Table of contents *

opening statement of the honorable harris fawell, chairman, subcommittee on Employer-employee relations, committee on education and the workforce, u.s. house of representatives *

opening statement of the honorable donald payne, ranking minority member, subcommittee on employer-employee relations, committee on education and the workforce, u.s. house of representatives *

STATEMENT OF JAY KRUPIN, PARTNER, KRUPIN, GREENBAUM & O'BRIEN, WASHINGTON, D.C. *

STATEMENT OF THOMAS J. COOK, OMEGA ELECTRIC CONSTRUCTION COMPANY, WILLISTON, VERMONT *

STATEMENT OF PATRICK PARCELL, MEMBER, BOILERMAKERS LOCAL 169, DEARBORN, MICHIGAN, ON BEHALF OF THE BUILDING AND CONSTRUCTION TRADES DEPARTMENT, AFL-CIO *

STATEMENT OF PETER R. KRAFT, PARTNER, KRAFT & WINGER, PORTLAND, MAINE *

STATEMENT OF PETER C. ROUSOS, DIRECTOR OF CORPORATE HUMAN RESOURCES, GAYLORD ENTERTAINMENT COMPANY, NASHVILLE, TENNESSEE, ON BEHALF OF THE U.S. CHAMBER OF COMMERCE *

STATEMENT OF RICHARD GRIFFIN, GENERAL COUNSEL, INTERNATIONAL UNION OF OPERATING ENGINEERS, WASHINGTON, D.C. *

STATEMENT OF ARLENE GOODMAN, PRESIDENT, GOODMAN & COMPANY, BRENTWOOD, TENNESSEE, ON BEHALF OF THE INTERNATIONAL FRANCHISE ASSOCIATION *

appendix a - written opening statement of the honorable harris fawell, chairman, subcommittee on employer-employee relations, committee on education and the workforce, u.s. house of representatives *

appendix b - written opening statement of the honorable donald payne, ranking member, subcommittee on employer-employee relations, committee on education and the workforce, u.s. house of representatives *

appendix c - written statement of Jay krupin, esq., Krupin, greenbaum & o"brien, washington, D.c. *

February 5, 1998

The subcommittee met, pursuant to call, at 10:15 a.m., in Room 2175, Rayburn House Office Building, Hon. Harris Fawell [chairman of the subcommittee] presiding.

Present: Representatives Fawell, Talent, Knollenberg, Petri, Roukema, Ballenger, Payne, Fattah, Hinojosa, McCarthy, and Tierney.

Staff Present: Mark Rogers, Workplace Policy Coordinator; Gary Visscher, Workplace Policy Counsel; Peter Gunas, Professional Staff Member; Rob Green, Professional Staff Member; David Frank, Professional Staff Member; Bill McCarthy, Press Secretary; Marjorie Wasson, Staff Assistant; Brian Kennedy, Minority Labor Coordinator, Counsel; Peter Rutledge, Senior Legislative Associates; Patricia Crawford, Legislative Associate; and Shannon McNulty, Staff Assistant.

Chairman Fawell. The subcommittee will come to order.

I welcome each of you to this hearing of the Employer-Employee Relations Subcommittee. A special thanks to our witnesses for taking time to be here.

The reason we are holding this hearing is to consider four bills that were introduced last session: H.R. 2449, the Fair Access to Indemnity and Reimbursement Act; H.R. 1598, the Justice on Time Act; H.R. 1595, the Fair Hearing Act; and H.R. 758, the Truth in Employment Act.

As a package, I believe they go a long way to level the playing field for small companies, labor organizations, and employees in their dealings with the National Labor Relations Board. It is my understanding that Senator Hutchinson will be introducing four similar bills just next week.

As I have said in the past, few issues cause people to square off as adversaries as quickly as labor issues. I suspect that there may be some good, heated debate this morning, which is good.

However, I think we would all agree that the National Labor Relations Board should not be pro-union and it also should not be pro-employer. It should be a neutral arbiter of labor disputes under the act. As a quasi-judicial body, indeed serving as a prosecutor and also as a judge in labor disputes, it seems to me that the NLRB should bend over backwards to be impartial and strive to be above politics.

The four bills we are addressing this morning are essential to helping small employers and, small labor organizations, to defend themselves against government bureaucracies, to help employees who are entitled to reinstatement to get their jobs back quickly; to protect the right of employers to have a hearing to determine the appropriateness of a single location for a bargaining unit, and to prevent the processes of the Board from being used to disrupt and inflict economic harm on employers.

H.R. 2449, the Fair Access to Indemnity and Reimbursement Act, tells the Board that before it brings its vast expertise and considerable legal resources against the little guy, business or union, it should make sure that the case is a winner, because if the Board loses, then it will pay the legal costs that the small entity, employer or labor organization, had to pay to defend itself against a meritless action.

H.R. 1598, the Justice on Time Act, requires the NLRB to issue a time decision within 1 year on all unfair labor practice complaints where it is alleged that an employer has discharged an employee in an attempt to encourage or discourage union membership. Employees should not be held in limbo waiting for the Board to render its decision. The bill would ensure swift justice and timely reinstatement of a wronged employee, while also reducing the cost of litigation and back pay awards.

H.R. 1595, the Fair Hearing Act, requires that NLRB conduct hearings to determine when it is appropriate to serve via a single location a bargaining unit or a laborer where a labor organization attempts to organize employees at one or more facilities in a multifacility employer, as the Board has done for decades. This bill is necessary to avoid Chairman Gould's imposing his, what I feel is an ill-conceived, "one-size-fits-all" rule that would prevent an employer from presenting at a hearing all of the many and different relevant factors the Board should consider in rulings on a single-location bargaining unit.

H.R. 758, the Truth in Employment Act, amends the NLRA to make sure an employer is not required to hire somebody who is not a bona fide applicant. That is what we are trying to do with that legislation. We are still in the process of trying to put the words together, but the whole concept is that nobody should ever have to hire somebody who doesn't even want to work for you. We all feel that way in Congress.

That is what we are trying to do. It is not an easy thing to do, but that is the intent that we have.

We have fashioned some language that I believe improves upon H.R. 758, as I have just indicated, by narrowing the bill to make sure it does not in any way otherwise infringe on any rights or protections otherwise accorded to the employees under the National Labor Relations Act. It is important that we have some healthy debate, and I am sure we shall while considering these four bills in an objective manner. I think we can do that.

written opening statement of the honorable harris fawell, chairman, subcommittee on employer-employee relations, committee on education and the workforce, u.s. house of representatives - see appendix a

I would now ask the distinguished ranking member, Mr. Payne, the gentleman from New Jersey, to give his opening statement.

Mr. Payne. Thank you, Mr. Chairman. Thank you for this opportunity to discuss the issue of fairness to small business and employees.

All of us want to see small businesses thrive, because the majority of the jobs in our country are created by small businesses, so I think we all have the same goal of seeing a strong economic thrust in this country. However, I find it regrettable that we continue to have hearings to discuss legislation that has been cloaked in the guise of fairness, when in fact the result of this alleged fairness is fewer rights and fewer protections for the workers.

This committee has worked on the so-called Working Families Flexibility Act, which reduces the take-home pay for working people. We have worked on a so-called Team Act, which brings company unions back. The list goes on and on and on.

I will give you one thing, though. Republicans are good at naming bills. They always have the great titles with truth and justice and fairness and flexibility; their bills are just cloaked in these wonderful terms. It would be great if these bills really dealt with truth and justice and fairness and flexibility for the American worker.

But the American people are too intelligent to be fooled by deceptive names. They will not support policies that lead to the erosion of hard-fought gains for working people.

For the purposes of today's hearings we will look at H.R. 2449, the Fair Access to Indemnity and Reimbursement Act; H.R. 1598, the Justice in Time Act; H.R. 1595, the Fair Hearing Act; and H.R. 758, the Truth in Employment Act. Two of the bills impose significant new burdens on the National Labor Relations Board, yet, Republicans have consistently fought to reduce staffing and funding for the Board. So you give them additional work and you give them less staff and then you wonder about whether they are competent to do the job. It doesn't take a rocket scientist to know that if you get more work and you reduce staff, you are going to have severe problems. The result of these new burdens will inevitably be that the Board will be less able to protect the rights of both workers and employers.

The other two bills we will hear testimony on today are apparently designed to make it more difficult for workers to organize a union. Where we see in Third World countries that unions are becoming stronger, workers' rights are starting to be protected, and the environment is starting to be protected, in our country we see a step backwards.

There is a new attempt to erode what has made this country the greatest economic power in the world, fairness to workers, at a time where profits are at an all-time high. It is about greed and selfishness, and it is actually un-American.

One bill seeks to overturn the unanimous Supreme Court decision and provide that union organizers will not have the legal protections afforded to all other employees. The other bill would needlessly delay the process for determining the size of the bargaining unit being organized. The law is already slanted against those who seek to organize unions in order to protect their rights, but now Republicans want to make it even harder.

Every day workers are illegally fired_even here in the House they are illegally fired, but they don't have unions here, so they can do whatever they want to. We brought that up at the last meeting. We are going to continue to bring it up, because if you work for the U.S. Federal Government, which includes us here in the Congress, or you work for small business, you would expect that the person working for the Federal Government would have great protection. But we find that they are protected even less than in small businesses.

Every day workers are illegally fired for trying to exercise their rights to organize a union. The penalty for this violation of an employee's fundamental rights is what amounts to simply a slap on the wrist of the employer's hand.

Mr. Chairman, with all of the talk about truth and justice and fairness, I would hope that some day we will get around to imposing real penalties on employers who illegally fire employees for trying to organize a union. More than 60 years after the enactment of the National Labor Relations Act, many employers are still not reconciled to the idea that their employees should have the right to form their own organizations, free of employer control or interference, for the purpose of designing representation of their own choosing, for the purpose of negotiating terms and conditions of their employment.

It is my hope that today we will rise above the usual level of these hearings and get to the heart of some of the important issues before this committee. However, given the substance of the legislation here, I think we are going to be back in the same old boat again.

Thank you very much.

written opening statement of the honorable donald payne, ranking member, subcommittee on employer-employee relations, committee on education and the workforce, u.s. house of representatives - see appendix b

Chairman Fawell. Well, with that optimistic statement, I certainly understand the gentleman's feelings, and we hope we can surprise people and have some give-and-take here and make some progress. Evil is in the eyes of the beholder, as is beauty.

I am going to introduce all of you folks who have been kind enough to give us your time to be here today, and then we will commence with the testimony. Our first witness will be Jay Krupin, who is a partner in the Washington, D.C., law firm of Krupin, Greenbaum & O'Brien. Mr. Krupin is an expert in labor and employment law, and has his firm's practice in these areas.

Our next witness will be Thomas Cook, who is an employee of Omega Electric Construction Company in Williston, Vermont. Mr. Cook is a former member of the IBEW Local Union 300 in Burlington, Vermont, and has some very good firsthand experience of one who at one time was a so-called "salter," for the union.

The third witness will be Patrick Parcell from Dearborn, Michigan. Mr. Parcell, a member of the International Brotherhood of Boilermakers, is testifying today on behalf of the AFL-CIO's Building and Construction Trades Department.

The next witness will be Peter Kraft, a partner in the Portland, Maine, law firm of Kraft & Winger. Mr. Kraft practices in all areas of labor and employment law and has served four terms as Chairman of the Labor and Employment Law Section of the Maine Bar Association.

Next will be Peter Rousos, Director of Corporate Human Resources for the Gaylord Entertainment Company in Nashville, Tennessee. Mr. Rousos is testifying on behalf of the U.S. Chamber of Commerce.

Our sixth witness will be Richard Griffin, General Counsel for the International Union of Operating Engineers here in Washington, D.C.

Our final witness will be Arleen Goodman, President of Goodman & Company and adviser for business acquisitions and development. Ms. Goodman has a 20-year career of independent business ownership, including national-based arcade game locations, two campgrounds and a tour bus company. She is the first woman elected president in the 30-year history of the national KOA Owners Association, and is a founder of the American Franchisee Association. She is testifying for the International Franchise Association.

So we will commence our testimony with Mr. Krupin.

We operate here under a 5-minute rule. We aren't arrogant about that, we don't pull you off the stage if you happen to go over a bit, but we try to abide by that. Then, during the questions, I invite all of you, if you sense that there is something said by someone else that you have some strong feelings about, to indicate that you would like to be able to respond, because I think the give-and-take of a hearing like this is where we really gain a lot of knowledge. You folks are on the front lines and you understand what practical applications are. That is what we here are to look at.

So Mr. Krupin, if you would commence your testimony.

Mr. Krupin. Thank you very much, Mr. Chairman and members of the subcommittee. My name is Jay Krupin, and I am a partner at Krupin, Greenbaum & O'Brien, a law firm in Washington, D.C., exclusively practicing labor and employment law, representing employers and management. A substantial portion of our practice includes representation of hotels and restaurants throughout the United States, as well as other service-oriented businesses. We work closely with the National Restaurant Association and the Educational Institute of the American Hotel and Motel Association, and have been asked to speak before their members on numerous labor and employment matters.

We continually have cases before the National Labor Relations Board in many regional offices of this agency throughout the United States. Indeed, the proposed legislation before this subcommittee has a direct impact on our clients, how they operate their businesses, their contribution to the American economy, and their ability to deal with their employees. It is based upon our expertise in Federal labor law and our experience as practitioners before the National Labor Relations Board that our comments today are presented.

The four bills before the subcommittee today seek to amend the National Labor Relations Act. These four amendments to the National Labor Relations Act are in response to efforts to strengthen labor's hand. Without the passage of these amendments, the playing field is certainly tilted in labor's favor, and is and will destroy the balance so critical to effective labor relations.

As one who daily represents employers on this playing field, I can clearly state that America's businesses, especially those in the service industries, such as restaurants and hotels, do not think it is in America's best interests for labor to continue to manipulate the Federal labor laws in its favor. Thus, we submit that passage of these amendments is absolutely necessary.

The perception that the employment landscape of Samuel Gompers and John L. Lewis is alive and well in the 1990s; requiring that labor be cloaked with added strength, is untrue. Labor does not need affirmative action plans to help it organize, with single-site rules, union salting, and ineffective Equal Access to Justice Act, and unlimited time to resolve discriminatory complaints filed before the National Labor Relations administration. Rather than that, the bills before this subcommittee require that labor must succeed on its own merits. It must not succeed by gagging employers or permitting unions to use camouflage tactics to infiltrate and disrupt the ownership. Indeed, these bills require that the rules of fair play, integrity, and due process prevail.

The Fair Hearing Act allows an employer to respond in an open and fair forum to a union's unrestricted efforts to fashion a unit to represent. As you well know, it is the union that picks the unit to represent which it believes will win an election. Unions, therefore, are not so concerned with whether the unit is appropriate to meet the employees' interests in bargaining or its effect on the employer's operations, but rather, we find they are singularly focused on their ability to win representational status.

Experience has shown that unions propose units that do not necessarily make practical business sense in all cases. Rather, unions focus on the size of the bargaining unit and its organizational process. Generally, the smaller the unit, the greater the chance for success in organizing, particularly so in the service industries.

The purpose for a unit determination hearing as it presently exists, which the Fair Hearing Act will preserve, permits the appropriateness of a unit to be fairly considered. Adoption of the Fair Hearing Act will preserve the appropriate evaluation of the community of interest among the groups of employees that will best advance the interests of collective bargaining. It will prevent the gerrymandering by petitioning unions from stitching together units for the sole purpose of advancing its organizational efforts.

The only way to ensure that the appropriateness of a unit is considered is by reviewing the facts of each case. The Fair Hearing Act ensures the survival of due process.

Most important of all, the Fair Hearing Act supports recent Board actions in the hotel and restaurant industry that did not uphold single-site determinations, but rather have held that a portion of a single site is an appropriate unit.

While labor's efforts are calculated to preclude the inclusion of multisite units in an appropriate unit determination, it is interesting that unions have recently requested that a subsingle-site unit be appropriate. Clearly, labor's interest in the single-site unit and its opposition to the Fair Hearing Act is not based upon sound reasoning, but rather on the political advantage that the smallest unit possible provides for its organizing schemes.

We have seen many representation cases where the employer has argued for a single site, but the union sought a small unit. In several restaurant cases here in Washington, D.C., for example, a single site was argued by the employer to be an appropriate unit, and the union took the position that the argument was not valid. The regional director ruled that a portion of that single site was indeed an appropriate unit.

In these cases, the regional director ruled that only kitchen employees constitute an appropriate unit. Accordingly, the unit specifically excluded hostesses, bartenders and servers, who, frankly, worked side by side with these kitchen employees.

Similarly, in the hotel industry, when the employer has argued that a single site is appropriate, unions have argued that a portion of a single site be the appropriate unit. In these cases, housekeeping units, made up of housekeepers and laundry attendants, were determined to be the appropriate unit, excluding food and beverage, front desk, and engineering employees.

These examples clearly show that even labor tactically argues the facts to suggest that single sites are not appropriate units. It can be assumed that the regional directors in these cases ruled that subsite single units or subsingle-site units are appropriate based upon the facts deduced at the representational hearings.

Indeed, sometimes a single site is appropriate; sometimes a multiple site is appropriate; even sometimes a portion of a single site is appropriate.

How do we know which unit fits which set of circumstances? The only way to determine the correct answer is to gather the facts. The only way to gather the facts is to require the National Labor Relations Board to hold a fair hearing. Accordingly, we fully support the Fair Hearing Act.

The Truth in Employment Act is another bill before this subcommittee that ensures that no affirmative action plans for labor exist. It has been held for decades that in union organizing campaigns, laboratory conditions must be maintained so employees may make a free and fair decision as to whether they wish to be represented by unions. Indeed, that decision is not the employer's decision or the union's decision, but rests squarely on the shoulders of the employees. After all, it is their representative that they are choosing. In America's business, the employees' rights must be honored in that laboratory.

That is why Section 8(a)(2) of the National Labor Relations Act was enacted. It precludes employer-dominated unions from existing. Under that section, employers must not control the employees' representative. Employers should act with unions at arm's length. Employers may not dominate or exert undue influence on the union.

The Truth in Employment Act is similarly an effort to maintain those laboratory conditions from being impinged from the other side by interfering actions from unions. This bill is in direct reaction to the ability of a union to "salt" a workplace with an organizer who truly does not want to work in the establishment and further the business' objectives. Rather, the "salt's" sole purpose is to organize the workforce and, in some cases, to hold the employer hostage by disrupting operations.

By placing a "salt" in the workplace, the union certainly is not dealing at arm's length. The union is, however, attempting to exert undue influence on the workforce. Just as the prohibition applies to employers in Section 8(a)(2) to stop an employer from interfering with laboratory conditions of the organizing process, so too must unions be forestalled from exerting improper influence on the workplace through salting.

There is no question in our minds that salting is cheating. Salts cheat when they apply for jobs they truly do not want to fill. Salts cheat good and honest applicants that wish to work and support their families. Salts cheat when they conceal their purpose is to organize the workforce. Salts cheat by organizing on a workplace premises generally in violation of the employer's practices. Salts cheat by providing misinformation to employees in the workplace without giving the employers an opportunity to respond.

As noted above, it is well settled that employers cannot dominate unions. It similarly should be clear that unions should not be allowed to deceitfully organize workers. Accordingly, we fully support the Truth in Employment Act.

The Fair Access to Indemnity and Reimbursement Act is viewed by employers to be legislation to restrain the National Labor Relations Board from its overaggressive actions, as it may, from time to time, overcompensate to help unions against employers. Unfortunately, small employers have no such aid, which the unions have when they file for unfair labor practices, as unions are generally represented by the Board in these cases. We think that to make fairer that process the Fair Access to Indemnity and Reimbursement Act must be passed.

Lastly, we support the Justice on Time Act. We think that imposing deadlines on the Board as they impose deadlines on the employer also is important. As a result, we support that as well.

Thank you very much for providing me with the opportunity to testify before this subcommittee on these important matters, which obviously impact the relationship between employers and unions, and most importantly, the employees and the American workforce.

Chairman Fawell. Thank you, Mr. Krupin.

written statement of Jay krupin, esq., Krupin, greenbaum & o"brien, washington, D.c. - see appendix c

Chairman Fawell. Mr. Cook. The Chair recognizes Mr. Cook at this point.

Mr. Cook. Mr. Chairman, members of the committee, I would like to thank you for allowing me to come here today.

Organized labor's technique of "salting" open shop contractors has deviated from its stated mission, which is to organize the workers of such companies. Instead, it has become a method to stifle competition in the marketplace, steal away employees, and to inflict financial harm on the competition.

I would like you to know that I personally support the collective bargaining process. It should remain a right for any worker to organize, and laws should remain to protect these rights. It is only the abuse and the political bias that exists today in the process of investigating frivolous, unfair labor charges by the NLRB that is of concern to me.

I have been an electrician for 20 years. It is what I do; it is how I feed my family. The practice of salting as it stands today threatens my ability to work - no, my right to work, and to achieve a quality of life every American expects.

In Vermont, 90 percent of the electrical construction workers are employed by merit shop contractors who make a decent living by hard work and devotion to their companies. To watch paid organizers and union agents sabotage this effort is unacceptable.

From January of 1989 to October of 1993 I was a member of the IBEW Local Union 300 in Burlington, Vermont. I completed an organizing seminar on education and training in January of 1992. In our seminars we were instructed on how to apply for work. Some of us would disguise our union affiliations with the hope that we would be hired, only to be discovered and terminated.

The organizers stated that previous NLRB decisions recognized the right for us to do this. After a few days on the job, we would then don apparel, pins, buttons, emblems, and notify job site management that we were union. We would then tell them that we were there to organize the workers. We always carried recording devices to document conversations. The opposition was never informed as to the existence of such devices. It was said, by startling the managers in this way, we could generate charges to file with the NLRB. It is interesting to note that in the 2 years I did this, I could personally not find grounds to file a charge.

It was understood that once on a job site we would then contact our union business agents, or BA, for instructions. It was customary to call the BA at the close of each working day to report our findings and accept further instructions. As time went on, I began to see a development. After management on the job site realized they had union workers on the job, yet did not commit any acts which we could file charges on, we would be instructed to quit the project. We also did this without notice. I was told on many occasions that we did not want to help them in pursuit of their projects.

In the summer of 1993, while I was salting a project in Burlington, Vermont, I attended two meetings with the New England district manager, who informed us he was now supervising our efforts. I clearly recollect asking him why we did not spend more time negotiating in good faith with the companies that we were organizing, especially when we felt we had employees or several employees willing to request an agent to collectively bargain. He stated that we would never organize the men and that we were there to file charges, in fact, as many as we could. He told us that the NLRB was committed to prosecuting every single charge and that there was no expense to us at all for this, and that the contractor would be forced to spend time and money to defend themselves, even if the NLRB dismissed the charges.

He displayed satisfaction in saying that this was a very effective policy in upstate Maine and that he had enjoyed several victories there. These victories were not expressed in number of companies organized, but number of dollars extracted in legal fees and expenses.

In 2 years, not a single company had been organized, and these statements troubled me a great deal. In 2 years, not a single company had been organized, and what if any workers were interested in joining the union were whisked off their job sites and put with established union contractors elsewhere?

That ends my experiences in the fall of 1993. Employment opportunities being scarce, the Vermont Department of Employment mandated that I apply for work with a company, Omega Electric, in Plattsburgh, New York. I secured employment with them on August 30, 1993, and I notified my local business agent that I was on site. He stated that an attempt was under way to organize Omega from the local having jurisdiction, Local 910 in Watertown, New York. I did not actually attempt to organize, as I was instructed not to do so by my BA.

Several weeks later I received an evening phone call at home from the BA with Local 910. He ordered me to quit immediately, stating that I was undermining his ability to file unfair charges against that company. He stated that I would be brought up on charges for violating union constitution bylaws if I did not leave the project.

On October 20, 1993, I tendered my resignation with the IBEW, so ended my experience as a union electrician and a salt. Since then, I have been gainfully employed with a local merit shop contractor. We, as well as many others, have been targeted by the IBEW. During this time I have seen many examples of frivolous, unfair labor charges. It is with the utmost certainty that I state these charges are without merit. My experience as a salt, and plain common sense, tell me that. I ask your indulgence as I pose the following questions:

As a worker's right to organize must be protected and a government agency appointed with the responsibility to oversee that right, can we not limit the abuse of frivolous charges simply by mandating that anyone who files such charges would be financially responsible for them?

Secondly, can we not make an effort to ensure the impartiality of the NLRB and its agents by mandating its officers are duly elected by Congress, instead of politically appointed by presidential decree?

Finally, does a paid agent with ulterior or destructive motives actually meet the definition of an employee, as previously ruled by NLRB?

In conclusion, I would thank you again for your time. My experience with salting has made me realize organized labor's intention is to put competition out of business. It is also shamefully obvious that political intervention has the NLRB and its agents moving away from the impartial government body it was designed to be.

The time for change is now. For these reasons, I support H.R. 758, the Truth in Employment Act of 1997, as well as any other legislation pertinent to these issues.

written statement of Thomas J. Cook, omega electric construction company, williston, vt - see appendix D

Chairman Fawell. Thank you. You hit some, I think, very interesting points about how you determine if somebody is a bona fide applicant who really wants to go to work for, say, X Electric Company, or whether he has no interest in really working for that employer but has some other reasons.

How do we fashion wording that will not interrupt the right of an employee or an applicant to fulfill the bona fide interest of being interested in organizing, but who passes a line that you realize he has no interest in ever wanting to be a permanent employee there, he doesn't really want to be there? That is the question we are wrestling with.

How can we create language that will say no to the person who doesn't really want to work for, say, Harris Fawell, Congressman, or Don Payne, Congressman, or whatever? So that is a tough question we have, because we do want to live up to the Supreme Court decision.

The next witness is Mr. Parcell.

Mr. Parcell. Mr. Chairman, members of the committee, good morning. My name is Patrick Parcell. Bob Georgine, President of the Building and Construction Trades Department, AFL-CIO, has asked me to represent the building trades here today. I am very pleased to be here, and I thank President Georgine, the Chair, and the committee for inviting me.

I present myself to you as a construction worker and a longtime proud member of the International Brotherhood of Boilermakers. My family and I reside in Michigan, but my story is similar to what you might hear from hundreds, or thousands, of other workers, both union and nonunion, while trying to improve the standard of living of workers and families that depend on our industry for their livelihoods.

I am neither a lawyer nor a paid full-time union organizer. My remarks today are those of a union member who believes strongly in organizing non-represented construction workers and their employers in our highly skilled and profoundly competitive industry. It is my understanding that today's hearing focuses on the organizing tactics known as "salting." I would like to dispel some of the myths and misinformation which have surrounded this practice.

"Salting," as I understand the term, means nothing more than union organizing. The term "salt" is nothing more than a catch phrase used to describe a union member who gains employment with a nonunion employer in order to attempt to organize the employer's employees.

I applied for employment with and was hired by nonunion construction companies. I did so for the purpose of lawfully organizing my coworkers and my employers in collective bargaining. You should know that my trade, like those of the building trades as a whole, requires considerable skill. I have 25 years of training and expertise in the industry, completed a 4-year apprenticeship and hold several certifications for specialty work, including welding and safety training.

Let me make it clear that in every construction job I have held, union or nonunion, I do good work. I work hard and I apply my considerable training and experience faithfully. There is no way I can establish credibility with my employers or coworkers unless I do good work. But during non-work hours, I will talk with my coworkers about the benefits of unionizing.

In my capacity as a job site organizer, I also have some training. I was taught by my union about the basic rules of organizing: To do good work, identify the job-related issues of my coworkers, communicate the basic rights which workers have in this Nation, and motivate other workers into action.

I think this is about as American as it gets. On many occasions in my role as an organizer, my employers have violated their employees' rights under the National Labor Relations Act. I believe that any employer who violates this law should be held accountable. Therefore, I carefully document several incidents and participate in proceedings before the National Labor Relations Board.

I did not entrap these employers into violating the law. Believe it or not, some construction companies break the law without any prompting by their employees. I simply was a worker who knew his rights, did a good job, and urged other workers to organize and unionize.

Some construction industry spokespeople have suggested that salts such as myself have some ulterior, sinister motive. It is my experience the opposite is true. Some construction companies literally terrorize workers by threatening to fire them if they try to organize, diminish their value, and humiliate their legitimate aspirations for a better life through unionizing. Sometimes these companies even sponsor violence against workers. I personally was knocked unconscious by a management representative who objected to my lawful organizing activities. He fled the State of Michigan before law enforcement authorities could catch up with him. There remains a warrant for his arrest in Michigan.

In summary, please understand that I am proud and unapologetic for my work as a union organizer. I am bound in friendship with many construction workers whom I have helped become union members. They and their families now have higher standards of living, health insurance, and protection for their retirement years. Their employers have the security of a stable, productive, and harmonious workforce.

I think this is good for our industry and good for our Nation. If the committee would so choose to see, I have some documents that the International Brotherhood of Boilermakers use when they have authorization for representation, and I think you will find that we have 10 points here that we use that we give to the organizers:

Organize only on your own time before work, after work, and on breaks;

Take notes on any threatening statements or actions by your supervisor;

Arrive at work on time;

Do not leave before the scheduled time;.

Perform a fair day's work for a fair day's pay;

Do not engage in any sabotage or ruin any company property;

Report any company harassment;

Do not lose your temper;

Always conduct yourself in a controlled and orderly manner;

Report any deviation of company discipline;

Attend organizing meetings and give guidance to your people.

With this finished statement, I would like to thank you again for giving us time for this hearing. That concludes my statement at this time.

Chairman Fawell. Thank you very much, Mr. Parcell for your testimony.

written statement of patrick parcell, member, boilermakers local 169, dearborn, mi, on behalf of the building and construction trades department - see appendix E

Chairman Fawell. Mr. Peter Kraft.

Mr. Kraft. Good morning, Mr. Chairman, and members of the committee. As indicated, my name is Peter Kraft. Thank you for the opportunity to talk this morning.

I am going to stray a little bit from my prepared text. I think it, hopefully, will make it a little more interesting. I have practiced law in the State of Maine since 1980. The focus of my practice is representing employers. I have many, many dealings with unions throughout the State, many different kinds of unions, and I have always had what I think of as a fairly good relationship with the unions. Since 1992, I have witnessed widespread salting abuses, and in all but one instance, it involved very small contractors with anywhere from 2 to 15 workers. In the past 5 to 6 years what I have gleaned from this is that salting is not a genuine effort to access to NLRB's electoral process.

The best example I can supply to verify that is the case I was involved in representing a company called Bay Electric. The individual who owns this organization, a very small contractor in Cape Elizabeth, Maine, was a member of the union for 15 years. He was a member of Local 567, an IBEW local out of Falmouth, Maine, and he was an excellent master electrician_so good, in fact, that he was an instructor for the journeyman's apprenticeship program and also participated in some of the union's committees: the pension fund, planning group, et cetera.

After 15 years, he took the plunge and decided to go into business for himself. When he did, he immediately signed on as a signatory. From 1985 to 1992 Mr. Melman was not only an active unionized employer, but he also served on many of the union's boards and committees and was a regional representative to their New England Joint Council.

In 1992 he had a very difficult year. He was pressed. He didn't have the funds to be able to pay people the union rate. He went to the union and said, I can't participate any longer, and instead of getting some sort of relief after 22 years, Mr. Melman became a victim of salting from 1992 to 1997.

In 1992 when he first walked into my office, I didn't know a thing about salting. I had represented employers for quite a while. We had occasionally run into cases where there was discriminatory conduct. Employers had to answer to the NLRB and the law was upheld. In other instances, people were wrongly accused and I defended them.

The problem with the salting initiative is that actions speak much louder than words. During the course of 1992 to 1997, there was no election petition that was filed seeking to organize his workers. On the other hand, there were 14 unfair labor practices filed, all of which were nonmeritorious.

The title for the tactic is printed in their own printed bimonthly journal, called the Labor Record, which is their newspaper that they put out to all their membership. They make very clear statements that their intent is not to organize through an electoral process; it is to bludgeon employers with recurring charges by requiring them to waste their time, money, and effort, and waste the resources of some of these very small contractors who simply are not able to stay in business and achieve that.

In one charge, one of the 14 charges did go to complaint; we did go to hearing. We won that case; and in the long run, we not only won the case, but we were able to return EAJA funds when the government went to appeal the administrative law judge's decision, went to the Board, and they lost there as well.

I don't have a problem with union organizing in any way, shape, or form. If I stood in front of you and cried and yelled at you, it would be crocodile tears. I have made money from union attempts to organize, presenting the other side of the picture, but I have a very, very significant problem with the salting process, which has nothing to do with employee freedom of choice.

Workers in all of these nonunion establishments have heard of unions. They have some clue as to what their programs are. It would take very little for a union to go to their job sites and present their packet: These are our wages, these are our fringe benefits, these are our job protections.

The dilemma is that instead of looking at the access question and saying, "Are these workers accessing the union message," the NLRB is being used as a whipping post where nonunion employers are having to defend themselves time and time and time again and are unable to do anything about it.

During the course of this entire time frame, we wrote, I must say, five to seven to eight letters to Rosemary Pye, the head of Region I, saying, "Here is another salting charge. This is frivolous. This is the fifth one we have seen. This is the sixth one we have seen. We need relief."

We didn't get any. They said, yes, these six charges have not been meritorious, but maybe the seventh one will be, maybe the eighth one will be. So there was no way that the NLRB could police this process.

That is why 758 is being introduced. There is a need to be able to identify when somebody is a bona fide applicant, when somebody would organize workers or be sympathetic to the union cause, but also wants to consider being a career

employee with that particular employer.

It seems very, very clear to me in all my experiences that the objective of salting is to truly distort the hiring process and cause economic harm to nonunion employers, and it bypasses the NLRB's most fundamental purpose, which is to let the workers choose.

With respect to the FAIR Act currently, the standard for NLRB litigation is that if there is substantial justification for them to pursue an action, the employer won't recoup his defense costs if the NLRB has sufficient justification to pursue the litigation. That is simply an untenable standard for a small employer. An employer who is at risk, whose business is at risk, can go forward and try his or her best to defend themselves and fail, because simply because they proved they were right, they cannot afford to fight.

There is something very, very wrong about that. I believe the two bills before you, the Truth in Employment Act and the FAIR Act, addresse this. I support them completely.

I regret the fact that the NLRB has become a litigation playground. I can personally attest to that fact.

Thank you very much.

Chairman Fawell. Thank you for your testimony.

written statement of peter kraft, partner, kraft & winger, portland, me - see appendix F

Chairman Fawell. We do have votes on the House floor, so the Chair will declare a recess. I will estimate 15 minutes, but one never knows. So we will go into recess and we will be back as soon as possible.

[Recess.]

Chairman Fawell. The subcommittee will come back into order.

At this time, I believe Mr. Rousos is next on the firing line. The Chair recognizes Mr. Peter Rousos.

Mr. Rousos. Thank you, Mr. Chairman, and members of the committee. My name is Peter Rousos. I am the Director of Corporate Human Resources for Gaylord Entertainment Company in Nashville, Tennessee. I have also been a member of the U.S. Chamber of Commerce Labor Relations Committee for several years, and I serve on a number of its subcommittees.

I have been engaged in a private law practice for approximately 8 years, and during that time, my principal clients were small businesses.

Mr. Chairman, I am pleased to testify before the subcommittee. You asked me to concentrate on the Fair Access to Indemnity and Reimbursement Act, and I will.

Several times in my experience I have seen legal contests between the NLRB and small employers turned into offensive weapons. Those contests always begin with a charge filed by an individual or a labor organization, usually supported only by affidavits from other employees, former employees, and union agents.

Following the filing of such charges, the Board conducts an investigation. The employer is then required to provide evidence to the Board typically involving the production of personnel records and other business records, and also the rendition of critical events by a representative of the employer. Accumulating and providing the information requested by the Board in an investigation of this sort is time-consuming and is a very expensive process in terms of time and money. This is particularly true for small employers.

But the issue is a more serious one than just inconvenience. NLRB proceedings are complex and well beyond the experience and expertise of small businesses. Employers not represented by legal counsel may and often do unknowingly make procedural errors that prejudice their efforts to prove that a charge is not meritorious. Accordingly, when faced with a charge and almost certain investigation by the Board, most employers immediately seek legal advice and/or representation. The involvement of an attorney to represent the employer is a necessity.

Meanwhile, the charging party, whether an individual or a labor organization, invests little more than the time necessary to render an affidavit to the investigating Board agent. There is absolutely no need for the charging party to have legal representation at any stage in a Board unfair labor practices proceeding or the investigation and trial that follow.

The filing and pursuing of an NLRB charge is essentially essential cost-free to the charging party and extremely expensive for the respondent. The situation gives the charging party a handy weapon with which to exert tremendous financial pressure on the small employer.

The Equal Access to Justice Act provides that small firms with fewer than 500 employees and less than $7 million in net worth may request the Board to pay their legal fees and expenses when they prevail in an administrative adjudication. EAJA also provides that the Board can avoid paying these fees and expenses to the prevailing small business if the Board shows it was substantially justified in prosecuting the matter. Unfortunately, the Board has claimed substantial justification for its actions in most cases brought under EAJA. A prevailing small business must file a petition, another costly legal action, for reimbursement of its legal expenses under EAJA and then face the prospect that the Board will usually prevail in its claim of substantial justification.

Accordingly, most prevailing small businesses do not even file for EAJA reimbursement. An average of only 10 applications are received by the Board during each year, in 1997 and 1996, which I believe is a telling statistic.

It is obvious that EAJA does not level the playing field, the judicial contest between the NLRB, with its army of well-trained investigators, experienced litigators, and vast financial resources which are to be devoted to litigation, and the smallest firms which EAJA was designed to protect. The FAIR Act creates special rules for the smallest one-fifth of employers now covered under EAJA, those least able to fund a defense against the Board. Other provisions of EAJA would continue to apply under the FAIR Act.

The bill will effectively require Board officials to more carefully investigate and present evidence in actions against small businesses. This requirement will encourage more careful preliminary deliberation by NLRB officials, especially when it may be readily apparent that the charging party's true motive is merely coercion or harassment of the small employer.

The failure to conduct a more thorough assessment of the case should have a fair result. It would require the NLRB to compensate the defendant for the cost of the frivolous litigation.

Mr. Chairman and members of the Committee, the Fair Access to Indemnity and Reimbursement Act, which the Chairman introduced, provides the needed incentive to NLRB officials to more carefully assess their evidence before bringing a small business into court. Your bill will improve enforcement of the act while guaranteeing fundamental fairness to the parties. A government agency and a government proceeding should not be used as a strategic weapon by one private party against another, and the law should be changed to assure that that will not happen.

I want to emphasize that these types of proceedings are extremely disruptive and difficult for small businesses. Typically, in a small business, it is not only the money involved; it is the time. It is the fact that it diverts a small group of people in a small business from their primary activities, which is running that business, which is ultimately in the interest of all employees of that business, into an administrative proceeding that is not in any way value added. That is not to say that happens in every instance, but it happens too much.

I think the FAIR Act is a way that they could at least be partially compensated for the time and the expense they have incurred in proceedings like this.

Thank you for allowing me to testify on behalf of the U.S. Chamber.

Chairman Fawell. Thank you, Mr. Rousos.

written statement of Peter c. rousos, director of corporate human resources, gaylord entertainment company, nashville, tennessee, on behalf of the u.s. chamber of commerce - see appendix g

Chairman Fawell. Now Mr. Richard Griffin.

Mr. Griffin. Thank you, Mr. Chairman and members of the subcommittee. My name is Richard Griffin. I am the General Counsel of the Operating Engineers Union, and I am here testifying on behalf of the AFL-CIO with respect to the legislation in front of the subcommittee.

With respect to the Truth in Employment Act, I want to echo Mr. Parcell's prior testimony, with which the AFL-CIO fully agrees and supports. In our view, that bill is nothing more than an effort to legalize discrimination against building and construction trades workers who have elected to join a union in order to frustrate those workers' abilities to assist others in organizing unions.

So with the committee's indulgence, I would like to focus on the other three matters that are before you. First, I want to respond briefly to the contention advanced by some of the prior witnesses that the playing field under the National Labor Relations Act is somehow tilted in favor of unions and the right to organize.

I think it is fair to say that the evidence belies such testimony. If you look to the conclusions reached by the Dunlop Commission, a bipartisan commission which heard months of testimony, what they found describes serious abuses under the current administration of the National Labor Relations Act; 10,000 workers per year are unlawfully fired by their employers simply for attempting to exercise their right to organize. Thousands of charges over these filings are filed, and the underfunded, understaffed NLRB has insufficient resources to pursue them, and those charges languish for months or years, long after organizing campaigns are over.

The remedies the NLRB has available do not include liquid damages or class actions to courts, deficiencies that the Dunlop Commission pointed out. Disclosure requirements that would obligate employers to inform workers of their rights against discriminatory firings are nonexistent, and even where a majority of workers vote to have a union, one in three employers refuses ever to agree to a first contract. Suffice it to say, this litany does not describe a playing field tilted in favor of unions or the right to organize.

Turning now to the three bills, first, H.R. 1598, the Justice on Time Act, starts from the right premise. Under current practice, employees who are illegally discharged must wait too long to secure a remedy, and this delay has an inevitably chilling effect on employee rights under this section of the Act.

H.R. 1598 takes a step in the right direction by requiring the Board to resolve cases of unlawful discrimination within 1 year of the filing of the complaint, but it does not go far enough. We respectfully suggest two additions to the bill and one caveat.

First, final orders of the NLRB in discrimination cases_in fact, in all cases_should be self-enforcing unless affirmatively stayed by a court. Under current law, as you know, the Board must go into the Federal circuit courts of appeals to seek enforcement of its orders. The delay inherent in the court process greatly weakens the effectiveness of the Board remedies. The bill before you addresses the issue of delay at the NLRB, but doesn't say anything about the additional delay in the Federal courts, so we suggest self-enforcement of Board remedies.

Second, Congress should follow the unanimous recommendation of the Dunlop Commission and extend section 10(l) of the Act to cover unlawful discharge cases. Such an amendment would assure that within days of a charge being filed, an initial determination is made as to the merits of the charge, and if the charge is meritorious, interim injunctive relief in a Federal district court is sought pending final adjudication by the Board.

With these two additions, the AFL-CIO would support H.R. 1598, providing_and this is a very important "providing"_that there was sufficient funding of the Board to assure that the bill's requirements could be carried out and that this would not become another unfunded mandate.

With respect to the Fair Hearing Act, H.R. 1595, the AFL-CIO opposes this bill. The bill is intended to codify past appropriation riders which have prevented the Board from proceeding with its proposed rule-making in the area of single location units. The statute currently leaves for the Board the determination of whether a proposed bargaining unit is an appropriate unit.

A unanimous Supreme Court decision in the American Hospital Association case endorsed rule-making as one way for the Board to make this determination. When it decided to try rule-making on the issue of single-location units, the Board recognized the issue as one where its prior case law did not provide adequate guidance, and one which was a recurring issue. It would be appropriate for the type of rule-making endorsed by the Supreme Court in the AHA case.

H.R. 1595 would block the proposed rule-making and require an examination and a hearing of 10 separate factors in each of these cases. The 10-factor test proposed in the legislation is indeterminate, would generate legal confusion, and consequently, would generate needless litigation. That needless litigation will prejudice workers in their ability to organize.

Moreover, required for consideration under this legislation, prior case law suggests that only a few of these factors are determinative in the majority of the cases.

Finally, with respect to the Fair Access to Indemnity and Reimbursement Act, H.R. 2449, this bill proposes a departure from the American Rule, the rule that governs almost all other litigation by parties, where each party to litigation pays its own expenses; and it proposes that departure for only one category of cases, cases brought by the Board's general counsel.

No reason has been advanced to justify this particular exception. The reason that most Board cases settle is not because the respondents are deterred from defending by the expense involved. The primary reason for settlement, regardless of whether the respondent is large or small, union or employer, is that remedies under the act are so weak, there is frequently settling by agreeing to comply with the law in future or pay minimal back pay without even admitting the wrongdoing. There is no evidence that the supplement rate for small employers is related to the expense of litigation.

With respect to the other rationale stated for the bill, that it will make the NLRB accountable, EAJA already does that by making the Board accountable where a complaint is not substantially justified. No rational public policy is advanced by penalizing the Board where the complaint is substantially justified, but the general counsel is unable ultimately to carry the burden of proof. The policy advanced by the bill would inevitably chill the filing of meritorious complaints in close cases.

Finally, unless H.R. 2449 were accompanied by an increased appropriation to pay the fee awards provided for in the bill, the bill's net effect would be to further diminish the resources the Board has available for the enforcement of the act. Since 1980, the Board has suffered a 30 percent cut in its staff, while its caseload has increased by 50 percent. Any further reduction in resources would further penalize the working men and women who depend on the NLRB to uphold their rights under the act.

Thank you for the opportunity to testify, Mr. Chairman.

Chairman Fawell. Thank you for taking your time to be here to testify.

written statement of richard griffin, general counsel, international union ofoperating engineers, washington, d.c. - see appendix h

Chairman Fawell. Ms. Goodman.

Ms. Goodman. Thank you, Mr. Chairman, and members of the subcommittee. My name is Arlene Goodman. I am from Nashville, Tennessee. I am here today as a representative of the International Franchise Association.

The IFA is the oldest and largest trade organization representing franchising, with nearly 500 franchisor members and with franchisee members operating more than 30,000 franchise units across the United States. I am a founding member of the IFA Advisory Council for Franchisees, and I am currently a member of that executive committee. I have been actively involved in legislative activities within IFA and through the National Federation of Independent Business, in the past year, of the Tennessee Leadership Council, which represents over 11,000 small businesses in Tennessee. The NFIB stands in support of this legislation.

As a businesswoman, I am a franchisee of Campgrounds of America, and I have previously served as President of their National Owners Association. I also currently act as a franchise development and small business consultant. Franchising is a big part of the larger community of small business, where two out of three people land those important first jobs.

If we were our own country, U.S. small business would rank as the world's third largest economic power. We are right behind only the U.S. as a whole and the entire country of Japan. We are producing half of the private sector output, and account for $2 trillion in gross product annually. We have been the breeding ground for the greatest innovations in the 20th century.

A recent Gallup survey asks, of the eight major sectors of American life, who has a positive influence? Of the most influential groups in this country, small business was viewed as having the most clout.

As a representative for small business, I am here today to voice my support for the Fair Hearing Act. This Act would amend the National Labor Relations Act to clarify and confirm that NLRB shall conduct a hearing to determine the appropriateness of the bargaining unit in cases where a labor union or organization attempts to organize employees at one or more facilities of a multifacility employer and where there is no agreement between the employer and the labor organization as to the appropriateness of the bargaining unit selected by the labor organization.

The Fair Hearing Act is equitable, simple, straightforward, and does nothing more than codify the decades-long practice of the NLRB in resolving, by hearing, disputes as to the appropriateness of the bargaining unit in cases involving multifacility employers. The Fair Hearing Act would not change existing law, but would preserve the status quo.

As the subcommittee is aware, the status quo that would be preserved by the provisions of the Fair Hearing Act is today threatened by a proposed regulation of the NLRB. This regulation would significantly alter the decades-long practice of the NLRB of resolving, by hearing, disputes involving the appropriateness of the bargaining unit. This would only be the case in instances when a labor organization attempts to organize one or more facilities of a multifacility employer, and the employer believes that the bargaining unit selected by the labor organization is not appropriate.

The proposed regulation, which was first published for comment in 1995, would abandon the historic case-by-case approach to this issue in favor of application of a three-pronged test. The NLRB's proposed regulation would apply to all employers exempted, those engaged in three specified industries_utilities, construction, and marine trades.

Except for employers in those industries, whenever a labor organization petitions for election at a single facility of a multifacility employer, three criteria would be applied in determining whether the single facility is an appropriate bargaining unit. The three criteria are: one, that 15 or more employees at the petitioned facility are employed at that location; two, that no other location of the same employer is located within one mile of the petitioned facility; and three, that a statutory supervisor is present at the petitioned facility for some period of time. If these three criteria are met, then absent highly exceptional circumstances, the employer would no longer be required to present evidence, testimony, and arguments in support of his position as to why the single facility should not be deemed the appropriate bargaining unit.

Despite overwhelmingly negative comments that were filed with the NLRB in opposition to the proposed regulation, there were strong indications that the NLRB intended to move forward with final promulgation of the proposal. However, during the course of the past 2 fiscal years, the NLRB has been prevented from moving forward with finalization of the proposal due to specific provisions contained in the NLRB's appropriations legislation. As a result, the proposal has never been finalized, although there is ample indication that the NLRB does intend to do so when its funding restrictions expire at the end of the current fiscal year.

The passage of the Fair Hearing Act is particularly important because it would ensure the opportunity for a case-by-case evaluation in situations where there is a dispute as to the appropriateness of the bargaining unit of a multifacility employer. The legislation would ensure the availability of a hearing and an employer's right to present evidence and testimony about why it believes that a different bargaining unit should be deemed the appropriate bargaining unit for purposes of an election. The factors and criteria examined in such hearings held over the course of the past 4 decades include issues such as functional integration, centralized management and control, common skills, employee transfers, and bargaining history. A hearing with the associated right to produce evidence of the total approach to human resource policies and procedures that are utilized by most employers today, will allow for a more thorough and complete examination of the total approach to human resource policies and procedures that are utilized by most employers today, especially those operating multifacility employment sites.

Most multifacility employers, especially those in the retail industry, utilize centralized wage and benefit structures, instruction, hiring policies, training and other personnel policies. Most multifacility employers also utilize centralized advertising, financial controls, budgeting, operational policies, promotions, transfers, and personnel benefits and work rules policies. Under these circumstances, a single facility is not a stand-alone, independent operation, but rather, it is one component of a multifacility employer's business, and is very much operated under centralized policies and procedures. These very issues have been the focus of the individualized case-by-case approach that the NLRB has utilized for decades in determining when a single facility of a multifacility employer is or is not appropriate for bargaining unit purposes.

All that the Fair Hearing Act would do is preserve this opportunity for hearing and presentation of evidence as to these issues. It is vitally important that the status quo in this area of the law be preserved, as it is readily apparent that the current leadership of the NLRB is prepared to dramatically alter the status quo by moving forward with its proposed regulation.

In conclusion, I ask that the subcommittee support the Fair Hearing Act and take appropriate steps to move the legislation forward.

Chairman Fawell. Thank you, too, for your testimony.

written statement of arlene goodman, president, goodman & company, brentwood, tennessee, on behalf of the internationAL franchise association - see appendix i

Chairman Fawell. I wish time would permit that we could propound a whole lot of questions here. I would like to put a question to Mr. Kraft, but others who feel compelled, don't hesitate to put your answer in, too. It pertains to the Truth in Employment Act.

According to my notes here, let me just quote Tom Cook, who asked the question, "Does a paid agent with ulterior and destructive motives actually meet the definitions of an employee, as previously ruled by"_actually, by "the Supreme Court?"

Well, I hope not. I do not think anybody really believes that that is what the Supreme Court meant, although they did indicate, that definition of "employee" does include an applicant.

Mr. Parcell also quite honestly said that "I applied for employment with, and was hired by, nonunion construction companies. I did so for the purpose of lawfully organizing my coworkers and the employers into collective bargaining."

He also said in that quote, "Salting means to me nothing more than union organizing," salting being basically an application for a job.

My question to Mr. Kraft is, what do we do when that is the reason for somebody applying for a job? That is, certainly we all want to protect the right of people to collectively bargain and organize, but when that is the reason for applying for a job, how do we handle that?

In your testimony and in other testimony it is brought out that in many instances the motive for the application isn't even to collectively bargain, it is to become an employee and then report on every potential unfair labor practice you can find, and tie up and sometimes destroy the business. I am not saying that latter motive is real commonplace. I do know from firsthand experience where it happened.

But what we are trying to do with this legislation is to say that we support the Supreme Court's decision that an employee has these rights to collectively bargain, but how do we handle the situation so that people who don't really want to work at that place of business just have to be hired?

How do we weed it out, Mr. Kraft? In our legislation, we have now changed it to say_we are talking about a bona fide applicant. If you are a bona fide applicant, okay. That is a factual decision that a court has to reach. I will bounce that ball to you.

Mr. Kraft. I think that lies at the heart and soul of the proposed legislation. In the Town and Country decision, I think the court struggled with that a lot and there was some dicta in which they said, there has to be a mixed motive.

There was a discussion saying that somebody who, with the intent of organizing, may actually choose to abandon that and become a career employee. When you use the term "bona fide applicant," I think you have addressed this distinction with those different words.

I mentioned in my printed materials briefly some statements in the Labor Record, which is the newspaper put out by the trades unions in Maine. They say that you can gain thousands of dollars for a couple of hours work. All you have to do is fill out an application. I think that is clear evidence of somebody who doesn't intend to make a career change away from a union job.

I think what the legislation hopes to accomplish is some test or analysis of what an applicant's true motives are. I think it sets up the ability for the NLRB to examine that question and see how many places the individual has applied to and whether they can support a claim that they in fact want to make a true career change and attempt to become employed and stay with that employer.

One of the observations that was made -and this is quite a dilemma with smaller employers- a union organizer who is hired, does his very best job, spends all of his time committed to performing 100 percent and satisfying an employer's needs, after 2 or 3 weeks may discover that he is not going to be successful. At that moment in time, he leaves.

Now, if I am an employer, and especially a small one, I have a very serious problem, because I need staff. At that point in time, the motives that diverged, and an individual's true motive has come to the fore. I have had that happen to me in several instances, where the people who were hired, who attempted to organize, failed and then left. If they were to come back for reemployment, clearly that employer should be able to say, well, you didn't stay with me long enough the first time. Your true motive was to organize, and they can prove it. So they would not have been bona fide applicants and the evidence would have reflected that.

Chairman Fawell You had pointed out in your experience that in many, many instances there was absolutely no effort ever to organize. I think several of those who have testified have said this. You have had made the statement that the union never did even file in the NLRB's regional office in Boston. The indications that they had any intention whatsoever to try to organize were not there. It is a problem, and perhaps others have some comments.

In the time I have, and I am already over my 5-minute mark, which I am notoriously known for avoiding anyway_Mr. Krupin, I am going to put a question to you. Perhaps you might want to respond to the end of this question, too.

Now, let's go back to the Fair Hearing Act, where, as I understand it, Chairman Gould is basically abolishing decades of precedent in regard to single-site organizing where a unit would be automatically approved whenever a site met one of three conditions: Did they have 15 employees or more? Was there another company located within a mile? Did it have at least one supervisor?

As Ms. Goodman pointed out, most multifacility employers also utilize centralized advertising, financial controls, budgeting, operational policies. To my mind_and I am not an expert in this_but it seems astounding to me that you would try to wipe away decades of experience in determining what is a gut issue, the particular bargaining unit, which is very, very important. I suppose if you wish to bargain, you could define a site as including one or two people, and eventually gobble up the entire place of business.

Is there any fairness to this, to this concept, that we are not going to have hearings on this when there are differences? We are just going to have an in post facto conclusion, if you meet any one of those three little tests?

Mr. Krupin. As it stands today, it very well may be that a single site is an appropriate unit, but there are indications that sometimes multiple sites are appropriate units. As I stated in my testimony, sometimes a portion of a single site is an appropriate unit.

The idea of having a doctrine that says that when you have three limited circumstances, three limited criteria are met means that you would automatically have a specific unit determination, basically throws away any sense of fairness, any sense of indication of the facts. The very fact that we are here and you are listening to us and trying to gather facts is because you know that you have to get information from other people and get different materials from people with different views.

Well, the Board would do just the contrary. Sometimes a single site is appropriate, but you have to get the information.

What we have found, at least in the industries that I represent, which are sometimes small businesses such as restaurants, is that you cannot just make a blanket statement because of the community of interest, because of the overlap with other operations. Where the unions now are seeking to represent even a portion of that single site, I don't really believe that the issue here is what is the unit. I think the issue is time.

I think the real concern here is that the Board views these types of cases as prolonging the organizing process. This is a way to reduce that process, to reduce the time.

Chairman Fawell. And yet the question, the vital question, what is the appropriate unit, is obviously one that does need continuous review of the facts, and I would assume as we go into the 21st century and the dynamic revolution that is occurring in the place of employment, that to try to come down with three little findings to me is more evidence of the fact that, unfortunately, the NLRB that we have had in the last 4 or 5 years perhaps is even more political than this committee on the subject of labor management.

It is very unfortunate, because any adjudicatory entity has to have that dignity and that respect that is so crucial, which the courts, by and large, the Federal court system, does have. Some Federal employers tell me the only chance they have is to ultimately get into the court of appeals. So I wouldn't go along with that subchapter L suggestion that Mr. Griffin would propose.

My time is up. I am going to recognize the gentleman from New Jersey, Mr. Payne. Although we sometimes differ on matters, we also at times do agree on matters. He is a fine gentleman.

Mr. Payne.

Mr. Payne. Thank you very much. We did agree on the SAVER bill. That was history-making. I want to agree with you that I should take the same amount of time you took, which was 11 minutes.

Chairman Fawell. The gentleman is recognized for 11 minutes.

Mr. Payne. I will give you the prerogative of the Chair and I will take 10 percent less. I will take only 10 minutes. You do have certain privileges.

I would like to simply ask Mr. Griffin, does the NLRB have any experience with single-site bargaining unit rules?

Mr. Griffin. They do have, as the Chairman had previously indicated, quite a bit of experience through the case-by-case adjudication process of developing rules with respect to single sites. The thing that I think is important to recognize here is that what we are talking about is not whether the single location unit is the appropriate or the most appropriate unit, but whether the statute gives to the Board the job of determining whether the petitioned-for unit is an appropriate unit.

The proposal suggests that where there is a petition suggesting that the single location is an appropriate unit, the Board adopt a rule to expedite the processing of such petitions.

The precedent for that type of rule is the rule that was adopted in the health care industry with respect to appropriate bargaining units in the health care industry. After a number of hearings and quite a bit of testimony from industry and from employees and the various unions involved, that rule_which was approved unanimously by the Supreme Court in the American Hospital Association case, he has done a good job in reducing litigation and giving certainty to all the parties to know where they stand with respect to whether a petitioned-for unit is an appropriate unit.

I would submit that the experience that the Board has in the health care industry with the health care bargaining unit rule is support for the proposition that was advanced initially by the Board and which this bill seeks to fend off.

Mr. Payne. Thank you very much.

Let me ask you, Mr. Parcell, you indicated that you were knocked unconscious by a management representative. We often hear about, you know, bad union people that, in some instances, get unruly, but we never hear about the other side much. I am just curious to know about the circumstances surrounding your being knocked unconscious by a management representative.

Mr. Parcell. Thank you, Mr. Payne.

The representative that attacked me was for another subcontractor on site. I was doing organizing efforts for the Stanley Jones Corporation, and I went to the material yard to pick up a piece of material. I came back in through the opening in the building that was designed to bring in material. I had a piece of pipe on my shoulder. He verbally abused me and when I turned to walk away from him, he assaulted me while I had a piece of pipe on my shoulder. I was rendered unconscious.

When I came to, one of the supervisors for Stanley Jones assured me that I was okay. They brought an ambulance in, strapped me up, took me into the hospital, and I was at home for 5 days recuperating before I could return to work to Stanley Jones.

Subsequently, the prosecutor issued a warrant for the man's arrest, the supervisor's arrest. He attacked me at 8:30. The gate records show that at 8:32 that he had left the site with all his personal belongings. So we assume that it was preplanned.

Mr. Payne. Thank you very much.

Let me ask Mr. Griffin again, Mr. Kraft implied that the unions have equal access to employees. Is that an accurate assessment?

Mr. Griffin. I think the testimony you are referring to was the testimony that asked, why the union doesn't just show up on the job site and present its argument to employees. As a result of the Supreme Court decision in the Leachmere case, union organizers don't have rights of access to property. The employer can promulgate a rule that says, "This is private property; you are not entitled to come on the job site." And so the notion that the union can just show up and get access to employees on the job site is precluded by that Supreme Court decision.

So the way that the union seeks to communicate to the workers the benefits of unionization is by discussing with fellow employees and developing either an in-group committee, or the term "salt", where you have someone who is knowledgeable about the benefits of unionization, who is an employee, and who can explain them to his or her fellow employees.

Mr. Payne. Thank you very much.

Let me ask you, Mr. Kraft, your testimony focuses on the filing of frivolous claims. Now, would it be fair to say that frivolous charges are your primary concern, maybe not necessarily the individual status of a union organizer?

Mr. Kraft. My concern really has to do with the fact that the intent of salting, which operates under the guise of organizing, doesn't intend to result in an election, it intends to result in unfair labor practice charges, rather than petition. That has been my experience. If there was a true intent to access the electoral process, it seems to me the elections would follow.

Plus, I don't have to really guess at the union's motive. I mean, the words that I spoke that were printed in the Labor Record were the union words, not mine. They said, we are going to file all of these charges. It didn't say anything about filing a petition. So I do not think I have to guess at what their true intent was.

Mr. Payne. Okay.

Let me just ask Mr. Parcell a question about your employment. How many employers have you worked for in these jobs?

Mr. Parcell. This year I have had six employers. On any given year_six to twelve employers would be an average number in any given year.

Mr. Payne. Is career employment with a single employer common in the construction industry?

Mr. Parcell. Common? No, sir, I would say it is uncommon. As you are hired for a particular project, manpowers peak and decrease. You can be hired for a job, you fulfill your job, the contractor no longer needs your services, and he reduces his workforce proportionately to his needs.

Mr. Payne. So actually, even in some instances where people assume that salting is going on, many men just rotate from job to job. When a job is over, they are looking for other work, right?

Mr. Parcell. That is correct.

Mr. Payne. I get concerned about prohibiting an individual from going on a job site because in your mind you think he or she is a union organizer. As a matter of fact, years ago_this is bringing back the old days again_years ago in employment a lot of companies, especially in blue collar work, people would be asked, are there any union members in your family, as a prerequisite to employment. If, in fact, you had a family member_a father or an uncle or whatever_who was a member of any union, that would be used against the potential applicant.

So it appears to me that if we are talking about restricting people from working on a site because they are affiliated with a union, it appears to me that you are taking away the right of an individual.

But let me just conclude. I think I have used about 8 minutes or 9 minutes.

Yes, go ahead, Mr. Parcell.

Mr. Parcell. I have a follow-up statement on that, also. This holds true not just with salting or union organizing; this holds true in the union sector also.

As union contracts, as their work load is increased or decreased, they also adjust their workforce accordingly. So you have union members that will work for a contractor for any period of time as long as he offers them employment.

Mr. Payne. Thank you. Let me just conclude. I would like to ask that the written statement of Mr. Georgine, President of the Building Trades Union, be submitted for the Record in opposition to H.R. 758.

Chairman Fawell. Without objection, it will be so accepted.

written statement of Mr. Georgine, president of the Building trades union, washington, d.c. - see appendix j

Mr. Payne. Finally, listening carefully to both Mr. Fawell and Mr. Kraft, it seems like they are saying that only bona fide employees should be protected by labor laws, and not bona fide should not. Their test seems to be one of how long an employee will work for a given employer or a particular firm.

I think we need to be really careful when we, in our minds, conjure up what a bona fide employee is, because many of you may know that years ago we had this sort of certitude where, as a matter of fact, at one time you had to have a contract with your employer. And in particular, after the Civil War, slaves had to sign a contract to work that year on the plantation. They couldn't leave. They were a bona fide employee, but it was against the law to break your contract. You had to work at that place for life.

I get a little queasy when I start hearing about determinig who are bona fide employees.

I just wanted to mention that. I think my time has expired.

Chairman Fawell. The Chair recognizes Mr. Talent.

Mr. Talent. I thank the Chairman.

I thank the witnesses, Mr. Chairman. I have not been able to be here for everybody's testimony, but I have tried to read the testimony.

Mr. Parcell, I would like to ask you some questions. You were one of two people here who saw this from the inside. That is something that we need information about here, because we hear from lawyers and policy scholars and that sort of thing, but not as much as maybe we would like from people who see it in real life.

Let me ask you some more questions about your experience. You said you have worked, say, in the last year for about six to twelve different employers?

Mr. Parcell. This past year I have worked for six employers.

Mr. Talent. Six? How many of those places did you organize?

Mr. Parcell. This year the six that I worked for were union contractors.

Mr. Talent. So let me go back to when you were acting as a job site organizer for the union. How many places did you go to work at to organize?

Mr. Parcell. I organized on one site and applied for two more that particular year that I was denied.

Mr. Talent. You actually only went to work as a job site organizer at one site?

Mr. Parcell. That's correct.

Mr. Talent. Okay. So, was this a part-time thing that you did for the union? What was the status?

Mr. Parcell. I am a voluntary union organizer. I am not paid to organize.

Mr. Talent. Does your union have people who do this on a more regular basis?

Mr. Parcell. We have one gentleman that covers the State of Michigan that is a union organizer-coordinator for the Boilermakers.

Mr. Talent. That would be good, to talk with him.

That work site that you did go to work at_and I understand your testimony and don't doubt for a second that you always gave a day's work for a day's pay, but I want to distinguish between that work site and the ones where you were not going with the motive of organizing. The one that you went to with the motive of organizing, as well as working, how many charges did you file in that workplace with the Board?

Mr. Parcell. I believe I testified four times before the NLRB agent.

Mr. Talent. Okay. I am not trying to get into a technicality.

Do you know how many charges were filed in connection with organizing at that work site?

Mr. Parcell. No, sir, I don't have those figures presently with me.

Mr. Talent. You didn't file any personally? I assume you would remember if you filed some personally. You go down to the Board and sign the charge and all that stuff. Did you file any yourself?

Mr. Parcell. I worked with an agent from the NLRB, Patrick Lamity, and also with my organizing agent from Michigan. In conjunction with him, the charges that I was involved with were filed through him.

Mr. Talent. You don't remember how many there were?

Mr. Parcell. No, sir.

Mr. Talent. What happened in the election at that place? Did you guys win or not?

Mr. Parcell. If I can make a statement, there was no election at that particular site. There was charges filed. There was a $1.1 million settlement that Stanley Jones and the other contractors on site did comply with.

Mr. Talent. Okay. Mr. Cook gave a very different picture than you gave. If you have only done this at one site, then you are not going to have a really broad sample for us to be able to work from. But I am trying to get at what I can.

What you are saying is, there was no representation election at that workplace; is that correct?

Mr. Parcell. That is correct.

Mr. Talent. The settlement did not include an agreement on the part of the employer to bargain with the union?

Mr. Parcell. That is correct.

Mr. Talent. Okay. Now, I take it from what you said in your written statement that you never_notwithstanding what Mr. Cook said- you never wore a wire or tried to tape-record any conversations with anybody, or anything like that, did you?

Mr. Parcell. To the best of my knowledge, on the job site I never wore a wire.

Mr. Talent. Okay. Well, you would remember whether you wore a wire on the job site.

Mr. Parcell. No, I didn't wear a wire on the job site.

Mr. Talent. Did you work with like a business agent, a supervising business agent, when you were doing this?

Mr. Parcell. We have an organizing agent in Michigan that I worked in coordination with.

Mr. Talent. Did they ever advise you to tape-record conversations with management people or anything like that?

Mr. Parcell. I have some conversations that I tape-recorded during the hiring process, that I did for my house.

Mr. Talent. Okay. So you applied at two other places, but you didn't go to work there, so you weren't hired at those other places?

Mr. Parcell. That is correct.

Mr. Talent. Mr. Griffin, while I have a little time left, I am trying to establish some common ground here. I come from the old school. My dad worked for the National Labor Relations Boards in the late 1940s, and then he started his own labor management firm in St. Louis in the 1950s, and the group of people who did labor law work in those days was pretty small. They knew each other and there were certain codes that they followed. I was brought up in that context.

I will tell you, that by far the greatest problem I have with this practice is what Mr. Payne referred to, the evidence of frivolous charges being filed with the intention of driving up costs on employers, and then such evidence, as violence, that we have.

Let me just ask you a question. I take it that you would not claim that that is a right or correct thing to do? In other words, if people are out there filing frivolous charges with the intent of driving up legal costs for small employers, you are saying that is the wrong thing to do, its not a good way of organizing, are you?

Mr. Griffin. If somebody is simply filing frivolous charges to drive up costs, I think the answer to your question has to be no. The question sort of presupposes that there is a practice of that, and I would at least take issue with respect to that.

Mr. Talent. I understand you resist any implications on the question.

Please comment on this for me. I have talked to a lot of people, and we have heard an awful lot of testimony. I have summaries of a couple of cases, people who testified last year before this subcommittee, who talked in great detail about instances where this has occurred. We have a couple of attorneys here testifying that it has occurred.

I just have to tell you, at a certain point one has to believe that this is out there. We have a person who worked on the inside, and if you are not going to support this bill, and if you really care about honest and genuine union organizing, it seems to me you would work with us to try to stop this abuse process that is undermining the credibility, I think, of union organizing in the construction trades.

Now go ahead and tell me why I am crazy.

Mr. Griffin. If I could just make a couple of points, and this will be in response to your question, but I think that there is a little bit of, if not misinformation, misfocus in the course of some of the discussion here.

First of all, with respect to representation elections in the construction industry, there is a section of the National Labor Relations Act, section 8(f), which is in the National Labor Relations Act precisely because Congress heard from organized employers, unorganized employers, and the building trades back in the 1950s that when the Board decided to take jurisdiction over the building trades, over the construction work in the 1950s, which it had never done before, that the Board's election processes didn't work in the construction industry.

So the notion that the only way that union representation can be achieved in the construction industry, or can legitimately be achieved in the construction industry, is through the Board's election processes is one that the text of the statute itself belies. So that is_

Mr. Talent. That is why I asked Mr. Parcell whether his involvement resulted either in an election or agreement to bargain with the union, and in neither instance did it.

Mr. Griffin. In some cases where an employer violates the act fairly severely, first of all, the Board won't even hold an election because the unfair labor practice conduct blocks the holding of the election. And secondly, the atmosphere in the workplace may be so poisoned that it is impossible to hold an election or to bargain.

So that result doesn't seem at all untoward to me. It is a situation where the employer violated the law and the only thing that they were held to was the monetary remedy. That is too frequently the case, in many instances.

Mr. Talent. Mr. Chairman, thank you. I do think that when we collect a big volume of evidence_and it is anecdotal, I grant you_and I don't know how else to collect it; you can't ask Mr. Feinstein, are you deliberately going on charges that are frivolous. We are not going to get a positive response from the general request, so the evidence has to be to be anecdotal.

When you build up a volume of evidence, you have all these charges, many of which end up not going on and you don't end up with organizing, you have to ask yourself whether the process has been affected by the kind of thing I think we all agree we don't want.

Thank you, Mr. Chairman.

Chairman Fawell. The Chair will recognize Mr. Tierney, and let us see how we progress.

Mr. Tierney. Thank you, Mr. Chairman.

Mr. Payne. I might ask, Mr. Chairman, that Mr. Tierney, if I can't get back, he would assume my position here.

And just to say I am glad you brought up that wiring question because I agree with you, this wiring stuff is ugly.

Mr. Tierney. Mr. Chairman, there are 13 minutes left on the vote.

Chairman Fawell. Would you care to proceed now?

Mr. Tierney. I have only a couple of brief questions, mostly directed to Mr. Griffin, in fact.

Taking note of my colleague's questions a moment ago, I take it you might have some suggestions as to how each piece of the legislation could be at least somewhat recrafted or amended, that would accomplish what the purported goal is and take care of the concerns you and those you represent might have.

Mr. Griffin. With respect to the bill which seeks to have the Board adjudicate within a year the discriminatee's complaints, we made certain suggestions with respect to how we think that bill, which has a very good end, could be improved, and we indicated that we would support it with those modifications.

Mr. Tierney. Have those been submitted in writing to the Chairman?

Mr. Griffin. Yes, they are in my written testimony.

Mr. Tierney. I think we would be well-served, I think, by putting those in the record.

My own feeling on this, and anybody can respond, is that the current situation where the NLRB has probably a paucity of resources is a part of the problem. More often than not some of the reasons these things don't get resolved is there are just not the resources to entertain all the claims made before the NLRB.

Mr. Griffin. The statistics we cited were that the staff decreased, I believe, 34 percent and the caseload has increased some 50 percent. I know in my own experience I worked on a Board member's staff in the early 1980s, and in speaking to Board members currently, I know their staffs are reduced by at least a third, and in some cases more than the staffing levels present during the beginning of Chairman Dotson's term as Chairman of the NLRB.

Mr. Tierney. Let me close, because I think we can go on too long.

Most of the extreme situations these various bills address, and the testimony of those, are not something that I think people are unsympathetic to. The problem is there are existing remedies or remedies that could be easily crafted, none of which would have any function if the NLRB was not equipped to deal with them promptly and fairly. I would hope attention would be given to the recommendations put forth as to how the bills could be revised to take care of everyone's concerns, and secondly make sure the NLRB has the capacity to be sure it can implement the laws intended to be implemented and take care of all these situations.

Thank you.

Chairman Fawell. I thank the gentleman for his comments. There is another vote. I think probably it is best at this time we declare a short recess while we go to vote, so the Chair will declare, say, a 10 minute recess.

[Recess.]

Chairman Fawell. All right. Well, we are ready to go again. The Chair recognizes the gentleman from North Carolina, Mr. Ballenger.

Mr. Ballenger. First of all, let me apologize for not being here in the early part of your testimony. I did read a fair amount of the testimony and I find it fascinating. For those who don't know, I run a manufacturing company back in North Carolina, but I would like to approach it from a little bit different viewpoint maybe than other people have mentioned. As I understand it, EAJA applies to small companies, 500 or fewer employees, net worth up to $7 million. It won't make a bunch of sense to some of these politicians; some of the business people might understand it.

If you take the best case scenario of a company that has a net worth of $7 million and you use a number that people play with, say return on investment, 10 percent, which means it is better than a government bond but not a hell of a lot better, and it earns $70,000 a year. With that as a background for this company, and going to Mr. Kraft, your firm, what was the name of that electrical firm that you represented?

Mr. Kraft. Bay Electric Company.

Mr. Ballenger. Bay Electric, and the basic idea was that all of the efforts brought before the NLRB were against the business, so they had to defend themselves legally to fight this thing.

Were there any costs to the union at all in that particular situation?

Mr. Kraft. None.

Mr. Ballenger. They get a free ride for however many claims they want to put up?

Mr. Kraft. That is correct.

Mr. Ballenger. I was trying to get a Washington legal fee so it might embarrass you, I said $600 an hour, but people said others don't go that high, I know that you don't work for free. And Bay Electric, which doesn't have anything like a net worth of $7 million or 500 employees, so substantially smaller than that, they would earn about $70,000 a year return on investment.

So they get the claims up and you go to work, and you as a lawyer prepare to defend them, and so forth and so on, and how many hours you put in? I don't want to ask you what your legal fees might be, but I was going to take your fees times a Washington number.

Mr. Kraft. I would put in between 50 and 60 hours a week.

Mr. Ballenger. A total number, though.

Mr. Kraft. Total on which case?

Mr. Ballenger. This particular effort that you made for them. Make a wild guess.

Mr. Kraft. 190 hours.

Mr. Ballenger. And say at 190 hours times $200 an hour, which is fairly cheap up here in Washington. How much will it cost you?

Mr. Kraft. I was going to say I would like to confer with you about setting up my fee schedule.

Mr. Ballenger. What I am trying to say is all of a sudden you have just used up half of their net earnings for that year to defend themselves in a case where the people that they were defending themselves against, it didn't cost them anything.

Mr. Kraft. That is correct.

Mr. Ballenger. The question comes to my mind through the discussion here, does it ever cost the union anything to make these claims against business? All of these things, you end up with NLRB and you go before them and it is not free if you want to defend yourself, is that not correct?

Mr. Kraft. No, that is absolutely correct. I think that is why salting is being pursued by the union, because it applies economic pressure on the nonunion employer without costing them anything.

Mr. Ballenger. I think Mr. Griffin said basically the cost of this whole thing causes business to just give up. You throw in your hand mainly because you can't afford to fight a fight that- and I am not saying the NLRB is prejudiced- you are liable to lose if you go before them.

Even if you win, you have lost a ton of money. So what have you got to win? You have a chance to spend a lot on legal fees and feel better when you go to work. Even though I am broke and I am bankrupt, I have put up a good fight. I hope my children and grandchildren will earn their own living because I won't be able to leave them anything anyhow.

The point I am trying to bring out is that if the NLRB, and I was reading numbers from Mr. Rousos' statement, in fiscal year '96 NLRB issued 20,000 orders and settled 2,200 charges post-complaint.

I don't know what that means, whether how fast you turn over cases_Mr. Rousos, if I am taken before the NLRB or if I appeal to the NLRB and I am willing to spend the money it will cost me, how long before I get some kind of judgment one way or the other?

Mr. Rousos. It depends on the kind of case it is, of course, but if you don't settle and you go through the adjudicatory process, I have seen them go on for 2 years, more than 2 years. I know there are cases out there that have gone longer than that. So it is quite a long process. If you appeal to a court after that, of course that adds time to the process.

It can be a very long, time-consuming process, as you point out, and it is expensive not only in terms of money but the time that business owners have to spend on something like that. That is potentially more damaging than the amount of money they have to spend.

Mr. Ballenger. In other words, you can't run your business and be in Washington defending yourself at the same time.

Mr. Rousos. Yes, and having to focus on it all the time, you are not going to be able to keep your mind on thinking about things that will be of benefit to you and the employees of the business.

Mr. Ballenger. If what I am saying is comparatively true, doesn't it seem only fair, if it is a frivolous suit you must think you have a chance to win, and win some money or win without costing you any money, or you are not going to do it.

The first thing said, the way it is, you are stupid to appeal anything before the NLRB because all you are going to do is throw away money. If you are trying to make it a level playing field, and you know that the case is the most idiotic case and it is appealed_it takes two years for them to make up their mind, it is not free while they are deciding. Doesn't it make sense to give the person who might have everything in the world going for him a chance to not only be honest enough to defend himself but not have to pay legal fees because he won?

Mr. Griffin. Let me respond to that question, if I might.

First of all, the statistics that you cited prove the case we were making earlier, which is that if there are 30,000 charges filed and only 2,500 complaints issued, that the problem, if you are seeking to address frivolous charges, what you are going after, complaints that are filed, that that is what the bill addresses. You are going after the wrong thing.

Mr. Ballenger. Let me ask you a question. On 30,000 charges, generally speaking, who would have brought those charges? Is business half of those or, generally speaking, who do the charges come from?

Mr. Griffin. The charges come from both. There are 2 unfair labor practice sections of the Act, 8(a) and 8(b); 8(a) is unfair labor practices by employers, 8(b) is labor practices by unions.

Mr. Ballenger. In your past experience, how would you break them down? They don't come out even, do they?

Mr. Griffin. No, by a great deal the vast majority of illegal conduct is committed by employers, and therefore the vast majority of charges are addressed to employer conduct.

Mr. Ballenger. In reality, if you got 2,500 complaints and 2,200 cases are settled, the vast majority of those are pro-union in their settlement?

Mr. Griffin. Those statistics_it would be hard, without going into more detail, to answer that.

Mr. Ballenger. Considering the majority of the 30,000 charges are from unions, the fact is I don't know that I have heard of_how many business people would make charges. You know you are going to go before a Board and lose, so why would you ever make those charges?

Mr. Griffin. I would submit to you that there are sections of the National Labor Relations Act, section 10(l), for example, which we addressed today, which give extraordinary relief to businessmen who choose to file a charge and seek to get the NLRB to go to court to stop secondary boycott activity or secondary picketing. And that type of activity is one which I believe business people who think they might be potentially subject to that activity, they make very rapid use of that.

Mr. Ballenger. How often nowadays do you run into secondary boycotts? When is the last time you heard of one?

It is like if you have a great defense against shooting quail but if you don't ever shoot any quail, what is the use of the defense?

Mr. Griffin. Well, if you give me a moment I can check the Board's fiscal year report for 1996 and tell you how many 8(b) charges were filed, if you would like, or I could submit it for the record.

Mr. Ballenger. Mr. Kraft has his finger up. He might have a number that fits.

Mr. Kraft. No, I don't.

Mr. Ballenger. Try something else. I figure I was going to lose that one anyhow.

Mr. Kraft. One of the observations you are making relative to charges and costs of charges, if you look at the big picture and try to understand it, it is a lot more difficult for a union organizer to talk to a group of people and persuade them about their point of view. If I have to talk to 5, 10, 15, 20 people and say this is the union's program, they are working for the nonunion employer so it is probably going to be an uphill battle.

If instead of pursuing that, I can take that employer and force him to go back to court and back to court and back to court, maybe I won't organize the employees but I can put that fellow out of business.

Mr. Ballenger. If he has to go out of business, he might go ahead and unionize and you don't have to have an election.

Mr. Kraft. The proliferation of charges and why this is happening has everything to do with putting economic pressure on the employer. It hasn't anything to do with the debate over the unions or not.

Mr. Ballenger. The sad part is where the employer is a monster and crook and so forth, you need to have the power that the unions have, but so many cases are such that you are forced to go before the Federal Government and you don't have what, in my considered opinion, is an equal chance because you got a Board that, so far as I am concerned, that delivers a one-sided viewpoint.

Mr. Chairman, having been completely unbiased in what I said, I will turn it back to you.

Chairman Fawell. All right. I thank the gentleman.

Just a question that I would like to add to all of this. In the testimony by Mr. Griffin you referred to the American rule, which states that attorney fees are paid by the party. But increasingly is that correct?

Mr. Rousos, aren't there a number of examples, and I guess civil rights would be a good example, where increasingly the Congress has seen fit to rescue the beleaguered person, who has to be in a difficult position, to have the other party_where the loser pays, in concept?

Mr. Rousos. Mr. Griffin is right, there is an American rule, and unlike the American rule, the English rule is each party bears their own party's fees. But there are many exceptions to the American rule in America.

Title 7, the ADA, the FMLA, under State law and various wage payment statutes, all of those things shift attorneys fees to the loser. In fact EAGA already shifts the fees to the loser. What the FAIR act would do would be to remedy a problem with EAGA in implementation.

So Mr. Griffin is correct, the American rule is that you do pay your own attorneys fees, but in this venue there are many exceptions more common than the rule.

Chairman Fawell. As I understand it, under EAGA the burden of proof that was supposed to be passed on to the NLRB was that they would have to show substantial justification for their having allowed the complaint to be issued. The Supreme Court really construed justification only to be "reasonable justification." As a practical matter, out of the thousands of complaints, one very, very seldom ever sees anything which is able to take advantage of EAGA any longer, and the success ratio is something like .0001.

So I think if one goes through the experience that some of us here in Congress have gone through, where I recall a meeting we had in Kansas City where we must have had a dozen small business people coming before us and they truly felt deeply aggrieved at the United States Government, they saw the government as their enemy, and they were talking about salting and they felt immediately all expenses are taken up by the taxpayers against them.

They have not much of an opportunity. If you are a large corporation you might be able to survive it all, but for most of them, they said you just have to try to figure how you settle this thing and get out of it, and then you get a dozen of these labor charges. So it can be difficult.

I think when we talk about appropriations, one of the reasons perhaps the NLRB is having problems in the Appropriations Committee, though I can't speak on behalf of them, are these grievances like this. I think you are going to see more of it.

Probably some will react and say, well, maybe we should deliver a message to the General Counsel that these frivolous charges are a part of everyday life in the union efforts to organize, just as Mr. Parcell in his testimony said, that from his home he wired the conversation in his discussion with the employer whom he was asking for a job. That is not usual conduct.

I often have wondered, in the most egregious cases I have seen in Kansas City, involving arson, why somebody doesn't use the RICO statute against a union that might be doing these things on a very high scale, and say this is an unlawful conspiracy when it ends up driving somebody out of business. To me it is unlawful under RICO. I don't know why somebody hasn't used that. And those things are happening. It is difficult to prove, of course.

But, thank you all.

I want to make it clear that the legislation we are working on, the Truth in Employment Act, and we are still working on it, and I appreciate Mr. Griffin's comments on what the language is we can come up with. But we have come up with language at this point that simply refers to the fact that nothing in this subsection shall be construed as requiring an employer to employ any person who is not a bona fide employee applicant, not a bona fide employee. We are talking about applicants who seek or have sought employment with the employer for the primary purpose of furthering another employment or another agency status.

That is our best effort so far.

If one can show burden of proof that the primary reason was simply to get access to be able to collectively bargain, I don't think that is fair. If they can't get access to the workers, I think under the law then they can actually go into the place of employment. There are ways and they must have ways of communicating.

But I think that most people on either side of the aisle will say it isn't really fair that someone should have access and apply for a job when they really don't want it. I don't care if it is just a 10-day job. I worked on construction for a number of years as a younger person and know how you have many job sites, but nobody will say that, though. If somebody applies for a job in Congress, in my office or Mr. Tierney's office, it is not because they want to be under his employ and it is not what they want, and they have another reason for it, then they are not a bona fide applicant.

That is what we are trying to get at, without in any way saying that because you happen to be a member of an union you can't apply. And if you are a member of the union when you join that nonunion shop, you have a perfect right certainly to engage in efforts to collectively bargain. We are not aiming at that, but we are aiming at a situation where somebody is employed by the union, he is salting, he is doing all these things but he is a full-time employed person. He is not really applying for a job there because he wants to be a part of XYZ Electrical Company, and he is there for primarily another purpose. So we are trying to fashion something that we hope will be fair.

But, that is enough. Thank you very much, all of you, for testifying. If any of you would like to add comments, please feel free to do so. We would be glad to receive those comments. Believe it or not, we are trying to struggle with something that is reasonable. We are not going to pass legislation if there is violent opposition on the other side of the aisle.

We have to work in some way, however, to move ahead. I hope we don't end up with some people saying: "Well, if this is the way the NLRB is running things, they should get less money than they are getting now." I don't agree with that, but I can understand that as a human reaction because they deliver a message: "As long as you allow this to keep occurring, then the appropriations are not going to be coming. Why should we support you under these circumstances?"

Some people will take that view.

I hope we don't have to do that. I hope we can figure out how to do something. I think for the small business people the "loser pays" concept ought to be considered, at least. So I hope we can eventually get something worked out.

Thank you again for your time.

[Whereupon, at 1:25 p.m., the subcommittee was adjourned.]