[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
__________
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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.
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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.]