr. Raymond LaJeunesse is a vice president and
	legal director for the National Right to Work Legal Defense and
	Education Foundation, Incorporated, in Springfield, Virginia.
	The Foundation is a nonprofit, charitable organization that
	works on behalf of employees. Its mission is to eliminate
	compulsory unionism abuses through strategic litigation, public
	information, and education programs. Mr. LaJeunesse has
	extensive experience assisting employees with matters before
	the NLRB.
	I now ask our witnesses to stand and raise your right hand.
	[Witnesses sworn.]
	Chairman Walberg. You may be seated. Let the record reflect
	the witnesses answered in the affirmative.
	Before I recognize you to provide your testimony, let me
	briefly explain our lighting system, which is not new to all of
	you, but you have five minutes to present your testimony. When
	you begin, the light in front of you will turn green, go; when
	one minute is left, the yellow light will turn on; and then
	when the red light comes on, finish up your concluding thought
	as quickly as possible so that we have the opportunity for all
	testimony to be given and then the opportunity for questioning.
	So having said that, let me recognize Mr. Larkin for your
	five minutes of testimony.

	TESTIMONY OF KURT G. LARKIN, PARTNER, HUNTON & WILLIAMS LLP,
	RICHMOND, VIRGINIA

	Mr. Larkin. Thank you. Chairwoman Foxx, Subcommittee
	Chairman Walberg, Ranking Member Sablan, and members of the
	subcommittee, it's an honor to be here with you today to
	discuss the topic of restoring balance to the National Labor
	Relations Board.
	The NLRB has a long and distinguished history of
	administering our Federal labor laws, and regulating the
	conduct of labor management relations in the United States.
	Now, the Board's primary obligation under the National Labor
	Relations Act are to oversee the formation of collective
	bargaining units, and to investigate and remedy unfair labor
	practices committed by employers and labor organizations alike.
	In carrying out these duties, the Board is generally expected
	to act as a neutral arbiter of facts in cases.
	Since the Board is made up of political appointees, its
	interpretation and application of the policies underlying the
	act, its enforcement priorities, and its case precedence do
	tend to shift depending on which political party holds the
	majority. As a result, labor practitioners like myself have
	come to expect at least some changes when control of the Board
	changes hands.
	Now, provided that its members and its general counsel
	confine their actions to the limitations of the act, the system
	remains workable, although sometimes unpredictable.
	Unfortunately, and in contrast to the modest and gradual
	changes we've seen back and forth over the years, the Board,
	over the past eight years, has produced some of the most
	drastic and one-sided policy changes in its history.
	And in almost every instance, these changes have worked
	substantial hardships on the business community. For example,
	the Board has promulgated burdensome new election procedures
	that dramatically reduce the time employers have to respond to
	union organizing campaigns and which paralyze them with
	administrative tasks. It has established an obtuse new standard
	announced in the Board's now infamous Specialty Healthcare
	decision for creating collective bargaining units to too easily
	allow unions to gerrymander the unit, based only on the extent
	of organization.
	This standard has created the potential to balkanize an
	employer's workforce by dividing it into multiple units and
	paralyzing the employer with endless and competing
	negotiations. The Board's also rewritten the rule book for
	determining whether a business is a joint employer of the
	employees of another business. I'm talking, of course, about
	Browning-Ferris.
	The test in that case overturned decades of settled law and
	allows for a joint employer finding if a business merely
	retains the right to affect the employment terms of another
	business' employees. The Board has since sought to force that
	test on other industries, including the franchising industry,
	threatening what is arguably the Nation's number-one engine for
	minority and small business growth.
	Finally, the Board has waged an assault on an employer's
	right to maintain commonsense workplace policies, including
	confidentiality rules, employer arbitration programs, civility
	codes, and even rules that protect an employer's legal
	obligation to investigate and remediate complaints of workplace
	misconduct. These are just a few examples of the precedents the
	Board has made over the past eight years.
	And the common theme in all of these cases is that the
	Board's rationale for the change neglects to account for the
	realities of the American workplace and the challenge business
	owners of all sizes face in today's economy. The Board has
	given little thought over the last decade to how its policies
	can hinder an employee's ability, or an employer's ability to
	run a business and maintain a productive workplace.
	So while the ability to set the agenda may be the
	prerogative of those in control of the Board, its actions over
	the past 8 years have turned the labor management landscape
	upside down. We're not asking the Board to be pro-business;
	we're just asking that it not be anti-business.
	I respectfully submit that its long pastime to restore a
	sense of fairness and commonsense at the NLRB. That starts with
	the re-examination of some of these precedents. Some changes
	may be made here in Congress. For example, there have been
	proposals to modify certain definitions in the act, and return
	the joint employers standard to that which existed prior to the
	Board's recent decisions. And that would be a good start. But
	the Board itself must undertake some of these changes. This
	can't take place, however, until it's fully constituted. Only
	three members are presently serving terms, leaving two seats
	open.
	In closing my remarks, I would just suggest that it's
	perhaps more imperative than ever that Congress and the
	President reconstitute the Board to its full five-member
	capacity so that it can begin to re-examine and hopefully
	restore its precedents to a State that more meaningfully
	accounts for the realities of the American workplace.
	Thank you, again, for the privilege of testifying today.
	[The statement of Mr. Larkin follows:]

	[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


	Chairman Walberg. Thank you.
	Now I recognize Ms. Aloul for your 5 minutes of testimony.

	TESTIMONY OF REEM ALOUL, BRIGHTSTAR CARE OF ARLINGTON, ON
	BEHALF OF THE COALITION TO SAVE LOCAL BUSINESS, ARLINGTON,
	VIRGINIA

	Ms. Aloul. Thank you, sir. Chairman Walberg, Ranking Member
	Sablan, and distinguished members of the committee, my name is
	Reem. I own a BrightStar home care franchise in Arlington,
	Virginia. I thank you for the opportunity to appear before the
	subcommittee today.
	While there are many issues before the National Labor
	Relations Board, NLRB, that should be discussed, I'll focus my
	remarks today on how the NLRB changed the fundamental
	definition of employer, and how that is directly affecting
	locally-owned businesses like mine.
	I appear before you today on behalf of the Coalition to
	Save Local Businesses, a diverse group of locally-owned,
	independent small businesses, associations, organizations that
	is working to restore the commonsense traditional definition of
	joint employer.
	Mr. Chairman, my path to entrepreneurship started in Jordan
	where I was born. My father was also an entrepreneur. Like I
	would many years later, he left a comfortable job to make it on
	his own and provide a better life for my mom and three
	siblings. My mom stayed at home, cared for all four of us, and
	I finished high school in Jordan, went to the American
	University in Cairo for a degree in economics. I've been living
	in Arlington, Virginia, since 2004, and I'm pretty sure I got
	my entrepreneurial bug from my dad.
	I've traveled the world before starting my business,
	supporting businesses and governments around the world to
	improve their operations and service delivery. In 2013, as many
	entrepreneurs before and after me have done, I made a bold,
	risky decision to quit my job and pursue my dream of opening a
	business, of owning my own business.
	I decided to serve my own local community, and risked all
	of that, and my risk has paid off for my community, because my
	company is in its fourth year of operation, and I today have
	about 90 employees on our books. I established my business with
	two main goals: provide peace of mind for clients and their
	families, as they age at home; and provide job opportunities
	for people in my community.
	We find ourselves providing jobs to people who may need
	more flexibility to be able to succeed. We employ single moms,
	military spouses, students, and those who care for their own
	families as well. We're as flexible as we need to with their
	unique schedules, and they seem to greatly appreciate that.
	Independent monthly employee satisfaction surveys show, on
	average, that we have a 92 percent satisfaction in the last 16
	months.
	The decision by government officials here in Washington to
	change the joint employer standard is a baffling one, frankly,
	for me. The new employee standard created by the NLRB back in
	August 2015 is based on indirect control and even reserved,
	unexercised control. The policy is so broad, so unpredictable,
	it could be practically applied to anything in terms of
	business relations.
	Mr. Chairman, you cannot overstate the confusion caused by
	unlimited joint employer liability. Under this policy, it's a
	wonder why franchisers provide any support to franchisees
	because of fear of joint employment lawsuits. Fortunately, I've
	partnered with a wonderful franchisor, BrightStar out of
	Illinois. The company provides franchisees with a technology
	platform for billing, payroll, quality assurance, and things
	like that.
	Such resources are a big reason why entrepreneurs opt for a
	franchise model as opposed to their own standalone business.
	But now with the new joint employer standard that is based on
	indirect and unexercised control, why would franchisors
	continue to provide such resources? Out of fear of liability
	risk, they'll stop supporting franchisees, or maybe even regain
	that power over these businesses. Either way, small businesses
	lose.
	This is a small business issue. I presume you all want to
	support small businesses. Big corporations, after all, have
	resources, attorneys, economies of scale to adapt to joint
	employer. It's the small employers like myself who may run out
	of business partners because of this. Joint employer eventually
	will mean more corporations and fewer small businesses on Main
	Street.
	As a franchisee, one of many, I believe that the joint
	employer unfairly changes the rules of business in the middle
	of the game. I invested a career's worth of savings in this
	business, and now joint employer liability threatens everything
	I and many others like me have worked for. We need Congress to
	enact legislation that clears up the basic question of what is
	an employer. It can't be ambiguous. It can't be left to Federal
	administrations changing it one after the other.
	Every member should think what they're doing for small
	businesses. Many politicians today are making it harder to
	start the business, harder to thrive as an entrepreneur, and we
	need your help to make it clear: What does an employer mean?
	The joint employer standard doesn't make any sense. It
	makes it harder for entrepreneurs, for clients, for businesses,
	for employees, and the government itself as well. I'm in the
	business of making the tough times in life a little better for
	people. I'm here today asking Congress to make the lives of
	small business owners a little easier, a little more certain,
	providing a fair legislative fix to the harmful joint employer
	standard.
	To conclude, Mr. Chairman, this subcommittee also received
	a letter from several dozen employer and franchisee
	associations explaining further this issue. I commend this
	letter to you. I thank you, Mr. Chairman, for your work on
	behalf of the locally-owned businesses everywhere, and I would
	be more than happy to take any questions anybody may have.
	[The statement of Ms. Aloul follows:]


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	Chairman Walberg. Thank you, Ms. Aloul.
	I now recognize Ms. Davis for your testimony.

	TESTIMONY OF SUSAN DAVIS, PARTNER, COHEN, WEISS & SIMON, LLP,
	NEW YORK, NEW YORK

	Ms. Davis. Good morning, and thank you, Chairman Walberg,
	Ranking Member Sablan, and distinguished members of this
	subcommittee. Thank you for inviting me here today to respond
	to what I believe has been a bit of overheated rhetoric about
	what the Obama Board has done.
	During the past 35 years, I've practiced before the Reagan
	Board, the Bush Board, the Clinton Board, and the Obama Board.
	While that makes me feel a bit old, it also makes me feel well
	equipped to address what I believe is a misnomer. The Board
	does not need a re-calibration or a realignment or a
	restoration of balance in fairness.
	As Mr. Larkin noted, the Democratic and Republican Boards
	have differed on their view of the statute, on whether, as the
	chairman stated, it is a neutral act, or whether, as the
	preamble states, it's an act designed to promote collective
	bargaining. But regardless of our individual views, the Obama
	Board's view of the statute was rooted in the statute itself.
	When the rhetoric is swept aside and the temperature is
	taken down a bit, which I think is a good idea, the four flash
	points that brought us here are pretty uneventful. The Board
	did modernize the election rules to make modest and meaningful
	changes to the procedures; but when you look at the statistics,
	the number of cases in which the parties actually are able to
	agree to stipulate to an election without a hearing, which is
	92 percent, and the union's win rate, which is in the mid-60s,
	those statistics have not changed at all before or after the
	rules.
	Yes, the Board did clarify the standard it would apply in
	analyzing appropriate bargaining units. But that decision came
	squarely out of the D.C. Circuit Court of Appeals analysis in
	the Blue Man Group Vegas case--a three Republican-appointee
	panel--and seven Courts of Appeals have affirmed the Board's
	analysis.
	Additionally, in spite of the spectre of the proliferation
	of microunits, which, Mr. Chairman, you alluded to, the median
	unit before, now, during, after Specialty, about 26 people, is
	identical to the median unit in the decade prior to Specialty
	Health.
	Yes, in BFI, the Board did apply a common law agency test
	for analyzing joint employer. That's the same test the Board
	applied for 50 years prior to the narrowing of the doctrine
	under the Reagan and Bush Boards. This decision, like many
	others, the Obama Board issued was designed to make the act
	relevant in the modern workplace, where we have seen employers
	continue to shed the employer/employee relationship in order to
	minimize or negate liability. And we've seen an explosion of
	permatemps who work side by side with workers and deserve
	protection as well.
	The McDonald's complaint, which has caused such a hue and
	cry, was issued prior to BFI, under the old standard. And let's
	remember, McDonald's is only a complaint. There has been no ALJ
	decision. There has been no Board decision. We need to let the
	process run.
	It bears noting that the general counsel in the 2015
	Freshii franchisor decision--I would commend everyone in this
	room read that--found that, because the franchisor's control
	was limited to brand standards and food quality and the sorts
	of technology platforms that Ms. Aloul mentioned, and not to
	the employer/employee relationships, there was no joint
	employer liability.
	If a franchisor is currently exercising or reserving
	contractual authority over labor relations of its franchisees,
	the solution is simple: It can eliminate its liability by
	reducing that control; and if it chooses not to do that, there
	is now some congruity between a franchisor's responsibility and
	its liability.
	Finally, the Obama Board did decide that requiring
	employees to sign class-action waivers violated the NLRA. The
	NLRA is the only statute in this country that protects
	collective rights. And while that is a little more difficult
	for some to digest, it does protect those rights.
	More than 40 years ago, the Supreme Court, in the Eastex
	case, told us that employees' rights to join together to sue
	over terms and conditions of employment was protected. And the
	Supreme Court has said multiple times that an employer may not
	condition employment on waiving statutory rights. Murphy Oil
	involves no more than that.
	In closing, I'd like to say the following: I fear that the
	call to restore balance and order and fairness on the NLRB is a
	euphemism for restoring a labor law regime that delegitimizes
	unions and prevents workers from having a collective voice at
	work. I heard the same cry for a restoration of balance after
	the Clinton Board. It is, I believe, a code, a code for a Board
	that will weaken labor unions and disempower workers.
	History shows us that when workers--when unions are
	weakened, income inequality, which is at an all-time high right
	now, increases. Let us remember that President Trump campaigned
	on the promise of helping American workers on addressing
	decades of wage stagnation. Weakening the Board, and thereby
	weakening labor unions will only make that problem worse.
	Thank you, Mr. Chairman.
	[The statement of Ms. Davis follows:]


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	Chairman Walberg. Thank you.
	I now recognize Mr. LaJeunesse for your five minutes.

	TESTIMONY OF RAYMOND J. LAJEUNESSE, JR., VICE PRESIDENT & LEGAL
	DIRECTOR, NATIONAL RIGHT TO WORK LEGAL DEFENSE FOUNDATION,
	INC., SPRINGFIELD, VIRGINIA

	Mr. LaJeunesse. Chairwoman Foxx, Chairman Walberg, and
	distinguished committee members, unfortunately, the National
	Labor Relations Board majorities President Obama has appointed
	have often denied or diminished the rights of workers to
	refrain from union associations, rights they're guaranteed by
	section 7 of the act.
	In States without a right-to-work law, one of the most
	important rights that workers have is the right not to pay the
	part of union fees that represents the cost of political and
	other non-bargaining activity. That right was recognized in
	Communications Workers vs. Beck. In Beck, the Supreme Court
	affirmed a Fourth Circuit decision that under the NLRA,
	objecting non-members cannot be charged for a union's labor
	legislation expenditures.
	Moreover, in Machinists vs. Street, which Beck found
	controlling under the National Labor Relations Act, the court
	had held that the Railway Labor Act does not authorize union
	officials to use objecting employees' exacted funds to support,
	quote, ``the promotion or defeat of legislation.'' Yet, in
	United Nurses and Allied Professionals, the Obama Board held
	that lobbying used--quote, ``used to pursue goals that are
	germane to collective bargaining, contract administration, or
	grievance adjustment, is chargeable to objectors.''
	United Nurses exemplifies another way in which the Obama
	Board has eviscerated non-members' right not to pay for union
	non-bargaining activities. In Teachers Local 1 v. Hudson, the
	Supreme Court held that potential objectors must be given
	sufficient information to gauge the propriety of the union's
	fee, including, quote, ``verification by an independent
	auditor,'' unquote.
	Yet, in United Nurses, the Obama Board ruled that a union
	need not provide objectors with an auditor's verification. The
	Board majority argued that union's conduct under Beck need not
	be analyzed under a heightened First Amendment standard, as in
	public sector cases such as Hudson. However, the D.C. circuit
	had already explicitly rejected that argument in two cases in
	which it reversed the Board.
	The Obama Board also has applied a lenient standard to the
	common union requirement that objections to subsidizing union
	non-bargaining activities be renewed annually during a short
	window period. After three Federal courts ruled that workers
	should be free to make objections that continue in effect until
	withdrawn, the Obama Board did not hold annual objection
	requirements per se unlawful as the courts did. Instead, the
	Board decided to evaluate those requirements on a union-by-
	union basis to determine whether the union has a legitimate
	justification.
	Applying that loose standard, the Obama Board upheld the
	United Auto Workers' annual objection requirement without even
	considering the union's justifications, finding that the burden
	on non-members was de-minimus. As the dissent said, the burden
	is plainly and decidedly not de-minimus because objecting
	entails time and cost. And if non-members, quote, fail to
	timely renew their objection, they will automatically incur the
	obligation of paying a full agency fee, including funds for
	expenditures for nonrepresentational purposes.
	The Obama Board also has repeatedly undermined the right to
	refrain from union representation that NLRA section 7
	guarantees equally with the right to organize. A union may
	become an exclusive representative of all employees in an
	appropriate bargaining unit, either by winning a Board-
	conducted secret ballot election, or obtaining the employers'
	recognition based on a union showing of majority support on
	cards or a petition. Either way, this creates a monopoly. As
	the Supreme Court has held, exclusive representation
	extinguishes the individual employee's power to order his own
	relations with his employer.
	Employees can petition for an election to decertify a
	bargaining agent chosen by election, but not within one year
	after that election. That statutory bar does not apply to
	voluntary recognition. And the Board then created--created--
	it's not in the statute--a bar to decertification elections
	after voluntary recognition, and created a contract bar which,
	for up to a three-year period, no decertification election can
	be held.
	In 2007, in Dana Corporation, the Board created a procedure
	by which employees could decertify after a voluntary
	recognition, but the Obama Board, despite the fact that in the
	almost four years that followed Dana, the union recognized by
	the employer based on union authorization cards without a
	secret ballot election was rejected by the employees in one out
	every four Dana elections. The Obama Board in Lamons Gasket
	overruled Dana 3-1, incredibly asserting that Dana's ruling
	undermined employees' free choice.
	Other issues, which adversely affect employees are the
	ambush elections and the gerrymandering of bargaining units
	under Specialty Healthcare, both of which result in denying
	employees their right to be free from union association.
	I've recommended in my prepared remarks, I've submitted the
	written statement, presented to the committee several matters
	that the House can undertake and to solve these problems. But
	the most important one is the one that's already been
	mentioned, which is, the Board needs to be filled. We need five
	members on the Board to return us to sanity and the discussion
	of labor issues to return to employees--
	[The statement of Mr. LaJeunesse follows:]

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	Chairman Walberg. I thank the gentleman. Your time has
	expired, and we certainly appreciate the written testimony.
	And I'll begin the questioning by recognizing the chairman
	of the full committee, Dr. Foxx, for her five minutes.
	Ms. Foxx. Thank you very much, Mr. Chairman.
	And I want to thank all of our witnesses for being here
	today and sharing their expertise with us.
	Ms. Aloul, can employees effectively negotiate with a
	franchisee over their wages, hours, or other conditions of
	employment without the franchisor? And how would the inclusion
	of the franchisor affect the negotiating process?
	Ms. Aloul. Thank you for the question, Madam Chairwoman.
	They absolutely can do that, and this is what we do today. We
	decide, based on market demand, what jobs are needed and how
	many openings do we have. We post for them, we negotiate
	trades, we do raises, we do performance evaluations, and we do
	the direct placement of our employees with our clients on a
	day-to-day basis.
	We know where they live, we know their schedules, we know
	who has family issues and we need to work around their
	schedule. And it's definitely much harder, much slower, not
	good for the employees, and will absolutely affect quality and
	price for clients if it was done differently, ma'am.
	Ms. Foxx. Thank you very much.
	Mr. Larkin, on average, how many elections are appealed to
	the Board post election? In your experience, are these appeals
	based on minor issues, and how have the ambush election rules
	changed this process?
	Mr. Larkin. I'm not--I couldn't give you the exact number
	of--as a percentage of cases that are appealed to the Board
	post election. What I can tell you in my practice is that when
	one side or the other loses a close election, they often raise
	objections to the conduct of the election and seek review of
	the result with the Board.
	What the--that process, that part of the process hasn't
	really changed much under the new rules, but what they have
	done is that they've deferred until after the election the
	ability to get answers to some very important questions.
	I'll give you an example: Under the old rules, if an
	employer thought that a proposed bargaining unit included
	supervisors, the employer could raise that issue with the
	regional director; and if agreement couldn't be reached between
	the parties and the regional director on the answer to the
	question, there would be a hearing. And the regional director
	would take evidence and issue a ruling as to whether the
	employee in question is a supervisor.
	The reason it's so important to know the answer to a
	question like that in advance is that you know how to treat
	that person during the election campaign. If someone is a
	supervisor, you can communicate as the employer to the rest of
	the workforce through that individual; if they're not, they're
	a voter, they have section 7 rights that have to be
	acknowledged under the new rule. And so, the point being, that
	if you treat that person as a supervisor and you're wrong,
	you're violating the law.
	Under the new rules, you don't get an answer to that
	question up front. You basically have to roll the dice and take
	a guess as to whether you're right or wrong. So that's just one
	example of the ways that the change in the rules frustrated my
	client's ability to be effective in campaigns and something
	like that could certainly lead to a post-election challenge.
	Ms. Foxx. Thank you very much.
	Mr. LaJeunesse, you look like you wanted to respond to that
	a little bit, and you're welcome to do it. But in your
	experience, when a majority of employees no longer support a
	union, how are they able to easily get--are they able to easily
	get rid of it, and do the administrative procedures and red
	tape often frustrate them to the point that they consider
	giving up on the effort to get rid of the union?
	Mr. LaJeunesse. I think the short answer to your last
	question is yes. The new rules for representation elections,
	which also apply to decertification elections, are massive,
	very complex. And workers are not lawyers. And to work their
	way through that in the short period of time allowed under the
	new rules, the ambush election rules, it's not only the problem
	of the complexity, but it's also the problem in that short
	period of time.
	How does the average worker, who's up against the
	professional union organizer, organize and sell his point of
	view to his fellow employees at the same time he has got to
	find a lawyer to help him work his way through what the
	dissenters, when the rules were adopted, called a Mt. Everest
	of regulations.
	And I would add on the point with regard to the--I'm sorry.
	I lost my--
	Ms. Foxx. The previous, okay. Thank you very much.
	Chairman Walberg. Thank the gentlelady.
	Now I recognize the ranking member, Mr. Sablan.
	Mr. Sablan. Thank you very much, Mr. Chairman.
	Ms. Davis, in 2015, the National Labor Relations Board
	general counsel issued an advice memorandum determining not to
	find a joint employer relationship between Freshii, a food
	franchisor with over 100 stores in a dozen countries, and its
	franchisee in Illinois, because the franchisor's control was
	limited to brand standards and food quality.
	Can you explain the significance of this advice memorandum,
	particularly since it has been overlooked by many commentators
	who contend that the National Labor Relations Board is
	arbitrarily deeming franchisors and franchisees as joint
	employers?
	Ms. Davis. Yes. Thank you. The Freshii case--which really,
	I commend to everyone to read. It is an advice memorandum; it
	indicates how the general counsel will review cases, what it
	will prosecute and what it will not prosecute. And in the
	Freshii case, even though there was extensive technological
	support to the franchisees, the type of support that Ms. Aloul
	correctly said is so necessary, because there was not
	franchisor control over labor relations, over what employees
	were paid, what they were not paid, what their schedules were,
	the general counsel declined to prosecute and find a joint
	employer relationship.
	So I suggest what Freshii should tell all of us is to keep
	our powder a bit dry on how big this problem is, until we see
	what actually takes place as this doctrine evolves.
	Mr. Sablan. Alright. Thank you.
	Ms. Aloul, Chairwoman Foxx asked you a question, and I'm
	not sure that you answered them, but let me try in my own way.
	Tell me about your franchise agreement with your franchisor.
	Does this legal agreement dictate how much you should pay
	employees or what schedules to set up for your employees or set
	your disciplinary practices? Is that up to you, or does the
	franchise agreement set the terms and conditions for these
	arrangements with your employees?
	Ms. Aloul. Thank you for the question, sir. No, it does
	not. My franchise agreement does not talk about how we hire
	people, what we pay them, what kind of disciplinary action we
	do, none of that. So my short answer for you, sir, is no.
	Mr. Sablan. Okay.
	Ms. Aloul. But the issue is, really, when there's ambiguity
	in the law, it is very difficult for small business owners like
	myself to manage that. When the language says ``indirect,''
	``reserved,'' ``unexercised control,'' it makes it very
	difficult for people like me to interpret that. To be frank
	with you, when I hear language like that, it tells me that the
	government is telling me I reserve the right to do whatever I
	want to do with you at some stage in the future.
	Mr. Sablan. All right. So let me ask you, does your
	franchisor, BrightStar Care, come to your workplace and
	directly supervise the employees you hire for home care?
	Ms. Aloul. They do not.
	Mr. Sablan. They do not, okay.
	Ms. Aloul. They do visits for general quality assurance for
	brand standards, but not related to how we hire and manage
	people, no, sir.
	Mr. Sablan. So let me ask you another--does the franchisor
	tell you what to do if there is a union organizing effort, or
	is that up to you?
	Ms. Aloul. That is up to me.
	Mr. Sablan. That is up to you. So it sounds to me like
	you're managing employee relations as you deem appropriate, and
	that employee policies are yours to determine as the owner.
	Given that, can you explain how the BFI decision could impact
	your business?
	Ms. Aloul. Absolutely. Again, going back to unclear,
	ambiguous language, this is the enemy of business. When my
	franchisor hears such language, they are, rightly so, frankly,
	they're scared of lawsuits, of joint employment lawsuits. Based
	on that and again, given the fact that the language says
	indirect, unexercised--
	Mr. Sablan. Who's they? Wait, I am asking you because
	you're managing your employees. So you said they are worried
	about--who's they?
	Ms. Aloul. They, the franchisor. I am the contractual
	agreement--
	Mr. Sablan. So that's my question. So your franchisor may
	actually also be managing your employees, right, because
	they're--
	Ms. Aloul. No.
	Mr. Sablan. --working through you--
	Ms. Aloul. The business relationship includes way more than
	just managing employees. The business relationship includes
	quality standards, includes--
	Mr. Sablan. I understand that. I understand that. But they
	come and tell you on how to address your employee/employer
	relationship?
	Ms. Aloul. They don't.
	Mr. Sablan. They don't, but yet they do and somehow--am I
	correct?
	Ms. Aloul. No, you're not. I'm sorry, you're not.
	Mr. Sablan. But you're using the word ``they,'' come to
	you, they are worried about this, they are worried about that.
	Ms. Aloul. They're worried about the lack of clarity in the
	law, which affects the business relationship.
	Mr. Sablan. About your relationship with your employee?
	Ms. Aloul. No.
	Mr. Sablan. Thank you. My time is up, Mr. Chairman.
	Chairman Walberg. The gentleman's time has expired.
	I recognize myself for five minutes of questioning. Ms.
	Aloul, does operating your business in Northern Virginia create
	any specific challenges or opportunities that franchisees in
	other places might not experience?
	Ms. Aloul. Absolutely. When you decide to open your own
	business, you've got two paths to choose from: One is start
	your own business, stand alone, Reem and Associates; and the
	other one is to go up to a franchise model. People like me opt
	to go for a franchise model because you don't start from
	scratch. You want to be part of that community, the best
	practice, the support, like the technology platform that I
	mentioned in my testimony.
	So when--in the future, this interpretation of the NLRB for
	the new joint employer standard, it makes it less clear for
	people like me to know how much control am I going to have in
	my business. Is this going to scare my franchisor so that they
	want more control in my business? I don't want that. Is it
	going to scare them the other way around to say, you know what,
	we have got nothing to do with you. You're on your own. You
	have no support from us at all.
	That scares me as well, because I signed a franchise
	agreement in 2013 that is a 10-year agreement, and this changes
	the rules in the middle of the game. I need the support, and
	it's what encourages people like me to go into business and own
	their own business.
	Chairman Walberg. So everything for your 90 employees--am I
	correct, 90?
	Ms. Aloul. That is correct.
	Chairman Walberg. Ninety employees becomes tentative as
	well?
	Ms. Aloul. Yes. The 90 employees are ours. They have
	nothing to do with the franchisor. We employ them, we place
	them, we train them, we promote them.
	Chairman Walberg. Okay. Thank you. I think that clarifies a
	bit the challenges in running a business to benefit both your
	clients at specific times in their life that need help--
	Ms. Aloul. Absolutely.
	Chairman Walberg. --but also the employees to know and
	understand what type of arrangement they are in and that they
	can go directly to you.
	Ms. Aloul. Absolutely. So if I may add something, when you
	run a small business, you're it. I visit with my clients
	myself. I give them my business card, and it has my cell phone
	number at the back of it. I do that with my employees as well.
	They have access to me 24 hours a day, seven days a week.
	If they need to deal with a franchisor out of somewhere far
	away, they don't have that. It overcomplicates the process,
	quality will be lower, cost. Everybody in this room is going to
	need home care at one day or another. Some of us will need it
	in the next year or two, others in a couple of decades, but we
	all will.
	And when we do that, we need the service to be the best it
	can, the least expensive it can, and you want to be able to
	deal with somebody locally. You don't want to deal with a
	large--for me, you don't want to deal with a large corporation
	somewhere in the middle of the country. You want a local office
	here.
	Chairman Walberg. Appreciate that. Thank you.
	Mr. Larkin, our employer concerns about the ambush rule or
	micro unions based entirely on wanting to avoid a union, or are
	there other concerns, such as proper conduct during
	representation elections, employers knowing the right way and
	employees knowing the right way to deal with? What are some of
	those challenges?
	Mr. Larkin. Well, I can only speak for myself and not any
	employer, but the vast majority of my clients don't enter into
	a particular business proposition, whether it's a franchisor/
	franchisee proposition, a contractor/subcontractor proposition
	to avoid unionization. They enter into the business proposition
	because they think it's good business.
	And so I think the problem with the joint employer
	standard, Ms. Aloul has so eloquently articulated it, is that
	the uncertainty in the standard as to whether it's going to
	apply to you or not, based on the facts of your case, has
	caused many of these business models to be threatened, because
	as she just said, she doesn't know the answer with the retained
	and the indirect control elements.
	And, you know, I will add that, you know, when I advised my
	clients under the old standard, it was fairly straightforward.
	If you exercised direct or immediate control over your business
	partner, whatever the partnership might be, you're probably
	going to be a joint employer. And so it was relatively
	predictable for the business to set up whether they wanted to
	be one or not.
	Under this new standard, there is no predictability to the
	standard, and it's much more difficult, and just you're sort of
	crystal-balling what the answer is going to be. I certainly
	don't like to do that as a lawyer, tell the client I don't know
	the answer, but unfortunately, that's the answer that we give
	more often than not.
	If I could, I'd like to just--
	Chairman Walberg. My time has expired, and we may get back
	to that.
	I now recognize the gentleman from New Jersey, Mr.
	Norcross, a fellow Harley rider.
	Mr. Norcross. Absolutely. Chairman, congratulations. It's
	good to be here, and certainly to hear some of the testimony
	today. And it seems like I'm in an alternative universe.
	The NLRB changes that I want to focus on have to do more
	with the election. We're in much more modern times than we were
	a quarter century ago, instant news. I guess President Trump
	really showed that things happen at a very quick pace. And the
	election rules from everything that we've heard are not
	burdensome, are, quite frankly, easier to deal with.
	And, so, as I try to develop a question, that's why I think
	I'm in a different universe. I want to read you some
	statistics. Since the second term with Bush, the percentage of
	unionized employees in this country went down 1 year, went up
	the next two years, and remained stagnant for the following
	year. Every year since the Obama administration, with the rules
	that you're condemning, union percentage went down.
	Let me repeat that: Union percentage went down, even though
	you're saying these rules are absolutely against the employer.
	The one thing I do understand, it's a partnership, that we work
	together. Some of the comments I hear really concern me because
	most people understand that, with very few exceptions, that
	they just want to have a voice.
	And I guess what we're having a discussion today is, are
	you going to let your employees have a voice? Are you going to
	share, in some small measure, the profits that company was able
	to earn because of both management and labor?
	We're having a discussion here, how this controversy--and
	we're always going head to head. The percentages aren't lying.
	The election rule that you spoke about, the ambush election,
	it's horrible one side, but you mentioned that when you
	decertify, you want the rules to change. So it can't be both
	ways.
	So I guess my question comes down to, when we look over the
	course of the last 25 years with the changes and the downward
	trend of unionization, number one, we had some really good
	lawyers on the other side who know how to stretch it out,
	because it's not just about getting the election won; it's
	actually getting a contract. The election is very short.
	The fact of the matter is, you talked about the supervisor.
	It's called a provisional ballot. It's what we do every day,
	every November. If you're not sure if you're going to vote or
	not, you vote, and it goes into a special. The provision is set
	up for there.
	So Ms. Davis, we spend a lot of time with folks who want to
	have a voice and just have a chance to take care of their
	family. We've seen the disparity in wages over that very same
	time that--the decline of unionization, the disparity between
	those who make the most and the least grows wider. What's the
	number one issue you hear from those who want to join a union
	with all these rules?
	Ms. Davis. Well, let me bifurcate your question and tell
	you, first of all, I share your frustration about living in an
	alternate universe. I think the one thing I hope everybody in
	this room can agree on is that facts matter, actual facts. And
	the facts, as you said, show a declining union density,
	notwithstanding the rules.
	The panoply of things that employers can do legally under
	the act to prevent a union, one-on-one meetings with employees,
	captive audience meetings with employees, a constant barrage
	from the day someone is hired precluding them, telling them
	it's bad for them to join a union, those are all still there.
	They can completely avail themselves of that arsenal.
	Nothing was taken away in the election rules. The only
	thing that was taken away in the election rules was the
	preexisting universe where any employer that wanted to delay an
	election from taking place could do it.
	Mr. Norcross. And that, quite frankly, was the strategy?
	Ms. Davis. Correct.
	Mr. Norcross. Delay, delay, delay.
	Ms. Davis. Correct, correct. I've sat in 3-month hearings
	on supervisory status, where at the end of the day, the union
	was worn down. All these rules were intended to do was to allow
	the employees, in the months that the employer has the
	opportunity still to campaign against them, to decide on their
	own whether they wanted a collective voice in the workplace.
	Mr. Norcross. My time is about to run up. In the year since
	the rule went into effect, unionization went down again. So I
	think, instead of trying to divide folks, we should be focused
	on how we can work together, so not only the employer makes a
	healthy profit, but the employees share in that and we both
	win.
	I yield back the balance of my time.
	Chairman Walberg. I thank the gentleman. His time is
	expired.
	I now recognize the gentleman from Tennessee, Dr. Roe.
	Mr. Roe. Thank you very much.
	Mr. Larkin made the comment to begin with that he felt like
	the NLRB, as I do, should be a fair arbiter of the facts. And I
	played some basketball along the way. When the ball bounced off
	the other guy, I expected my team to get the ball. What's
	happening is when the ball bounces off the other guy, the other
	team is getting the ball.
	I am a small business owner and, Ms. Aloul, you pointed out
	very clearly the uncertainty that creates issues and problems.
	And what Ms. Davis mentioned was, we'll let this litigate and
	play out. We don't have, in my business, a legal department,
	and we don't have hundreds of thousands of dollars and millions
	of dollars to litigate these things. Maybe big businesses do,
	but small businesses don't.
	I think that one of the reasons that President Trump got
	elected was he spoke to people in the country who wanted to get
	this economy going and get jobs started. And I look at the last
	30 years. And the recession of 1992 to 1996 during President
	Clinton, that recovery from that election, 420,000 new
	businesses were formed. And between 2002 and 2006, President
	Bush, there was a recession prior to that, 400,000 businesses
	were formed. Between 2010 and 2014, 167,000 businesses were
	formed in this country.
	That's millions of jobs that never got formed. And what's
	even worse, in rural America where I live, 20 counties out of
	3,000 accounted for half the new business formation in this
	country. And what we have to do is let entrepreneurs and
	businesspeople form. And this uncertainty, Ms. Aloul, as you
	pointed out, is part of it.
	Mr. Larkin, I want to have you to explain to me, what is
	the advantage, why did we go to an ambush, so-called ambush
	election and reduce the time for unionization? And I grew up in
	a union household. Full disclosure. What was the point of that?
	That was a solution looking for a problem.
	Mr. Larkin. I agree with that sentiment. Let me start by
	saying this: The declining overall rate of unionization in the
	United States, in my opinion, has nothing to do with the
	representation case rules. And I'm not here to give you an
	editorial on why that number is what it is.
	What I can tell you is that the win rate in representation
	cases that take place for unions has been above 60 percent, and
	in some cases, in this past year, it's 70 percent. So, as you
	say, sir, changing those rules was a solution looking for a
	problem. The rules were working fine for unions. So that's that
	point.
	The other point that I would make is, you asked why were
	these rules passed? Well, one of the Board members who was
	seated on the Board when these rules were originally being
	conceived had written prior to becoming a Board member about
	how, in his view, employers should have no right to communicate
	with their employees about unionization.
	There is a part of the National Labor Relations Act,
	section 8(c), that gives employers a free speech right to
	communicate with their employees. And so things like one-on-one
	meetings and captive audience meetings, that's called free
	speech. At least one of the members behind passing these rules
	doesn't believe that employers should have free speech. And one
	of the things that the rules do is it severely impinges on the
	time within which an employer can communicate with his
	employees about unionization.
	So if you ask me, that's one of the reasons, at least, why
	the rules were passed, to clamp down on the opportunity for
	employers to communicate with their employees about the union
	question.
	Mr. Roe. I know that in my business, it would be hard for
	me to find a qualified labor lawyer like yourself in that
	length of time to educate myself. And you point out, you might
	be breaking a law you didn't even know you were breaking if you
	can't identify who it is. And you wouldn't do it on purpose,
	but you did break the law.
	Mr. Larkin, prior to the ambush rule, in your experience,
	what was the average time between a petition and representation
	election, how long?
	Mr. Larkin. The median time was about 38 days, and it's
	dropped somewhere around 22 to 23. So that's a pretty
	precipitous drop in a year and a half.
	Mr. Roe. And so, what is the advantage of that? In other
	words, where I don't have time to educate myself, my employees
	don't have time to educate themselves, who benefits from that
	less education? Less knowledge about what you're doing?
	Mr. Larkin. I can tell you who does not benefit from that
	is the workforce and the employees who are the ones making the
	vote. And this is not, in any way, a judgment on the, you know,
	pros or cons of unionization at all. This is just asking for a
	fair playing field. Unions can organize employees in secret,
	and the employer may have no idea that a union is communicating
	with its employees about the pros of unionization. So it never
	has an opportunity to talk about its position and whether it
	thinks that there are other parts of the argument that
	employees should consider.
	That's the problem with these rules. It even further
	shrinks that opportunity for an employer to have that
	communication.
	Mr. Roe. I yield back, Mr. Chairman.
	Chairman Walberg. I thank the gentleman.
	I now recognize the gentleman from Connecticut, Mr.
	Courtney.
	Mr. Courtney. Thank you, Mr. Walberg.
	And at the outset, first of all, I heard my good friend,
	Dr. Roe, mention the basketball analogy. I have to mention that
	the UConn women won their 100th straight victory last night.
	Mr. Roe. I yield.
	Mr. Courtney. And coming from Tennessee, that is quite, you
	know, impressive.
	Mr. Wilson of South Carolina. Mr. Chairman, the Gamecocks
	join in congratulations, Lady Gamecocks.
	Chairman Walberg. That's bipartisanship. We appreciate it.
	Mr. Courtney. So, as long as we're on the subject of a
	solution in search of a problem, in January, just a few days
	ago, the Bureau of Labor Statistics, again, gave their most
	recent report on the percentage of unionized employees in the
	American economy. Once again, it continued on a downward trend,
	significant downward trend. The total number is 10.6 percent,
	and in the private sector it's 6.4 percent. That has been a
	steady trajectory all the way since 2008.
	And, again, Mr. Walberg is a good friend, but the narrative
	that started this hearing, which is that somehow these union
	rules, unionization rules are somehow acting as a drag on the
	U.S. economy. I mean, at some point, people have to sort of
	come up with empirical, you know, economic data that actually
	demonstrates that there's some spike that these rules have
	created that somehow would impact hiring decisions. But, in
	fact, what we're seeing is a steady decline. And, really, at
	some point, you have to look at this from a macro standpoint to
	justify the Congress going in and trying to, again, somehow, as
	I said, find a solution in search of a problem.
	The Specialty Healthcare rule, which, again, we've had a
	number of hearings already in the last few years on this, is
	another example of where, you know, we need to get data to sort
	of understand whether or not the micro bargaining units is
	really causing some kind of, you know, outcome here where we're
	seeing a proliferation of small bargaining units.
	Ms. Davis, your testimony actually had some data on that,
	and I was wondering if you could just sort of walk through what
	we're actually seeing in the wake of that 2011 decision?
	Ms. Davis. Certainly. The statistics are kept by the NLRB.
	They're available on its website. And there's a study from
	fiscal year 2007 through fiscal year 2016. The median
	bargaining unit has bounced between 26, 25, 27. It is currently
	26.
	So, there is--again, I mean, I would urge everybody to look
	at facts, real facts. There is absolutely no data whatsoever
	that supports the notion that there is a proliferation of
	microunits.
	In the recent Volkswagen decision that has, again, caused
	such hysteria, the unit that was organized was over 150
	employees. That is more than seven times the size of the
	average unit. So I would suggest, again, that we need to look
	at facts and not just look at anticipatory anxiety of what
	might happen.
	Mr. Courtney. And that unit actually had a common purpose,
	which was a maintenance unit. I mean, they had a specific
	function that created a logic to the appropriate recognition by
	the NLRB. Is that correct?
	Ms. Davis. That is absolutely correct. And for the past 50
	years, the NLRB, before these rules, before Specialty, has
	treated skilled units, such as maintenance units, as
	presumptively appropriate. So all it was doing is following the
	rules that it followed for decades in that.
	Mr. Courtney. In my district in Groton, Connecticut, where
	we have Electric Boat Shipyard, which has about 4,000 shipyard
	workers that are on the waterfront, again, they have metal
	trades units, carpenters, electricians, Teamsters, machinists.
	Again, they come together with the Metal Trades Council in
	terms of collective bargaining.
	But, again, there are specific reasons why they--and this
	goes back to the '30s, in terms of when those units were
	recognized. There is nothing inherently obstructionist or, you
	know, negative about the fact that you recognize that there are
	skills that really create a logic for separate units. Isn't
	that correct?
	Ms. Davis. That is totally correct. And if I may, on your
	larger point where you started, which I think was the point to
	start, if you look at every period since 1960, when union
	density has increased, wage stagnation has decreased. When
	union density has declined, income inequality has increased.
	So if you're looking at what's good for this country,
	what's good for Americans, there is no doubt that unionization
	has brought up wages, has increased people having pensions. If
	you do a comparison between right-to-work States--Mr.
	LaJeunesse talked about the right-to-work statute--and
	nonright-to-work States, wages are, on average, $6,000 per
	worker higher in nonright-to-work States; they have health care
	75 percent of the time; they have pension more of the time. And
	if we're talking about what is good for that country, it seems
	to me to be something very basic that we all should be able to
	agree to.
	Mr. Courtney. Thank you.
	Mr. Chairman, I would like to enter the Bureau of Labor
	Statistics report from January 26, 2017, with the data that I
	just mentioned.
	Chairman Walberg. Without objection, it will be entered,
	hearing no objection.
	[The information follows:]

	[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



	Mr. Courtney. I yield back.
	Chairman Walberg. I thank the gentleman.
	And now I recognize the gentleman just joining our
	subcommittee from Minnesota, Mr. Lewis. Welcome.
	Mr. Lewis. Thank you, Mr. Chairman, and thank you to all of
	the witnesses here today.
	Certainly, data and facts do matter. And I think if we look
	in a somewhat objective way over the last few years of the
	NLRB, what we see is an activism that's got a lot of people a
	little bit concerned. I certainly support collective
	bargaining, especially in the private sector. I certainly
	support the rights of people to organize.
	But if you take a look at what's happened with a joint
	employer standard, where you're trying to get someone, a
	franchisor who is not responsible for payroll to be part of a
	collective bargaining unit strikes a lot of people as a
	stretch. If you look at the microunions, when you could take it
	to the extreme, and one person is going to be a union now in
	order to organize. If you take a look at the free speech
	concerns on these ambush election rules. If you take a look at
	a company, a large airline manufacturer relocating a plant, and
	all of a sudden, that's an unfair labor practice.
	And finally, of course, the reason that this activism I
	suppose on our side of the aisle, anyway, is concerting, or
	disconcerting, is it had to be done, or it was tried to be done
	through the recess appointments, which the Court had to
	intervene on.
	So I think if you look at the data and the facts, it's
	pretty clear there has been something going on at the Board.
	And I would ask Mr. Larkin to, perhaps, comment on what might
	be the ultimate, you know, if you want to call it activism or
	ultimate end game here, and that is, the end of the secret
	ballot, card check, a card check for everyone.
	It's very concerning to me, because that is at the essence
	of not only our constitutional governance; but philosophically,
	the idea of the absence of coercion in any form of election is
	key, is it not?
	Mr. Larkin. Yes. And prior Congresses tried and failed to
	amend the National Labor Relations Act to remove the secret
	ballot.
	Another thing I suppose that I could add to that comment on
	card check is, you know, if you look at the joint employer
	standard, in addition to all of the uncertainty and confusion
	and chaos it's caused businesses like Ms. Aloul's, based on the
	legal standard itself, you know, there's more going on beneath
	the surface of that whole debate.
	The new joint employer standard, in my view, has nothing to
	do with the facts of that case or joint employer in the
	temporary staffing industry. It is about a need for a change in
	the law on the side of organized labor to unionize from the top
	down in the franchising industry.
	You know, we've all seen Fight for 15. And I'm not here to
	pass judgment on whether workers deserve $15 an hour. But
	what's beneath the surface of that movement is an effort to
	organize in retail and fast food. It's illegal under the
	National Labor Relations Act.
	Mr. Lewis. Thank you.
	Mr. LaJeunesse, you mentioned back in the private sector,
	of course, Hudson in the public sector, with regard to First
	Amendment rights. And I want to elaborate or get your take on
	that.
	In Minnesota, we've got personal care assistants who are
	having dues taken out of their paycheck, and sometimes they're
	not aware of it. It's certainly been a card check-type method
	of organizing there in some of these home healthcare workers
	and that sort of thing, notwithstanding Quinn.
	But if you look back in Hudson, could you elaborate a
	little bit on getting around that First Amendment protection
	with agency fees and what those levels are and what they should
	be?
	Mr. LaJeunesse. I'm not sure I understand your question.
	Mr. Lewis. Well, for instance, in my home State, you don't
	have to join the union, obviously. You have a right to join or
	not join in many cases, but you do have to pay for agency
	costs, collective bargaining costs.
	The problem becomes when those collective bargaining costs
	become so exorbitant, being 60, 70, 80 percent of the dues, why
	not join?
	Mr. LaJeunesse. Well, that's the incentive that employees
	have. The problem, of course, is who determines what percentage
	is chargeable to the objecting nonmember. It's the union. And
	the records are very complex. And the Board has done a lousy
	job in protecting the rights of private sector employees who
	object to the use of their forced fees for political and other
	nonbargaining purposes, as I pointed out in my testimony.
	And the solution to that, I see, is the passage of a
	national right-to-work law sponsored by your colleague, Mr.
	Wilson from South Carolina, which would take that matter out of
	the hands of the Board and put it in the hands of the
	individual employee, who could decide whether he wants to
	voluntarily join the union or not.
	Mr. Lewis. I thank you for your testimony, as I do all the
	witnesses.
	I yield back. Thank you.
	Chairman Walberg. I thank the gentleman.
	I now recognize for 5 minutes of questioning the gentlelady
	from Oregon, Ms. Bonamici.
	Ms. Bonamici. Thank you, Mr. Chairman.
	And thank you to all the witnesses.
	Ms. Aloul, thank you for being here. I really appreciate
	the important services that you provide through your franchise.
	I'm familiar with the work of home care workers, both in
	Oregon, and it's really valuable services that they're
	providing.
	And just so you know, when I was in private practice of
	law, I represented several franchisees. And, so, I am very
	familiar with what a franchise agreement looks like. And I
	listened very carefully to your description of your work and
	what your franchise does and doesn't do. And it sounds to me
	like you are in a franchise that's much more like the Freshii
	case, where the franchisor is basically ensuring a standardized
	product and customer experience and, as you said, the
	technology platform, and not at all in a situation where your
	franchisor is really directing your employees, or how you
	handle your employees or your scheduling. And I hope you are
	familiar with the Freshii franchise case and the situation.
	And I also hope that--I know you mentioned uncertainty. And
	it seems--I don't want to give you something else to worry
	about, but with home care work and the important work that you
	do taking care of seniors and people with disabilities, it
	seems like you would have a lot of uncertainty about, for
	example, what's going to happen with Social Security and
	Medicare and Medicaid in this administration and this Congress,
	and what might happen with the tax code, and lots of other
	things that might affect the people you take care of.
	So, not to give you something else to worry about, but I
	think that your franchise and this possibility, remote
	possibility that something like this might affect your work is
	not something that you should be concerned about. That's not
	legal advice.
	But, Ms. Davis, I wanted to ask you: Mr. Larkin described
	the--he said this is a controversial new test. And I'm sure
	you're familiar with--Browning-Ferris wasn't even about
	franchises. And this McDonald's case, I mean, I actually have
	some of the transcript, and H.R. director was actually
	assisting stores and talking to their employees, talking to
	them about minimum wage, identifying potential activity,
	talking to them about changing their store procedures and even
	said, quote, ``this is a partnership between McDonald's and the
	franchisee that requires 100 percent support.''
	So I know Mr. Larkin said it's a controversial new test and
	many business models are threatened. It doesn't seem like that
	to me.
	Would you respond to that? Then I want to ask you another
	question.
	Ms. Davis. Thank you very much. I completely agree with
	you. And I share your desire to tell Ms. Aloul that, as she
	described her franchise, where she employs, places, trains,
	promotes everyone, the franchisor gets involved in nothing; and
	you compare that with the BFI facts, where the franchisor
	capped wages, set schedules for overtime, set schedules for the
	production line, set safety schedules, met every day with the
	supervisors and told them what to do, take that, combine the
	fact that in a footnote in BFI, they indicated that they were
	not taking a position on the franchisor-franchisee
	relationship. Fold in Freshii's, which I'm going to provide you
	a copy afterwards, because I think it will give you some
	comfort, where there was completely the same level of
	disengagement by the franchisor in the employment practices of
	the franchisee, and the general counsel felt there was no basis
	for a complaint.
	So I think, in light of all those factors, there really is
	no concern that deserves a radical change in the law. The law
	for 50 years has had the common law test. That's what the Board
	embraced here. That's what Taft-Hartley instructed the Board to
	apply.
	And finally, with respect to the insecurity of what is
	going to happen with respect to reserved control, the Board
	made very clear in BFI that is ``reserved contractual
	control''.
	Ms. Bonamici. I want to get in my last minute. The Murphy
	Oil cases, I'm really concerned about the individual
	arbitration rights. And I know the circuits are split.
	So what would be the implications of broadly limiting
	workers' collective action rights in a forum such as, like, a
	condition of employment to enter into one of these forced
	arbitration clauses?
	Ms. Davis. Thank you. Yes. Well, the Supreme Court is going
	to soon let us know--I believe this October the case is going
	to be heard--whether Murphy Oil is going to live or die. I
	firmly believe that, based on two essential forks of Supreme
	Court precedent: One is that workers have a right collectively
	to join together and file a lawsuit over their terms and
	conditions of employment; and secondly, you can't condition
	workers' employment on them giving up their statutory rights;
	and thirdly, given the collective rights that the statute
	protects, I think it is a well-reasoned decision that I hope
	will hold. We won't know that for a couple of months.
	Ms. Bonamici. What would be the implication to workers,
	though, if--
	Ms. Davis. I think workers will be, as I believe the
	statistic is over 65 percent of the employers require employees
	to sign these agreements, in which cases, they will not have
	the right and will not be able to afford individually, in most
	cases, to pursue these claims on their own.
	Ms. Bonamici. Thank you. My time is expired.
	I yield back. Thank you, Mr. Chairman.
	Chairman Walberg. I thank the gentlelady.
	And now I recognize the gentleman from the thumb of the
	great State of Michigan, Mr. Mitchell.
	Mr. Mitchell. Thank you, Mr. Chairman.
	I grew up in a union household. Dad built trucks in the
	line for General Motors. I worked both in a union environment
	at Chrysler Corporation and at a company that was a nonunion
	company. So I think my colleagues on this side of the aisle are
	correct. This hearing and the purpose of this committee is, in
	fact, to get back to what is the core mission of the NLRB. In
	my opinion, it's about the worker and the employer, not
	protecting union leadership and union organizations' needs,
	which it has evolved to in the last 8 years.
	Union membership, private-sector union membership has gone
	down. It's gone down to about 6.4 percent of the private-sector
	employees now in a union.
	And my interpretation, Mr. Larkin, is that an awful lot of
	these rules have been developed in one last gasp for private
	unions to hold onto some shred of being something beyond a
	public union environment. Do you have an opinion on that, sir?
	Mr. Larkin. Well, it's fairly clear to me that the rules
	were passed to facilitate union success in organizing
	campaigns. And going back to the ``if it ain't broke, don't fix
	it'' thought, unions were already winning 60 to 65 percent of
	representation cases. So there was no need to improve that
	system.
	One point that I'd really like to make, if I could, because
	I think it's gone on long enough here today, we've talked about
	this Freshii memo.
	Mr. Mitchell. I was going to ask you about that, yes.
	Mr. Larkin. And, you know, Freshii is a general counsel
	advice memorandum. It's not an administrative law judge
	decision. It is certainly not a decision of the full NLRB.
	Advice memoranda have no precedential value whatsoever. So
	that's number one.
	Number two is that it was issued before Browning-Ferris
	came out.
	And number three is that if that opinion in Freshii was
	truly what the general counsel believed, then I would question
	why the McDonald's case is still going on. The Freshii logic
	certainly hasn't caused Mr. Griffin to discontinue his pursuit
	of McDonald's and all of its franchisees, who I'm certain take
	no comfort in the Freshii memo.
	Mr. Mitchell. Ms. Aloul, I have a question for you, please.
	Ms. Davis has referenced multiple times anxiety, you know,
	don't let anxiety bother you. It shouldn't be a concern. It
	will all work itself out.
	What does anxiety do for you and your business when you're
	looking to hire, expand? What does that do for you?
	Ms. Aloul. Thank you for your question, Congressman. Every
	hour I spend not working on my business is an hour I'm spending
	on regulatory issues. That does provoke anxiety. It slows my
	hiring. It slows my ability to serve customers. It slows my
	ability to run a much more efficient business. In a small
	business, I am the most expensive resource in that business. So
	every hour I spend talking to you about that is a pleasure of
	mine, obviously, but is an hour I'm not spending on my
	business, sir.
	Nobody in this room, nobody at all, is able to safely
	assure me that a standard based on indirect, reserved,
	unexercised, direct, indirect, what have you, control is never
	going to get me. You can't assure me that. I wish you can, but
	you cannot. And that is anxiety-provoking, sir, and it affects
	my ability to run a business. I'm not the only one. I know you
	know the numbers. Everybody likes statistics.
	My background is in economics, and I'd love to share a few
	numbers with you as well. There are 7.6 million employees in
	the United States under a franchise agreement one way or
	another. It generates over 700, or around $700 billion of
	economic activities. That's 2-1/2 percent of our GDP.
	It's 700,000 businesses like mine that are telling you this
	is affecting my ability to run my business. This has to be
	heard. You can't just assume leave it alone, it will run away,
	it will go away on its own. It won't.
	Mr. Mitchell. Thank you. Thank you.
	I'll close with this, Ms. Davis. It's not code. There's no
	code, in my opinion, what we're doing here in the committee.
	It's critical to go back to the worker and employer
	relationship, not simply protect the union hierarchy. And
	anxiety kills jobs. It kills jobs in this country. And I work
	hard in this committee to ensure that we fix that problem now
	and going forward.
	Thank you. I yield back.
	Chairman Walberg. I thank the gentleman.
	I recognize the gentlelady from New Hampshire, a fellow
	2006 classmate of mine. Welcome to the committee.
	Ms. Shea-Porter. Thank you. It's good to be back here. I
	spent four years on this committee, and I certainly heard a lot
	of the debate, and it's interesting to me that this has ramped
	up again. And I'm sorry that it is, because I might be--and
	forgive me if some of you also had this experience--but I might
	be the only person here on this committee who actually worked
	in a nonunion factory when I was putting myself through
	college, and watched what would happen, because they were
	trying to unionize at the time, and I saw some pretty awful
	things to prevent that.
	And I know that none of you would agree with this, but I
	saw things such as a woman who fainted on the line. She was
	pregnant. And the foreman came over and said to her, you know,
	to go to the nurse's office and on the way pick up your check,
	you're done. And that, we must remember, still happens. It
	happened then; it happens now.
	So as we talk about this, we need to remember that we're
	talking about people. We're talking about workers. We're
	talking about a lot of workers who are earning a wage that none
	of us would accept. We're talking about a minimum wage, which
	is impossible to live on. And then we're talking about that,
	too.
	So while we're here and we're airing all of this, I ask
	people on this committee to remember that we have real people's
	lives at stake here. And I heard your testimony on your small
	business. And my mother was a small business owner. I do
	recognize and understand the challenges there as well. But we
	are talking about people who don't have opportunity and don't
	have people to defend them in these settings and nowhere to go,
	and you can't feel safe because you could lose your job. And
	ultimately, I hope that that's what we think about, those
	workers.
	So, Ms. Davis, my question to you is, we're having a bitter
	fight in New Hampshire about right-to-work laws, and
	Republicans and Democrats are working together to try to
	protect unions in New Hampshire. Are workers' wages and
	benefits better or worse in States that have right-to-work
	laws?
	Ms. Davis. So there's a lot of statistics on this. In
	right-to-work States, the workers make, on average, $6,000 less
	than in nonright-to-work States, which is about 12 percent per
	worker. So it's a significant difference. And then when you add
	on the pension statistics, where 75 percent of the workers in
	right-to-work States have no pension as compared to 15 percent
	in nonright-to-work States. Health care, 80 percent versus 50
	percent.
	And to address one of the issues you addressed initially,
	which is health and safety, the fatalities in right-to-work
	States are 50 percent higher than in nonright-to-work States.
	We are now, in New York City, seeing in nonunion construction
	jobs, the fatalities so high that legislation is being
	considered as compared to unionized jobs.
	So I think that collectively as a fabric, there's an
	enormous difference in terms of the issue you raised, worker
	well-being, worker safety, worker health.
	Ms. Shea-Porter. Okay. And then the other question is, what
	is the impact of right-to-work laws on job creation? Because I
	know the debate, and I know there are statistics, but I'd like
	you to assure them that if you are in a State that has right-
	to-work laws versus--there's going to be a difference in job
	creation.
	So would you address that, please?
	Ms. Davis. Right. I think the statistics are unassailable
	that the job creation in right-to-work States is not at all
	better than in nonright-to-work States. We have a serious
	problem in this country, whether it's globalization, whether
	it's technology increasing, that there are fundamentally not
	the same kinds of good middle-class jobs that existed 50 years
	ago.
	But, as we learned when trickle-down economics failed, the
	solution to that is not to bust unions. The solution to that is
	to try to, as the statute itself was designed to do, create a
	strong economy, build a middle class as a result of employees
	having the choice to join a union.
	Ms. Shea-Porter. Then I have one last thing. Is there
	anything--I've got about 45 seconds--any last thought you would
	like to share that we didn't ask you yet, but you want us to
	know?
	Ms. Davis. Well, that's a tough one. I think there's a
	fundamental question of what the role of Congress is and what
	the role of the Board is. And if we look back at the statute
	itself, Congress intended this act to be administered by an
	agency that had expertise. It envisioned that it would change
	as administrations changed, and its terms were staggered.
	So I think we need to let this process run. We need to let
	the Board do what it is supposed to do, which is set labor
	policy, and let Congress do the important things that it's
	supposed to do.
	The one final thing I wanted to say about the right-to-work
	law is that we hear a lot from the Republicans about giving
	control to the States. And that's what Congress did in the
	NLRA; it gave right-to-work decisions to the States. I think it
	is wrongheaded to now take that away.
	Ms. Shea-Porter. Thank you. And thank you to all the
	panelists for being here today.
	And I yield back.
	Chairman Walberg. I thank the gentlelady.
	And now I recognize the gentleman from Georgia, Mr.
	Ferguson.
	Mr. Ferguson. Thank you, Mr. Chairman.
	Ms. Davis, I believe I heard you open with a statement that
	the changes to the NLRB were modest.
	Ms. Davis. If you're talking about the election rule
	changes, that is correct.
	Mr. Ferguson. Okay, thank you.
	Ms. Aloul, I want to thank you for your testimony as well.
	Mr. Mitchell from Michigan touched on a couple of things there
	about anxiety and what you think about on a daily basis there.
	And I am certainly empathetic to your position. I have run a
	small business in my district for 25 years, and certainly
	understand the uncertainty that occurs when small businesses
	are faced with those real challenges. I don't think it's
	appropriate for members of this committee to tell you what you
	should be worried about. You experience it absolutely every
	single day. So I will try to avoid doing that as well.
	So, Mr. Larkin, the question I have for you, do you mind
	briefly describing the changes in the Taft-Hartley law
	regarding how the employer-employee relationship is defined,
	and what the Congressional intent was of that law, of those
	changes?
	Mr. Larkin. Sure. If you're referring specifically to
	Specialty Healthcare, I can read you from the original Wagner
	Act that Senator Biddle, when the debate was about who should
	have the power to decide what is the appropriate bargaining
	unit, said that: ``To lodge the power of determining this
	question with the employer would invite unlimited abuse and
	gerrymandering the units. But if the employees themselves could
	make the decision without proper consideration of the elements
	which should constitute the appropriate units, they could, in
	any given instance, defeat the practical significance of
	majority rule; and, by breaking off into small groups, could
	make it impossible for the employer to run his plant.'' That's
	from the original Wagner Act.
	And in 1947, when they passed the Taft-Hartley amendments
	to the act, the legislative history states that the
	prescription in Section 9(c)(5) that says that the extent of
	union organization cannot control the outcome of a bargaining
	unit determination, that was passed to strike at the practice
	of the Board by which it set up as units appropriate for
	bargaining, whatever group or groups the petitioning union has
	organized at the time.
	That's the history of the National Labor Relations Act, and
	that's what, in my view, the Specialty Healthcare rule simply
	departs from.
	Mr. Ferguson. So, Mr. Larkin, when there's that large a
	departure, would you say that the NLRB directly subverted the
	legislative process in making its new rules?
	Mr. Larkin. Well, an argument that employers have made, and
	that I've certainly made in cases involving Specialty
	Healthcare challenges, is that the Board did go beyond its
	statutory mandate and that the rule, as it is written, violates
	what I just read you.
	Mr. Ferguson. So any time that you have an administrative
	body of people that were either appointed or hired making major
	changes to the rules--I certainly wouldn't call those changes
	modest. Would you?
	Mr. Larkin. No.
	Mr. Ferguson. Thank you, sir.
	Mr. LaJeunesse, if you could, I want to give you an
	opportunity to respond very quickly to some of the comments
	regarding right-to-work States versus union States. You know,
	I'm from Georgia. It's a right-to-work State. We have seen
	tremendous job growth. If you could give me your thoughts on
	that, but also on how the, you know--and, again, I'm not trying
	to argue for unions or against unions, but just, could you give
	some background and some facts to that and give us your
	perspective on it?
	Mr. LaJeunesse. Sure. I'm a lawyer, not an economist or a
	statistician, so I'm not an expert on some of the subjects with
	numbers. You can find statistics to prove anything. But if you
	look at statistics adjusting wages for cost of living, wages
	are higher in right-to-work States, not lower.
	The suggestion that a law which allows an individual worker
	to decide voluntarily whether to financially support a union or
	not causes higher rates of fatalities, that's ridiculous.
	I think the short answer to the issue of statistics is go
	to the website of the National Institute of Labor Relations
	Research, which collects the studies on this subject, which
	rebuts all of the arguments that Ms. Davis has made.
	Mr. Ferguson. Thank you.
	Mr. Chairman, I yield back.
	Chairman Walberg. I thank the gentleman.
	I recognize the gentlelady from the great State of Ohio,
	Ms. Fudge.
	Ms. Fudge. Thank you so much, Mr. Chairman and Mr. Sablan.
	Thank you all for being here today. I've been on this
	committee for almost 10 years. This is the 25th hearing and/or
	markup we have had on this same exact subject. I'm happy that
	all of you agree that we should have a full complement of
	members on the NLRB. President Barack Obama tried to do that,
	and my colleagues on the other side of the aisle blocked him.
	So I'm happy that you think that was a good thing.
	This really is, to be honest, nothing more than a continued
	attack on unions. It is an attempt to eviscerate all worker
	rights and to give all rights and all power to employers. In a
	few minutes, we'll look around and somebody will be saying that
	we should do away with the minimum wage. Let's just pay people
	what the market can bear. They'll say, we should have no more
	paid leave, whether it be sick leave, vacation, whatever,
	things that have been gained through unions.
	It's interesting that we continue to just go around and
	around and around about this. I just want us to understand
	what's happening here. This is not something new. This is
	something that has been a part of this committee's agenda for a
	long time. I wish they would just come out and say it.
	Ms. Davis, the gentleman sitting next to you said that you
	can find statistics on anything. Sir, I would hope that you'd
	send me whatever those statistics are that you have.
	Ms. Davis, we have been talking about right-to-work States.
	Just tell me, again, how you know for a fact that right-to-work
	States do not protect employers, do not make their lives
	better, do not protect them in any way, really. The floor is
	yours, Ms. Davis.
	Ms. Davis. Thank you very much. And I do want to
	distinguish, to the gentleman on my physical left, that there
	is a difference between opinion--and I have expressed opinion
	at times--and statistics and facts, which I have also given
	you. I have a pile of papers here; I am happy to provide them.
	The statistics on income, pension, health, safety in right-
	to-work States is data; it is not opinion. So I think that
	whether or not--it is a philosophical question whether or not
	you want to make it harder for employees to choose to have a
	union in their workplace. But there is no question whatever in
	States that make it virtually impossible or extremely
	difficult, which is right-to-work States, the data on employee
	well-being, health, safety, wages is unassailable.
	Ms. Fudge. And you talked about the fact that income
	inequality is at an all-time high. And I am assuming--and you
	can correct me if I'm wrong--that it is high because union
	membership is declining.
	Ms. Davis. That is correct. And there are visual--and I
	actually think the government puts these out. There are visual
	graphs that you can see that tracks union density from 1963 to
	the present and tracks income during that period. And there's
	an absolute congruity between union density creating higher
	wages, and union decline, which we have had essentially since
	the early '80s and the air traffic controllers debacle, leading
	to declined wages.
	There is no question that when employees have a collective
	voice in their workplace and they are not subject to being
	fired at whim, they are able to negotiate better terms and
	conditions that at the end of the day help everyone.
	Ms. Fudge. Thank you. And since our job really is to
	oversee the Labor Relations Act and not to tell the Board how
	to conduct themselves, is there anything that you think we can
	do on our side to make the act better?
	Ms. Davis. Well, we had that aspiration in the '90s and
	that didn't work out. So I think at this point, given the
	political realities, that there is nothing that can be done to
	amend the act.
	I actually did testify here during the recess appointment
	issue. The Supreme Court disagreed with my view that it was
	constitutional, but I think there is no question that the
	President was blocked in putting people on the Board and
	letting the agency do its work. And a lot of the partisanship
	that we've seen have directly been attributable to the
	partisanship in the Senate that has prevented the Board
	appointees from doing their work.
	So I think that allowing the Board to function, even in
	this new administration, it's not going to be something that
	I'm going to believe in the most part, but I think we need to
	let the agency do its work, as it has done for 80 years.
	Ms. Fudge. Thank you very, very much. I thank you all.
	Mr. Chairman, I yield back.
	Chairman Walberg. I thank the gentlelady.
	Now I recognize the gentleman from Georgia, Mr. Allen.
	Mr. Allen. Thank you, Mr. Chairman.
	And, you know, for the last two years--well, 2-1/2 years
	ago, I was out in the working world and as a small business
	owner. And the last two years, I've heard all the arguments one
	way or the other about a lot of this rulemaking.
	And, frankly, being in a relationship with my employers,
	some of these things really were disturbing to me, because it
	seemed like it was pitting the employer against the employee.
	And, you know, we just don't have that relationship in our
	company.
	And, real quickly, a story of that is a young man that's
	been with our company for 40 years, and he was the second
	person I hired. And his sister needed a kidney transplant and
	he was a match, and he was going to be out of work for six
	weeks. And we paid him the entire time that he was out of work.
	And I think if he had belonged to the union, he would not have
	been paid. And so, you know, we don't hear stories like that
	too often. And so, you know, there are certainly pluses and
	minuses to this control factor.
	And then, again, I do have a lot of experience with cost of
	living. I moved from Georgia, Augusta to Washington. I live
	here 36 weeks a year. And I will assure you it costs about
	twice as much to live in Washington as it does in Augusta,
	Georgia. And so I felt that pressure.
	So here we are as a Nation, and we have right-to-work
	States and we have States that are grappling with how to
	compete. We have, in Georgia, had a surge of growth in a
	diverse business climate. And, again, it's all about--the
	reason a business locates to a State is a skilled workforce. I
	mean, that is number one. Obviously, other things come into
	fact, but number one is skilled workforce.
	Mr. Larkin, in your opinion, from the standpoint of what
	we've seen as far as rulemaking, what has that done to
	contribute to the number one factor, and that's to present an
	educated, skilled workforce out there for all Americans?
	Mr. Larkin. Are you referring specifically to the election
	rules or to--
	Mr. Allen. Well, all of these rules that come down create
	some problem, you know, in the system. And, again, our goal is
	to get Americans back to work in this country. We've got, some
	say 20 million people that really want to go to work that can't
	go to work right now.
	And so are there rules that we experienced over the last
	couple of years, in your experience, that are keeping us from
	growing our businesses and employing more people?
	Mr. Larkin. Well, I think the answer to that is yes. And to
	go back to the joint employer question, I know a tremendous
	concern articulated in the franchising community is the entire
	franchise model is set up to be a symbiotic relationship
	between the small business owner and the large brand. And the
	large brand gets to spread its brand, and the small business
	owner gets to be a business owner.
	And if the joint employer standard is going to threaten
	that relationship--and I think Ms. Aloul mentioned this
	earlier, that her franchisor is worried about all this--one of
	the things it could decide to do is not franchise anymore. And
	that would be devastating to small business owners and to job
	growth.
	Mr. Allen. Well, Ms. Aloul, as far as your business is
	concerned, and the government, this kind of top-down, one-size-
	fits-all approach, whether it be health care-related, or in
	this case, rules as far as, you know, how folks organize,
	again, you said you have the anxiety factor, but could you,
	knowing that you were not going to be affected by this process,
	I mean, would it be easier for you to grow your business,
	employ more people?
	Ms. Aloul. Absolutely. And to make this more relevant for
	Congressmen, it's not just me. You need to multiply that by
	hundreds of thousands of businesses. If I am able to hire 10
	more people or 20 more people this year, multiply that by a
	million other small businesses.
	So the answer is yes, but please don't see it as a small
	unit. You have to see it as the magnitude, like small
	businesses are the engine for growing an economy. We go around
	the world teaching people that, teaching countries that. It's
	the small businesses that create jobs and create economic
	output. So the answer is definitely yes, sir.
	Mr. Allen. Thank you. Thank you for that answer.
	Chairman Walberg. The gentleman's time is expired. Thank
	you.
	And now I recognize the gentleman from New York, a new
	member of our committee, Mr. Espaillat.
	Mr. Espaillat. Thank you, Mr. Chairman.
	And thanks to all the witnesses for their many testimonies.
	I have to concur with my colleague and her previous
	characterization that this is the 25th hearing on the National
	Labor Relations Board since the Republicans took control of
	Congress in 2011. And this hearing makes it clear that part of
	the majority's agenda will focus on weakening private-sector
	unions, which only make up 7 percent of the workforce.
	And, you know, something was mentioned about the fast food
	industry, and how franchises there which employ, obviously,
	millions of Americans are fare off. Now, I happen to think that
	many of these fast food franchises keep their workers under the
	minimum wage, and by doing so, these workers fall under the
	poverty levels in many of the States across the Union and are
	then eligible for things like food stamps, Section 8, other
	types of benefits that are paid by the American taxpayer.
	And so this is concerning, particularly since the nominee
	for Secretary of Labor is the owner of one of these fast food
	franchises.
	And I just want, Ms. Davis, for you to elaborate a little
	bit more about--I know that we've already gone through the
	discussion of whether right-to-work States have better incomes
	or not. I think the big elephant in the room is this income
	inequality across the Nation. If we have impressive job growth
	in the last eight years, although some folks would like not to
	admit that, what is it that's happening across the Nation where
	the 1 percent keeps on growing and then there is a good sector
	of the population that continues to be having a hard time
	making ends meet? And, in particular, with the fast food
	industry, what is it that they're doing that they're keeping
	these workers on minimum wage levels and are reaping the
	benefits from the American taxpayers? Do you have any
	information about that? Considering that the Secretary of Labor
	nominee is an owner of one of these businesses.
	Ms. Davis. Thank you, fellow New Yorker.
	Yes, a number of us find it very disheartening that the
	nominee for the Secretary of Labor has come out publicly
	against an increase in the minimum wage, against the notion of
	a living wage. I think what we have seen across this country in
	the last couple years is an explosion of local initiatives,
	quite frankly, some of them outside of the labor movement, that
	have demanded a living wage, given the fact that workers in the
	fast food industry and in other industries cannot support a
	family even on two jobs.
	And so what we've seen--and it's quite heartening--are
	local ordinances everywhere from New York to Seattle that are
	imposing a living wage, that are requiring sick leave for
	employees. And I wish Mr. Allen's view on sick leave was shared
	by the rest of the nonunion workplace, because it is an
	aberration to be providing sick leave in the nonunion
	workplace. It is a hallmark of unionized workers. And it's
	something that we're seeing in local governments now in New
	York City itself, because there is such a need for protection.
	I think that the American people, what we've seen, and what
	I hope we will continue to see, is a cry that the level of
	income inequality that exists now and, quite frankly, that is
	going to be worsened under some of the tax proposals that we've
	seen, is not acceptable to a Nation like ours.
	Mr. Espaillat. I want to thank God we have the $15-an-hour
	minimum wage coming into New York next year. I just can't
	imagine how someone can live on $7.25 an hour in New York, or
	even here in Washington, D.C. And so these folks will be forced
	to go to other States, and we may be continuing to lose--when
	the next session sits, continuing to lose some seats in our
	State that will go to other States. Maybe that's why this is
	being done this way.
	But I want to thank you for your information. I think
	income inequality continues to be the big elephant in the room.
	And these fast food restaurants and their practices should be
	under greater scrutiny. Perhaps that is why the nominee is
	facing some issues with the votes on the other side, on the
	other house.
	Ms. Davis. In the 10 seconds left, I would like to remind
	us that McDonald's had on its website a recipe for employees to
	exist that included holding two jobs, McDonald's and another,
	and imposing further safety net burdens on our hospitals, which
	have to take patients.
	Mr. Espaillat. Thank you.
	Ms. Davis. Thank you.
	Mr. Espaillat. I yield back my time.
	Chairman Walberg. I thank the gentleman.
	And I recognize the gentleman from Pennsylvania, Mr.
	Smucker.
	Mr. Smucker. Thank you, Mr. Chairman.
	Ms. Davis, I'd just like to get your perspective. It's been
	mentioned frequently here today by many members the declining
	union representation in our private-sector workforce. What
	percentage is that today?
	Ms. Davis. I think it's 6.4 percent right now in the
	private sector.
	Mr. Smucker. And could you give a sense of how that has
	changed over the past few decades?
	Ms. Davis. So I think that at its height, union density was
	over 30 percent. When I first started practicing 35 years ago,
	it was about 12, 13 percent, and it has continued to decline.
	Mr. Smucker. So no one disputes that we've seen decline,
	regardless of any changes that have been made by the NLRB. Why
	do you think that is occurring, Ms. Davis?
	Ms. Davis. Well, I wish I could be the expert on this, but
	I think there are various reasons that experts have looked at.
	One is globalization. The other is an increase in technology.
	I would suggest additionally that under the NLRA, as it has
	been interpreted and, quite frankly, until recently, any
	employer that wanted to defeat unionization through practices
	that the Board had considered legal had a very, very good shot
	of doing so. Any employer that wanted to defeat unionization by
	delaying the election and having an antiunion campaign for 3
	months could do so.
	So I think it's a convergence of a variety of factors, some
	within our control, some not.
	Mr. Smucker. Do you think it has anything to do with the
	changing relationship between employers and their employees?
	Ms. Davis. Well, I think that there's not a homogeneous
	answer to that. I think there have been some enlightened
	employers in various industries, including the technology
	industry, where there's no density, virtually no density.
	Mr. Smucker. I can tell you my own experience. I've
	operated a small business in the construction industry, and we,
	essentially, built a business from just one or two employees to
	one employing over 200 individuals over a period of 25 years.
	The biggest problem we always faced in the growth of our
	business was finding enough qualified people to fill the spaces
	that we had available.
	And businesses facing that situation are required, whether
	they want to or not, to do everything they can to create a
	great workplace for their employees. And of the 200 employees
	that we had, they had the ability to grow in their positions.
	They had the ability to receive training, to increase their
	pay. And they were family-sustaining jobs, and we saw them as
	family.
	And, you know, I believe that just the demographics that we
	have dramatically changed the relationship between employers.
	Employers today know that if they intend--if they want to keep
	employees and hire the best, they're going to have to create
	great places to work, create places where people can earn the
	money to support their families, and they do so.
	And so we see a lot of new innovations today. We see
	employee ownership models. We see profit-sharing models. Our
	goal always was, we were what we considered an open-book
	company where we believed that the success of the organization,
	if we succeeded together, everyone should benefit accordingly.
	We were one of those companies that was targeted for
	unionization, and we went through a number of campaigns. And
	our employees overwhelmingly believed that they had better
	opportunities through our organization.
	So I'll just submit that I believe that what you're seeing
	today--I believe, my own view is, there have been--unions have
	been a necessary part of our history, and even today unions are
	necessary; but the fact of the matter is the employer-employee
	relationship has changed dramatically. And today, 94 percent of
	our employees in the private sector choose to be in a
	nonunionized workplace.
	Ms. Davis. So I'm an old Pittsburgh Pirates fan, so you
	should credit what I say. I represent unions in the
	construction workers in New York, unionized workforce,
	extremely well-paid, benefits, the kind of situation you're
	describing.
	The nonunionized construction industry in New York has
	barely minimum wage industry, and has had so many fatalities
	that the City Council is now holding hearings on this. I wish
	all employers were like you. Unfortunately, they're not.
	Mr. Smucker. I have been part of the construction industry
	and I know that even nonunionized employees, safety, health of
	our employees is number one priority, and we treat our
	employees as family. Again, I'm not one that's philosophically
	opposed to unions.
	And I see my time has expired. So thank you, Mr. Chairman.
	Chairman Walberg. The gentleman's time has expired. Thank
	you.
	I recognize now the ranking member of the full committee,
	Mr. Scott.
	Mr. Scott. Thank you. Thank you, Mr. Chairman. Mr. Larkin,
	I heard a back-and-forth about the vacancies on the NLRB. Isn't
	it true that the three existing members have the full authority
	to make legal, binding decisions?
	Mr. Larkin. They do, but it's been a long tradition at the
	NLRB that--this isn't necessarily written anywhere in the
	statute, but that the Board won't overrule precedent without
	three members. So there's only three members, so they cannot
	make any significant changes in the law right now unless all
	three of them agree.
	Mr. Scott. They can make legal decisions. I mean, the fact
	that there are vacancies, I didn't hear a lot of complaints
	about that last year, or a vacancy in the Supreme Court, for
	that matter. But the Board can make legally binding decisions.
	Ms. Davis, we've heard a lot about the joint employer, and
	did you make a comment about whether or not there's any
	ambiguity about Ms. Aloul's case?
	Ms. Davis. Well, first of all because I mean--
	Mr. Scott.--the way she described it.
	Ms. Davis. Yes. First of all, because this is a board that
	issues decisions when cases come to it, there is not--there is
	always an interpretive exercise as each case comes to it. And
	the joint employer decision, the joint employer analysis is a
	very fact-driven analysis, like so many others. So there is
	not--and there will not be and there has not been since the Act
	was passed--a rule that we could look at on that, on--handbooks
	were mentioned earlier--policies, that tells us exactly what is
	what.
	But what we can do, what businesses can do, is look at the
	decision and analyze it and decide whether or not there is
	risk. We do that all the time in every area of the law. And I
	suggest if you look at the BFI decision, and it's very, very,
	very fact-specific--it gives us guidance that franchisees/
	franchisors can rely on.
	Mr. Scott. Based on the--her description and the BFI and
	the Freshii case, is there any question in your mind that would
	not be a joint employer situation?
	Ms. Davis. Well, I'm not going to be rendering legal advice
	to Ms. Aloul, but I think that if you take the factors she
	listed about her control over her workforce and you contrast
	that with the factors in BFI, which I discussed earlier, there
	seems to be no congruity between the BFI joint employer
	decision and Ms. Aloul's situation.
	Mr. Scott. Now, what kind of control did BFI have over
	their employees?
	Ms. Davis. BFI had both reserved contractual control and
	actual control over the leased employees. It was not a
	franchisor situation. Most importantly, it had a salary cap,
	for our purposes, which precluded the supplier/employer from
	setting wages higher than a certain level, which is distinct
	from Ms. Aloul's situation.
	Mr. Scott. Now, what kind of problems occur when you have a
	joint employer situation but the joint employer, the
	franchisor, is not at the table?
	Ms. Davis. So, if indeed there is the control over labor
	relations decisions, as we believe there is in McDonald's,
	based on the evidence that's come out so far, and the
	franchisor in that case is taken off the hook, if the employees
	opt to be represented by a union, the union will not be able to
	bargain with the party that's actually setting the terms and
	conditions of employment. It's an untenable situation.
	Mr. Scott. In a right-to-work State, what benefits do non-
	union members get compared to the benefits of dues-paying
	members?
	Ms. Davis. So they get safety net benefits in a right-to-
	work State. But other than that, there's no guarantee of sick
	pay, holiday pay, above-minimum-wage conditions, vacation pay--
	Mr. Scott. If they belong to a union--if they belong to a
	union and the union has negotiated a contract, what benefits of
	that contract does a person who didn't pay any dues, what
	benefits do they get?
	Ms. Davis. The person who pays no dues gets precisely the
	same benefits as the union members get under the contract.
	That's the law.
	Mr. Scott. So, if the union raised money from its members,
	negotiated a contract, then people that didn't pay any dues get
	the same benefits?
	Ms. Davis. That's correct.
	Mr. Scott. When can relocating a plant constitute an unfair
	labor practice?
	Ms. Davis. Only when it's found to be retaliatory, which
	was the case in the Boeing complaint. The relocation in and of
	itself is totally lawful.
	Mr. Scott. Thank you, Mr. Chairman.
	Ms. Davis. Thank you.
	Chairman Walberg. I thank the gentleman.
	And I recognize the gentleman from Indiana, Mr. Rokita.
	Mr. Rokita. I thank the chairman.
	Good morning and welcome to everyone. I appreciate the
	witnesses' testimony.
	I want to begin my questioning to Mr. Larkin, but, first, I
	want to thank Chairman Walberg for holding this hearing. And
	let me say it's great to be on the HELP Subcommittee again, so
	thanks for having me.
	Mr. Larkin, did you have any response to Ms. Davis' answers
	in the last line of questioning regarding right-to-work,
	regarding joint employer standards, anything like that,
	anything you want to add or contrast?
	Mr. Larkin. Sure. I would--well, I would defer discussion
	about right-to-work to Mr. LaJeunesse, who is the expert on the
	panel on that.
	You know, I did want to make a few points about the
	Specialty Healthcare standard because there were some points
	raised and a particular case raised. And what I heard was
	statistics about the size of the bargaining unit and that,
	since the Specialty Healthcare decision, the bargaining unit
	size hasn't gotten smaller.
	When we use the phrase ``micro unit,'' it has nothing to do
	with the number of employees in the unit; it's about the size
	of the unit in relation to the rest of the employer's
	workforce. And what--why--the reason the Specialty Healthcare
	sets up the potential for micro units is that it allows the
	union to fragment an employer's workforce into artificial
	segments that don't bear any rational relation to the
	employer's actual business.
	A case that I would mention to you on that is the Yale
	University case that just came out two weeks ago. The union
	petitioned for nine separate collective bargaining units, each
	one of nine separate academic departments at Yale University.
	And the regional director in that case approved that under
	Specialty. So they're going to go to nine elections, one in
	each department.
	And so think about how Yale University is going to bargain
	with the union over nine separate bargaining units, all of whom
	are academic faculty, meaningfully and effectively. That's the
	problem we think with the Specialty rule. It allows that kind
	of result. And that just can't be the right answer under the
	act.
	Mr. Rokita. Is it, in fact--it's not the answer they want;
	they just want to, in effect, give up then and just have a
	blanket union covering everybody and some kind of negotiation,
	right? I mean, wouldn't that be the next logical step? Yes, you
	can't imagine nine different elections. So we're just going to
	go ahead and submit to whatever ultimately the union wants.
	Mr. Larkin. I don't know what the union in that case is
	thinking, but that's certainly--
	Mr. Rokita. Possible?
	Mr. Larkin. --possible, yes.
	Mr. Rokita. Talk to me about Browning-Ferris Industries,
	that the NLRB 3-2 decision revising the joint employer
	standard.
	Mr. Larkin. Well, there has been quite a lot of discussion
	about Browning-Ferris today on both sides. You know, I think
	we've heard from Ms. Aloul about what that standard has done to
	the certainty with--
	Mr. Rokita. Why do you think the general counsel chose to
	pursue that standard, NLRB counsel?
	Mr. Larkin. Well, you know, I mentioned this earlier but,
	you know, I think that it has a lot to do with the organizing
	desires of labor and their desire to organize more easily in
	franchising. And this standard clearly allows that. And it's no
	coincidence, I would suggest, that the very first target the
	general counsel picked after Browning-Ferris came out was
	McDonald's.
	Mr. Rokita. All right. And switching to you, Mr.
	LaJeunesse, feel free to comment on right-to-work if you like,
	but I have a particular question for you.
	Mr. LaJeunesse. Sure.
	Mr. Rokita. You have practiced at the NLRB for a long time.
	Over the last eight years, how has it been different from other
	times in your career?
	Mr. LaJeunesse. Well, it's more difficult for non-union
	employees who bring charges against unions for violation of the
	act to get complaints issued by the general counsel. And the
	Board, as I pointed out in my testimony, has failed to fully
	enforce the right of workers to refrain from supporting unions
	financially and to refrain from union representation.
	Mr. Rokita. But, sir, couldn't you argue that this is just
	a case of the pendulum swinging from a Democratic flavor to a
	Republican and back and forth? Or is there something--did you
	notice something inherently different about the Obama-era NLRB
	versus other Democratic administrations?
	Mr. LaJeunesse. Well, it's swung a lot farther this time
	than ever before.
	Mr. Rokita. Farther left?
	Mr. LaJeunesse. Farther--well, farther pro-union. Whether
	you want to call that left or not is--
	Mr. Rokita. Okay.
	Mr. LaJeunesse. If I may comment on the right-to-work
	situation that--
	Mr. Rokita. I have 10 seconds.
	Mr. LaJeunesse. --that Congressman Scott addressed. The
	employee in a right-to-work State, who is in a unionized shop
	is stuck with whatever the union negotiates. He cannot
	negotiate his own terms and conditions of employment, even if
	he thinks he deserves more than the one-size-fits-all contract,
	and he can't work out his own grievances with the employer
	without the union's approval.
	Chairman Walberg. I thank the gentleman.
	The time has expired. Thanks for staying around for the
	very end and coming back after a busy chairmanship yourself.
	Before we go to closing comments, I ask unanimous consent
	to submit for the record the following two letters: one, a
	letter from the Coalition for a Democratic Workforce regarding
	recent actions by the NLRB; and, two, a letter from the Retail
	Industry Leaders Association also regarding recent actions by
	the NLRB. Hearing no objection, the letters are submitted.
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	Chairman Walberg. At this time, I now recognize the ranking
	member for closing comments.
	Mr. Sablan. All right. Thank you. Thank you, Mr. Chairman,
	for holding this hearing.
	Today, we've heard how the National Labor Relations Board
	has adhered to historic precedent and how it has facilitated
	the core process of the National Labor Relations Act through
	its election rule. As an indicator that the decisions of the
	NLRB are squarely within the mainstream, the Board's decisions
	have been consistently upheld by the court of appeals. In the
	last five years alone, there were 284 appeals to the courts,
	and they were sustained 233 times. This includes the Specialty
	Healthcare case, which has been upheld in seven court of
	appeals.
	But it is troubling that there are efforts underway to
	undermine workers' efforts to organize and to weaken labor
	unions. This includes right-to-work legislation, which is
	falsely promoted as promoting economic development.
	Mr. Chairman, we have letters from the International
	Brotherhood of Teamsters, the United Steelworkers, and the
	International Association of Fire Workers opposing right-to-
	work legislation introduced to this Congress. I ask that it be
	inserted in the record.
	Chairman Walberg. Hearing no objection, it will be
	inserted.
	[The information follows:]


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	Mr. Sablan. All right. Let me quote from the Teamsters
	letter. I quote: ``Nine of the 10 States with the highest
	poverty rates are right-to-work States. Workers in States with
	right-to-work laws make about $1,500 less per year than workers
	in free-bargaining States. Workers in right-to-work States are
	less likely to have employer paying health care and pensions
	and more likely to die in accidents on the job. Right-to-work
	does the opposite of empowering workers; it weakens their
	ability to bargain collectively to build a future for their
	families.''
	Mr. Chairman, I would like that this letter be entered into
	the record. I have already asked that.
	I also would like to thank all the witnesses for--I know
	you have to spend time preparing for today's hearing. And we
	don't have to agree with one another, but I appreciate the
	effort you have done to prepare and also for coming and sharing
	your thoughts with us today. Thank you very much for doing
	that.
	And I yield back. Thank you.
	Chairman Walberg. I thank the gentleman.
	And I would concur. Thank you to the panel for being here
	today. It would be a rather unproductive hearing without you,
	and so appreciate you being here.
	Also appreciation to--though most have left now, except you
	and me--to the great attendance from both sides of the aisle
	for this hearing.
	Let me say this, as a former United Steelworker myself:
	Going back to the last time that I paid union dues as a union
	steelworker at South Works U.S. Steel, south side of Chicago, I
	certainly would indicate that the working conditions that I see
	now as I walk through steel plants in my district and other
	places are far superior to what I experienced back in 1969,
	1970. And that's a good thing for safety, et cetera, that goes
	on.
	But I also know that there are 28 States in the Union that
	now are right-to-work States, my own State of Michigan, as
	well. And while I hear statistics and figures and assertions
	thrown all over the place, I have to say, at the very least,
	that being the case, 28 States in the Union being right-to-work
	States, individual workers having the opportunity to choose to
	be in the union or not, a decrease in the numbers in the unions
	right now indicate to me that it's not because these workers
	now want to work in worse situations, be paid less, have
	inferior benefits, that they're choosing to be in these States
	and these workplaces.
	Our concern today and why we have had, over the course of
	the past 6 years, 25--if that is the number--hearings on NLRB
	is because the major impact that NLRB has on the workplace and
	a concern that we are putting a thumb on the scales, especially
	in these last eight years, to try to stop that slide of union
	involvement.
	As I said, I appreciate what I see when I walk through
	steel mills now. I don't see workers doing some of the things
	that I had to do, had no choice. That was the working
	situation. It isn't the case now.
	So I submit to you that we may have other hearings on the
	NLRB. We want to get things right. We've got a lot of issues to
	address. We want to make sure that the workplace moves forward,
	that it's sustainable, that it expands. Why? So that we have
	more workers capable of being in a job that's secure, that
	gives them choices for the future to grow; and that we have
	needs met of constituents for their economic impact as well
	and, in this case with Ms. Aloul, the opportunity to have care
	given in difficult stages of their life; and that we don't have
	unnecessary bureaucracy, rules, and regs standing in the way.
	I would suggest to you that there is a reason why NLRB is
	pushing to put arbitrary and artificial roadblocks and
	standards in the way, to put a thumb on the scale, to assist in
	stopping the slide in the growth of unions, and to turn that
	around without the request of the employees themselves.
	And we see at this point in time almost $2 trillion of
	regulatory compliance costs that are on the backs of job
	providers. When we see increased costs to not only the job
	providers but to the employees because of the Affordable Care
	Act in its taxes, its mandates, its work-hour requirement, et
	cetera. Those are problems that are frustrating the growth in
	our economy, and those are things we need to deal with.
	So, while I know there's a difference of opinion, there
	are, I hope, not two parallel universes, but sometimes it
	appears that to be the case. I would hope that we could come
	together to work to ensure that employers and employees benefit
	in the coming days, months, and years, as opposed to being in a
	combative relationship that does no good for either side. And
	we'll do our best on this committee to achieve that.
	Having said that and having no other business to come
	before the Subcommittee, the Subcommittee stands adjourned.
	[Additional submissions by Mr. LaJeunesse follow:]


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	[Additional submissions by Mr. Sablan follow:]

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	[Additional submissions by Chairman Walberg follow:]


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	[Extensive material was submitted by Chairman Walberg. The
	submission for the record is in the committee archive for this
	hearing.]

	[Additional submission by Mr. Wilson follows:]

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	[Questions submitted for the record and their responses
	follow:]


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	[Whereupon, at 12:20 p.m., the Subcommittee was adjourned.]

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