[House Hearing, 112 Congress]
[From the U.S. Government Printing Office]
EXAMINING PROPOSALS TO STRENGTHEN
THE NATIONAL LABOR RELATIONS ACT
SUBCOMMITTEE ON HEALTH,
EMPLOYMENT, LABOR AND PENSIONS
COMMITTEE ON EDUCATION
AND THE WORKFORCE
U.S. House of Representatives
ONE HUNDRED TWELFTH CONGRESS
HEARING HELD IN WASHINGTON, DC, JULY 25, 2012
Serial No. 112-67
Printed for the use of the Committee on Education and the Workforce
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Committee address: http://edworkforce.house.gov
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COMMITTEE ON EDUCATION AND THE WORKFORCE
JOHN KLINE, Minnesota, Chairman
Thomas E. Petri, Wisconsin George Miller, California,
Howard P. ``Buck'' McKeon, Senior Democratic Member
California Dale E. Kildee, Michigan
Judy Biggert, Illinois Robert E. Andrews, New Jersey
Todd Russell Platts, Pennsylvania Robert C. ``Bobby'' Scott,
Joe Wilson, South Carolina Virginia
Virginia Foxx, North Carolina Lynn C. Woolsey, California
Bob Goodlatte, Virginia Ruben Hinojosa, Texas
Duncan Hunter, California Carolyn McCarthy, New York
David P. Roe, Tennessee John F. Tierney, Massachusetts
Glenn Thompson, Pennsylvania Dennis J. Kucinich, Ohio
Tim Walberg, Michigan Rush D. Holt, New Jersey
Scott DesJarlais, Tennessee Susan A. Davis, California
Richard L. Hanna, New York Raul M. Grijalva, Arizona
Todd Rokita, Indiana Timothy H. Bishop, New York
Larry Bucshon, Indiana David Loebsack, Iowa
Trey Gowdy, South Carolina Mazie K. Hirono, Hawaii
Lou Barletta, Pennsylvania Jason Altmire, Pennsylvania
Kristi L. Noem, South Dakota Marcia L. Fudge, Ohio
Martha Roby, Alabama
Joseph J. Heck, Nevada
Dennis A. Ross, Florida
Mike Kelly, Pennsylvania
Barrett Karr, Staff Director
Jody Calemine, Minority Staff Director
SUBCOMMITTEE ON HEALTH, EMPLOYMENT, LABOR AND PENSIONS
DAVID P. ROE, Tennessee, Chairman
Joe Wilson, South Carolina Robert E. Andrews, New Jersey
Glenn Thompson, Pennsylvania Ranking Member
Tim Walberg, Michigan Dennis J. Kucinich, Ohio
Scott DesJarlais, Tennessee David Loebsack, Iowa
Richard L. Hanna, New York Dale E. Kildee, Michigan
Todd Rokita, Indiana Ruben Hinojosa, Texas
Larry Bucshon, Indiana Carolyn McCarthy, New York
Lou Barletta, Pennsylvania John F. Tierney, Massachusetts
Kristi L. Noem, South Dakota Rush D. Holt, New Jersey
Martha Roby, Alabama Robert C. ``Bobby'' Scott,
Joseph J. Heck, Nevada Virginia
Dennis A. Ross, Florida Jason Altmire, Pennsylvania
C O N T E N T S
Hearing held on July 25, 2012.................................... 1
Statement of Members:
Andrews, Hon. Robert E., ranking member, Subcommittee on
Health, Employment, Labor and Pensions..................... 4
Roe, Hon. David P., Chairman, Subcommittee on Health,
Employment, Labor and Pensions............................. 1
Prepared statement of.................................... 3
Statement of Witnesses:
Kane, Tim, chief economist, Hudson Institute................. 28
Prepared statement of.................................... 30
Messenger, William L., staff attorney, National Right to Work
Legal Defense Foundation................................... 10
Prepared statement of.................................... 11
Porter, Hon. Robert Odawi, President, Seneca Nation of
Prepared statement of.................................... 8
Virk, Devki K., Bredhoff & Kaiser, P.L.L.C................... 19
Prepared statement of.................................... 20
PowerPoint slide, ``% Unionized Labor vs. Unemployment
Letter, dated May 11, 2012, to Chairman Kline............ 52
Mr. Kane, PowerPoint slide, ``The Zero Recovery''............ 32
Miller, Hon. George, senior Democratic member, Committee on
Education and the Workforce:
Letter, dated May 11, 2012, to Chairman Kline............ 52
Memorandum, dated March 19, 2012, from David P. Berry,
Inspector General, National Labor Relations Board...... 54
Memorandum, dated April 30, 2012, from Mr. Berry......... 67
Rokita, Hon. Todd, a Representative in Congress from the
State of Indiana, letter, dated July 24, 2012, from Brett
EXAMINING PROPOSALS TO STRENGTHEN THE NATIONAL LABOR RELATIONS ACT
Wednesday, July 25, 2012
U.S. House of Representatives
Subcommittee on Health, Employment, Labor and Pensions
Committee on Education and the Workforce
The subcommittee met, pursuant to call, at 10:02 a.m., in
Room 2175, Rayburn House Office Building, Hon. David P. Roe
[chairman of the subcommittee] presiding.
Present: Representatives Roe, Wilson, Rokita, Noem, Ross,
Andrews, Kucinich, Kildee, Tierney, and Holt.
Also present: Representatives Kline and Miller.
Staff present: Adam Bennot, Press Assistant; Casey Buboltz,
Coalitions and Member Services Coordinator; Molly Conway,
Professional Staff Member; Ed Gilroy, Director of Workforce
Policy; Benjamin Hoog, Legislative Assistant; Marvin Kaplan,
Workforce Policy Counsel; Barrett Karr, Staff Director; Brian
Newell, Deputy Communications Director; Krisann Pearce, General
Counsel; Linda Stevens, Chief Clerk/Assistant to the General
Counsel; Alissa Strawcutter, Deputy Clerk; Loren Sweatt, Senior
Policy Advisor; Tylease Alli, Minority Clerk; Jody Calemine,
Minority Staff Director; John D'Elia, Minority Staff Assistant;
Jonay Foster, Minority Fellow, Labor; Brian Levin, Minority New
Media Press Assistant; Celine McNicholas, Minority Labor
Counsel; Megan O'Reilly, Minority General Counsel; Michele
Varnhagen, Minority Chief Policy Advisor/Labor Policy Director;
and Michael Zola, Minority Senior Counsel,
Chairman Roe. A quorum being present the Subcommittee on
Health, Employment, Labor, and Pensions will come to order.
Good morning, everyone.
I would like to thank the witnesses for being here with us.
We have a distinguished panel and look forward to their
Over the last year this committee has taken action on
numerous occasions to defend the rights of workers and
employers from the harmful agenda of the National Labor
Relations Board. Most notably, we have passed legislation that
would prohibit the NLRB from dictating the location of American
businesses and advanced a bill that would preserve longstanding
union election procedures that protect employer free speech and
worker free choice.
I hope our colleagues in the Senate will soon see the value
in these positive proposals and hold a vote without further
delay. In the meantime, this committee must continue examining
labor policies that affect the strength and competitiveness of
America's workplaces. Toward that end, we will review today a
number of decisions by the board and examine their impact on
the workforce and discuss legislative solutions offered by
members of the committee.
As we all know, foremost on the minds of many workers are
the ongoing challenges they face in this tough economy. Roughly
13 million Americans are unemployed and searching for work.
Those fortunate to have a job watch helplessly as higher
food and energy prices take more out of a paycheck that hasn't
increased significantly in the recent years. In fact, hourly--
average hourly wage earnings for private sector employees has
risen less than $1 over the last 2 years.
No individual that works hard and earns a higher wage
should be denied the fruits of his or her labor. Yet federal
labor policy actually prevents union workers from receiving
higher wages if they are not included in a collective
bargaining agreement or agreed on--to by the union. Over the
years the board has found employees in violation of the law for
signing bonuses, expanding pay for commissioned associates, and
implementing incentive programs that reward good work.
I am pleased to support a bill introduced by our colleague
from Indiana, Representative Todd Rokita, which would amend the
NLRA--National Labor Relations Act and permit employers to pay
higher wages to their employees. The RAISE Act is a common
sense reform that would provide relief to countless working
Workers are not only concerned about policies to keep their
wages down; they also worry about the effects to undermine the
democratic rights of the workplace. In its 2007 Dana decision
the NLRB strengthened worker access to a secret ballot in the
event their employer voluntarily recognized a union.
Recognizing that intimidation and coercion often associated
with card-check campaigns undermine employee free choice, the
board's decision provided employees 45 days to request a secret
Remarkably, the Obama NLRB reversed this important pro-
worker decision. Once an employer decides it is--is it in his
or her best interest to voluntarily recognize the union, some
workers will be forced to wait years before participating in a
free and fair union election.
We often hear the Obama board has been diligently promoting
the workers--the rights of workers. However, its decision to
restrict access to the secret ballot exposes the harsh reality
behind such false rhetoric.
The Secret Ballot Protection Act will end the assault on
the secret ballot once and for all. The bill, which I
introduced and am proud to have the support of 69 of my House
Republican colleagues, amends the National Labor Relations Act
to ensure unions have to first win the vote in a secret ballot
election before they can represent workers. And every person on
this dais, including the president, is elected by secret
Finally, the board is simultaneously advancing policies
that restrict employer rights while also working to expand its
jurisdiction over the sovereign affairs of Indian tribes. In
the 2004 landmark San Manuel Indian Bingo and Casino decision
the board overturned nearly 30 years of precedent in order to
impose its authority on commercial activities owned and
operated by Native Americans. The decision was issued with
bipartisan support of the board members, which demonstrates
that just because something is bipartisan doesn't mean it is
good public policy.
We are honored to have today with us President Robert
Porter, of the Seneca Nation of Indians, to discuss his
experience with the board's flawed interpretation of the law
and to express his support for the Tribal Labor Sovereignty
Act. This important legislation, championed by our colleague
from South Dakota, Representative Kristi Noem, would reassert
the authority of tribal leaders over tribal affairs, free from
the NLRB intrusion.
There is a great deal of work to be done to make NLRA more
responsive to today's needs in the workplace. I look forward to
working with all of my colleagues in that important effort.
And I will now recognize my distinguished colleague, Rob
Andrews, senior Democrat member from the subcommittee, for his
[The statement of Chairman Roe follows:]
Prepared Statement of Hon. David P. Roe, Chairman, Subcommittee on
Health, Employment, Labor and Pensions
Good morning, everyone. I would like to thank our witnesses for
being with us. We have a distinguished panel and we look forward to
Over the last year, this committee has taken action on numerous
occasions to defend the rights of workers and employers from the
harmful agenda of the National Labor Relations Board. Most notably, we
have passed legislation that would prohibit the NLRB from dictating the
location of American businesses and advanced a bill that would preserve
long-standing union election procedures that protect employer free
speech and worker free choice.
I hope our colleagues in the Senate will soon see the value in
these positive proposals and hold a vote without further delay. In the
meantime, this committee must continue examining labor policies that
affect the strength and competitiveness of America's workplaces. Toward
that end, we will review today a number of decisions by the board,
examine their impact on the workforce, and discuss legislative
solutions offered by members of the committee.
As we all know, foremost on the minds of many workers are the
ongoing challenges they face in this tough economy. Roughly 13 million
Americans are unemployed and searching for work. Those fortunate to
have a job watch helplessly as higher food and energy prices take more
out of a paycheck that hasn't increased significantly in recent years.
In fact, average hourly earnings for private-sector employees has risen
less than $1 over the last two years.
No individual that works hard and earns a higher wage should be
denied the fruits of his or her labor. Yet federal labor policy
actually prevents union workers from receiving higher wages if they are
not included in a collective bargaining agreement or agreed to by the
union. Over the years, the board has found employers in violation of
the law for signing bonuses, expanding pay for commissioned associates,
and implementing incentive programs that reward good work.
I am pleased to support a bill introduced by our colleague from
Indiana, Representative Todd Rokita, which would amend the National
Labor Relations Act and permit employers to pay higher wages to their
employees. The RAISE Act is commonsense reform that would provide
relief to countless working families.
Workers are not only concerned about policies that keep their wages
down, they also worry about efforts to undermine the democratic rights
of the workplace. In its 2007 Dana decision, the NLRB strengthened
worker access to a secret ballot in the event their employer
voluntarily recognized a union. Recognizing that intimidation and
coercion often associated with card-check campaigns undermine employee
free choice, the board's decision provided employees 45 days to request
a secret ballot election.
Remarkably, the Obama NLRB reversed this important pro-worker
decision. Once an employer decides it is in his or her best interest to
voluntarily recognize the union, some workers will be forced to wait
years before participating in a free and fair union election. We often
hear the Obama board has been diligently promoting the rights of
workers. However, its decision to restrict access to the secret ballot
exposes the harsh reality behind such false rhetoric.
The Secret Ballot Protection Act will end the assault on the secret
ballot once and for all. The bill, which I introduced and am proud to
have the support of 69 of my House Republican colleagues, amends the
National Labor Relations Act to ensure unions have to first win the
vote in a secret ballot election before they can represent workers.
Finally, the board is simultaneously advancing policies that
restrict employer rights while also working to expand its jurisdiction
over the sovereign affairs of Indian tribes. In the 2004 landmark San
Manuel Indian Bingo & Casino decision, the board overturned nearly
thirty years of precedent in order to impose its authority on
commercial activities owned and operated by Native Americans. The
decision was issued with bipartisan support of the board members, which
demonstrates that just because something is bipartisan doesn't mean it
is good public policy.
We are honored to have with us today President Robert Odawi Porter,
of the Seneca Nation of Indians, to discuss his experience with the
board's flawed interpretation of the law and to express his support for
the Tribal Labor Sovereignty Act. This important legislation,
championed by our colleague from South Dakota Representative Kristi
Noem would reassert the authority of tribal leaders over tribal
affairs, free from NLRB intrusion.
There is a great deal of work to be done to make the NLRA more
responsive to the needs of today's workplaces. I look forward to
working with all of my colleagues in that important effort. I will now
recognize my distinguished colleague Rob Andrews, the senior Democratic
member of the subcommittee, for his opening remarks.
Mr. Andrews. Mr. Chairman, thank you and good morning. We
appreciate the good-spiritedness which you conduct all the
affairs of the subcommittee.
Good morning, ladies and gentlemen. Thank you for coming to
testify with us this morning.
This is a hearing that I think starts from the premise of a
story that isn't true, or an era that doesn't exist. The basic
narrative here is that the so-called Obama labor board has run
amuck and has made all sorts of radical decisions that are
undermining the health of the U.S. economy. And it makes for
But when you examine the facts of what has happened with
the NLRB in the last couple years they tell a very different
story. First of all, the labor board in the last couple of
years has had a far higher percentage of unanimous decisions
than the labor board did in the Bush years. So if there is such
a radical and a huge divide within the board why is it that the
board has had more unanimous decisions in the last 3 years than
it did under the prior board?
Second is the Boeing case is part of this narrative, in
which the board is characterized as, quote--``dictating where
businesses can locate.'' Nothing could be a further
mischaracterization of the Boeing case. In the Boeing case the
board filed a complaint alleging that Boeing had threatened to
move work because of the collective bargaining activities of
unions in the state of Washington.
The case settled. Boeing and the board looked at the
matter, they settled the case amicably, and the case is over.
That is what the case was about.
There is no rule, there is no decision, there is no statute
that says that any business must or must not locate in any
place in the United States.
And so we are going to have a hearing this morning about
other ideas about the National Labor Relations Board. I would
respectfully suggest that what the Congress ought to be doing
is three things that would address the problems I think most of
us hear about when we go back to our communities and our
First is, the president in September of 2011 proposed the
idea that small businesses that hire people should get a tax
cut for doing so. We have never taken a vote on that proposal.
Second is that although the private sector economy--
businesses have added 4.3 million private sector jobs since
March of 2010, public sector employment has dropped by over
600,000 people--teachers, firefighters, police officers, public
works employees. There are a lot fewer of them than there were
2 years ago.
The president proposed a modest program of help to states
and cities and localities to help rehire some of those police
officers and firefighters and teachers. We have never taken a
vote on that proposal and I think we should.
And finally, there is an unmitigated crisis in rural
America because of the worst drought in decades. It is
devastating the economy of rural America as we speak.
Republicans and Democrats working together on the
Agriculture Committee passed a farm bill, and there are things
in that bill I like and things in that bill that I do not like.
But they passed a bill to help with this crisis in rural
The Congress is scheduled to adjourn next Friday for 6
weeks. As of now, from what we are hearing from the majority
leadership, there won't be a vote on the farm bill either, as
rural America suffers.
Now, I am not suggesting that the bills that our colleagues
have put forward are not worth consideration. They are put
forward in good spirit and good faith and they should be looked
What I am suggesting is in the wake of the continuing
chronic problem of unemployment that the ideas the president
has put forward should merit a vote. And at a time of great
economic crisis in rural America the farm bill, that both
Republicans and Democrats supported in the Agriculture
Committee, should at least be voted on before we leave town for
That seems to me to be a higher order of business for the
Congress, and I would urge that we reconsider on that grounds.
Mr. Chairman, again, I appreciate the chance to be with you
and to hear from the witnesses and look forward to their
Chairman Roe. Thank you, Mr. Andrews.
Pursuant to Committee Rule 7c, all members will be
permitted to submit written statements to be included in the
permanent hearing record. And without objection, the hearing
record will remain open for 14 days to allow such statements
and other extraneous material referenced during the hearing to
be submitted for the official hearing record.
It is now my pleasure to introduce our very distinguished
panel. First, the Honorable Robert Porter is the president of
the Seneca Nation of Indians.
Welcome, Mr. President.
Mr. William Messenger is a staff attorney at the National
Right to Work Legal Defense Foundation, located in Springfield,
Ms. Devki Virk is a member of the--member of Bredhoff &
Kaiser, PLLC, in Washington, D.C.
And I hope I pronounced your name correct--correctly.
Dr. Tim Kane is the chief economist at the Hudson Institute
here in Washington, D.C.
Before I recognize you to provide your testimony let me
briefly explain the lighting system. You have 5 minutes to
present your testimony. When you begin the light in front of
you will turn green; with 1 minute left the light will turn
yellow; and when your time is expired the light will turn red,
at which point I will ask you to wrap up your testimony as best
And after everyone has testified members will each have 5
minutes to question the panel.
Well, first I would like to thank the witnesses for being
here today, and now I will start with President Porter?
Is your mic on?
Mr. Porter. Oh, how about that?
Chairman Roe. Better.
STATEMENT OF HON. ROBERT ODAWI PORTER, PRESIDENT,
SENECA NATION OF INDIANS
Mr. Porter. Excellent.
Nya-weh Ske-no. In our language, I am thankful that you are
well, I am thankful to be here.
I am pleased to appear before you today to testify on how
you might strengthen the National Labor Relations Act while at
the same time strengthening respect for tribal sovereignty by
enacting H.R. 2335, the Tribal Labor Sovereignty Act. I ask
that my written testimony be placed in the record on behalf of
the Seneca Nation of Indians, which I lead as its elected
The Seneca Nation is one of America's earliest allies,
historically aligned with the other members of the Six Nations
Iroquois Confederacy and living in peace with the American
people since the signing of the Canandaigua Treaty over 217
years ago. In that treaty the United States made several key
promises to the Seneca Nation. Of direct relevance to this
hearing today, the United States recognized the Seneca Nation
as a sovereign nation and assured us that our property and
activities on our territory would not be interfered with.
Because of this treaty-protected sovereign freedom, both
our nation government and individual Seneca citizens have
benefitted from the opportunity to resume our trade relations
with non-Indians, especially during the last 40 years, focusing
primarily on available businesses involving tobacco, gaming,
hospitality, and related ventures. Key to our economic success
has been our governmental sovereignty--our right to govern in
our own way what happens in our own land.
Unfortunately, many aspects of our treaty-recognized
freedoms have been eroded over time. Each of the three branches
of the federal government has, from time to time, overturned
decades of precedent in federal Indian law. A prime example of
this legal regression can be found in the recent tribal labor
management decisions taken by the National Labor Relations
Board and the federal courts in the 2007 San Manuel case.
As you know well, the NLRA is the primary law governing
relations between unions and employers. The NLRA defines
employer as ``any person acting as an agent of an employer,
directly or indirectly,'' but does not include within the term
the United States, state governments, or any political
In San Manuel the NLRB asserted jurisdiction over tribal
government employees in a case brought against the San Manuel
Band, a federally recognized Indian tribal government, by a
union competing with another union for the right to organize
tribal government employees. Upon appeal by the tribe the
federal courts found against the tribe, holding that the NLRB
may apply the NLRA to tribal government employees. This was
their holding despite the fact that there had been no
intervening change in the NLRA statute for 70 years and despite
the fact that the NLRB had ruled otherwise for decades.
The court's rationale was, in reality, a political policy
decision, concluding that because the San Manuel tribal
government casino employees--employs many non-Indians and
caters primarily to non-Indian customers that it must be
treated like a commercial rather than a governmental
enterprise. That rationale was wrongheaded, both as a matter of
law and of policy. For the Seneca Nation, as you can safely
assume for all American Indian tribal governments, it is an
affront to be told that our own tribal labor management laws,
enacted as an expression of our own sovereignty on our own
tribal lands, are not sufficient to protect our tribal
The Seneca Nation is proud of our labor policies and
practices and cedes ground to no one, including the NLRB and
the federal government, in our demonstrated commitment to
workplace fairness, security, and benefits. For example, we
have often exercised our sovereign right to utilize union labor
in the construction of our casinos, and our government
buildings, and our other public works projects. Our exercise of
our sovereign control of our labor management relations
reflects the fact that good government labor policy is good for
When a regulatory body like the NLRB or a reviewing court
conjures up a new interpretation of longstanding statutory law
in violation of the federal laws and treaties dealing with
Indian nations we believe it is the duty of the Congress to
enact a clarifying amendment which makes the statute reflect
the original congressional intent, consistent with the
Constitution and treaties of the United States.
This is why we urge you to include in your labor reform
legislation the provisions of H.R. 2335, the Tribal Labor
Sovereignty Act. This would clarify the NLRA to once again be
interpreted to expressly exempt tribal government employers
from the reach of the NLRA and the NLRB. I want to personally
thank the sponsor of H.R. 2335, Congresswoman Kristi Noem, and
her 63 co-sponsors, as well as the chairman of this committee,
Chairman Roe, and the chairman of the full committee, Mr.
Kline, for your support for this legislation.
Tribal self-determination has long been the goal of federal
Indian policy, dating back to at least July of 1970, when
President Nixon issued his ``Special Message to Congress on
Indian Affairs.'' Since then much progress has been made toward
restoring recognition and respect for tribal sovereignty and
self-determination, but the NLRB's decision in the San Manuel
case to override tribal authority and allow a federal takeover
in this area of tribal governance is an outrage and it must be
By acknowledging the governmental status of Indian tribes
H.R. 2335 will respect Indian nation governments as other
governments are respected for purposes of the NLRA with regard
to tribal government activities on tribal lands. The promise of
labor law reform will positively impact Indian country only if
it advances the first principles that are at the foundation of
federal Indian policy at its best, that tribal nations are
governments whose exclusive authority to govern all economic
activity in our territory should be fully respected as a matter
of federal law.
Resurrecting this tribal territorial sovereignty approach
should be the urgent focus of any new labor law reform efforts.
H.R. 2335 would do just that and deserves your support through
Thank you for the opportunity to provide this testimony and
I ask that it be made part of the record of the hearing. Nya-
[The statement of Mr. Porter follows:]
Prepared Statement of Hon. Robert Odawi Porter, President,
Seneca Nation of Indians
Chairman Roe, Ranking Member Andrews, and members of the
Subcommittee, I am thankful that you are well and I am pleased to
appear before you today to testify on how you might strengthen the
National Labor Relations Act (NLRA) while at the same time
strengthening respect for tribal sovereignty by enacting H.R. 2335, the
Tribal Labor Sovereignty Act of 2011.
I ask that my written testimony be placed in the record on behalf
of the Seneca Nation of Indians, which I lead as its elected President.
Background on the Seneca Nation of Indians
The Seneca Nation of Indians (``Nation'') is one of America's
earliest allies, historically aligned with the other members of the
historic Haudenosaunee (Six Nations Iroquois) Confederacy and living in
peace with the American people since the signing of the Canandaigua
Treaty over 217 years ago on November 11, 1794, 7 Stat. 44. Our Nation
has entered into numerous treaties and agreements with the United
States since that time. We have always sought to live up to our
commitments, despite the fact that, repeatedly, the United States has
not reciprocated in kind.
The United States made several key promises to the Seneca Nation in
our Canandaigua Treaty. Of direct relevance to this hearing today, was
a federal treaty recognition that the Seneca Nation is a sovereign
nation and a federal treaty assurance that our property and activities
on our Territory would not be interfered with. In particular, the
United States expressly guaranteed that we would retain the ``free use
and enjoyment'' of our lands. This promise has served as the basis for
the unparalleled level of freedom possessed by the Seneca people today.
Because of our treaty-protected sovereign freedom, our Seneca
Nation has been able to achieve some success in recovering from nearly
200 years of economic deprivation inflicted upon us by the United
States due to devastating losses of our lands and resources. Both our
Nation government and individual Seneca citizens have benefited from
the opportunity to resume our trade relations with non-Indians during
the last 40 years, focusing primarily on available business involving
tobacco, gaming, hospitality, and ancillary ventures.
Key to our economic success has been our governmental sovereignty--
our right to govern, in our own way, what happens on our land.
Federal labor law must be clarified to respect tribal sovereignty
Many aspects of our treaty-recognized freedoms have been eroded
over time. All three branches of the federal government--judiciary,
executive, and legislative--have directly caused or allowed this
erosion to occur, sometimes even by overturning decades of precedent.
A prime example of this legal regression can be found in recent
tribal labor management decisions taken by the National Labor Relations
Board (NLRB) and the federal courts in the San Manuel Indian Bingo and
Casino v. NLRB case, 475 F.3d 1306 (D.C. Cir. 2007).
As you know full well, the National Labor Relations Act (NLRA), 29
U.S.C. Sec. 160 et seq., is the primary law governing relations
between unions and employers and guarantees the right of employees to
organize, or not to organize, a union and to bargain collectively with
their employers. The NLRA applies to ``employers,'' and Section 2(2) of
the Act defines ``employer'' as ``any person acting as an agent of an
employer, directly or indirectly,'' but does not include the United
States, State governments, or any political subdivision thereof.
In San Manuel, the NLRB asserted subject-matter jurisdiction over
tribal government employers in a case brought against the San Manuel
Band of Serrano Mission Indians, a federally recognized Indian tribal
government, by a union competing with another union for the right to
organize tribal government employees. The San Manuel Band appealed to
the federal courts, which found against the San Manuel Band, holding
that the NLRB may apply the NLRA to tribal government employees at a
casino the San Manuel Band operates on its lands. Despite the fact that
there had been no intervening change in the NLRA statute, the NLRB and
the courts reversed 70 years of precedent to find that Indian tribal
governments are not exempt from NLRA requirements because they
concluded that the NLRA statutory language contains no express
exemption as it does for the federal and state governments. We believe
this holding was unfounded and violative of our Treaty rights.
The judicial rationale was in reality a political policy
rationale--the NLRB and the courts as a matter of policy concluded that
because the San Manuel tribal government casino employs many non-
Indians and caters primarily to non-Indian customers, it and all other
similar tribal government enterprises should be treated like a
commercial rather than governmental enterprise.
That rationale was wrong-headed, both as a matter of law, and of
policy. For the Seneca Nation, as you can safely assume for all America
Indian tribal governments, it is an affront to be told our own tribal
labor management laws, enacted as an expression of our own tribal
sovereignty, on our own tribal lands, are not sufficient to protect our
tribal government employees.
The Seneca Nation is proud of our labor policies and practices.
Seneca Nation employees are offered a compensation and benefits package
that is more than competitive within our market, with best in class
protections for employee rights and personnel procedures. We have also
chosen to rely heavily on union labor, through project-labor
agreements, in the construction of our gaming facilities. We cede
ground to no one, including the NLRB and the federal government, in our
demonstrated commitment to workplace fairness, security and benefits.
Our exercise of our sovereign control of our labor management relations
reflects the fact that good government labor policy is good for
business. So you can imagine our displeasure and disappointment with
the contrary judgment in the San Manuel case.
At issue in that case was whether the exclusions in the NLRA
(``[t]he term `employer' * * * shall not include the United States or
any wholly owned Government corporation * * * or any State or political
subdivision thereof * * *.'') were intended to cover tribal government
employers. The Court said the ``Board could reasonably conclude that
Congress's decision not to include an express exception for Indian
tribes in the NLRA was because no such exception was intended or
exists.'' Id. at 1317.
When a regulatory body like the NLRB or a reviewing court conjures
up a new interpretation of longstanding statutory law in violation of
federal laws and treaties dealing with Indian nations, we believe it is
the duty of the U.S. Congress to enact a clarifying amendment which
makes the statute reflect the original congressional intent, consistent
with the Constitution and treaties of the United States.
The Seneca Nation and other tribal governments have always sought
to have key federal statutes consistently reflect and honor our treaty
agreements and our governmental status. We have always insisted that
federal law treat our tribal governments as it treats other
governments. When court decisions or federal officials reinterpret
longstanding statutory provisions to treat tribes as something other
than governments, Congress should enact clarifying amendments to the
This is why we urge you to include in your labor reform legislation
the provisions of H.R. 2335, the Tribal Labor Sovereignty Act of 2011,
which would clarify the NLRA to once again be interpreted to expressly
exempt tribal government employers from the reach of the NLRA and the
NLRB. The Seneca Nation thanks the sponsor of H.R. 2335, Congresswoman
Kristi Noem, and her 63 co-sponsors, including you, Chairman Roe, as
well as the Chairman of the full Committee, Mr. Kline.
Tribal self-determination has long been the goal of federal Indian
policy, dating back at least to July, 1970 when President Nixon issued
his ``Special Message to Congress on Indian Affairs.'' Since then much
progress has been made toward restoring recognition and respect for
tribal sovereignty and self-determination. But the NLRB's decision in
the San Manuel case to override tribal authority and allow a federal
takeover in this area of tribal governance is an outrage and must be
By acknowledging the governmental status of Indian tribes, the Noem
bill, H.R. 2335, will respect Indian nation governments as other
governments are respected for purposes of the application of the NLRA
to tribal governmental activities on tribal lands.
The promise of labor law reform will positively impact Indian
Country only if it advances the first principles that are at the
foundation of federal Indian policy at its best--tribal nations are
governments whose exclusive authority to govern all economic activity
on our territory is fully respected as a matter of federal law.
Resurrecting this tribal territorial sovereignty approach should be the
urgent focus of any new labor law reform efforts. H.R. 2335 would do
just that, and deserves your support through to enactment.
Thank you for this opportunity to provide testimony and I ask that
it be made part of the record of this hearing. We also thank you for
holding this hearing today. We hope it leads to prompt enactment of
Chairman Roe. Thank you, President Porter.
STATEMENT OF WILLIAM L. MESSENGER, STAFF ATTORNEY, NATIONAL
RIGHT TO WORK LEGAL DEFENSE FOUNDATION
Mr. Messenger. Thank you, Chairman Roe, Ranking Member
Andrews, distinguished committee members. Thank you for the
opportunity to testify today on proposals to amend the National
Labor Relations Act.
While the act needs to be improved in a number of areas I
would like to focus today on the importance of protecting the
right to a secret ballot election. I am a staff attorney with
the National Right to Work Legal Defense Foundation. Since it
was established in 1968 the foundation has provided free legal
aid to thousands of individuals employees whose rights have
been violated as a result of compulsory unionism.
Among other things, my colleague and I have represented
many employees and actions to protect their right to a secret
ballot, including the Dana and Lamons Gasket cases.
Regrettably, the National Labor Relations Act is predicated on
forcing individual employees to associate with unions based on
the desires of a majority of their coworkers.
This in and of itself is wrongful. The right of each
citizen to freely associate should not be subjected to the
tyranny of the majority.
Congress should end this policy by amending the National
Labor Relations Act to prohibit exclusive representation and
compulsory dues requirements with the National Right to Work
Act. However, to the extent that this policy persists, at a
bare minimum Congress should ensure that at least a majority of
employees desire union representation, and the best way to do
this is to make a secret ballot election a condition for
The secret ballot is clearly superior for ascertaining
employee free choice than its alternative, which is employer
recognition pursuant to a card-check. Individuals are obviously
more apt to vote their conscience in the privacy of a voting
booth than when being solicited by a union organizer to sign a
card. It is no accident that secret ballot elections are the
cornerstone of all democratic systems.
But secret ballots are also inherently superior to employer
recognition for another reason, because only they are conducted
and supervised by the board itself. In an election the board
has actual knowledge of whether or not individual employees
have voted for or against unionization before it is imposed.
This is not true of employer recognition. It is truly a
private agreement in which an employer decrees a particular
union to be the exclusive representative of its employees.
The board is not privy to this agreement and has no
knowledge whatsoever of whether or not it reflects employee
free choice. And in particular, the board has no knowledge of
how those cards were obtained from individual employees.
And there are compelling reasons to suspect that employer
recognition does not necessarily reflect employee free choice,
but rather only the perceived self-interests of the union and
the employer. And indeed, most employer recognition in and of
itself is the product of a prearranged agreement between the
employer and union before the union becomes a representative of
Congress should not blindly entrust employees'
associational rights to unions and employers. It is akin to
putting the foxes in charge of the henhouse. Instead, Congress
should require that a federal agency, the board, independently
verify whether a majority of employees desire union
representation in a secret ballot election before they are
And in addition, Congress should also amend the National
Labor Relations Act to protect employees' rights after they are
unionized--their right to be decertify or remove a union that
is currently acting as a representative that the employees no
longer support. As I discussed in my written testimony, the
National Labor Relations Board has erected an increasing number
of bars and obstacles to employees exercising their right to
decertify a union they no longer support, and these bars and
obstacles make it exceedingly difficult for employees to remove
unions that they no longer support. I believe that Congress
should also remove these bars to effectuate employee free
Thank you. I would like to move that my written testimony
be included in the record as part of this committee hearing,
and my oral statement. And I look forward to answering any
questions you may have.
[The statement of Mr. Messenger follows:]
Prepared Statement of William L. Messenger, Staff Attorney,
National Right to Work Legal Defense Foundation
Chairman Roe and distinguished Representatives: Thank you for the
opportunity to testify today in this hearing to examine proposals to
strengthen the National Labor Relations Act. While the NLRA needs to be
improved in a wide number of ways, I would like to focus my testimony
today on the importance of protecting employees' right to a secret
I am a Staff Attorney with the National Right to Work Legal Defense
Foundation. Since the Foundation was founded in 1968, it has provided
free legal aid to employees who choose to exercise their right to stand
apart from unions and their agendas. Foundation attorneys, including
myself, have represented numerous employees in cases that involve
protecting their right to a secret ballot election or protecting
employees from the abuses of top-down union organizing.\1\
Protecting employees' privacy with a secret-ballot election is the
very least that should be done to ameliorate the harm the government
inflicts on employees through its policies of monopoly representation
and compulsory unionism. The NLRA is predicated on forcing individuals
to associate with unions. It does so by empowering unions to act as
``exclusive representatives'' of all employees in a bargaining unit
under Sec. 9(a) of the Act, 29 U.S.C. Sec. 159(a), irrespective of
whether each employee desires this ostensible representation, and by
permitting unions to force employees to support them financially upon
pain of losing their jobs. See 29 U.S.C. Sec. 158(a)(3).
The federal government forcing individual employees not only to
accept union representation against their will, but also to pay for
this unwanted representation, is an affront to each individual's right
to choose with whom he or she associates. This compulsion is wrong
irrespective of whether or not the individual's co-workers desire to
associate with a union. Each citizen's fundamental right to freedom of
association should not be subjected to the tyranny of the majority.
Thus, Congress should amend the NLRA to repeal monopoly representation
or prohibit compulsory unionism with a national Right to Work Act.
However, to the extent that the federal government insists on
imposing monopoly representation and compulsory unionism on workers
under the NLRA, at a minimum it must ensure that a majority of workers
truly support this imposition. The best and most obvious way to
guarantee that a majority of employees want union representation is a
secret ballot election.
Regrettably, the NLRA currently permits unionization based on
private agreements between unions and employers, and without a secret-
ballot election. See 29 U.S.C. Sec. 159(a). Additionally, the National
Labor Relation's Board is actively pursuing policies to deprive
employees of their existing statutory right to a secret-ballot election
to decertify unions that they no longer support. See, e.g., Lamons
Gasket, 357 NLRB No. 72 (2011). Congress should thereby amend the NLRA
to permit unionization based only on the results of a secret-ballot and
to remove all Board-imposed bars on employees' right to a
I. Secret-Ballot Elections Must Be Required Under the NLRA Because They
Are Superior to Employer Recognition of a Union
That the superiority of secret-ballot elections could require
extended argument is itself remarkable. Every American understands
instinctively that such elections are the cornerstone of any system
that purports to be democratic. Thus, the Supreme Court has long
recognized that Asecret elections are generally the most satisfactory--
indeed the preferred--method of ascertaining whether a union has
majority [email protected] NLRB v. Gissel Packing Co., 395 U.S. 575, 602
Of course, the merit of any procedure must be evaluated in
comparison to its alternatives. The alternative to the secret-ballot is
``employer recognition'' or ``voluntary recognition,'' whereby an
employer decrees that a particular union shall be the exclusive
representative of its employees. This grant of recognition is generally
predicated on an assertion that a majority of employees signed cards
authorizing the union to act as their representative.
Secret-ballot elections are superior to employer recognition not
only for the most obvious reason--that individuals are more apt to vote
their conscience in the privacy of a voting booth than when being
pressured by union organizers to sign an authorization card. See
Section I(C), infra. Secret-ballot elections are also superior to
employer recognition because the Board conducts and supervises the
elections. By contrast, employer recognition is a private arrangement
between a union and employer to which the Board is not privy. The Board
has no actual knowledge of whether an employer's recognition of a union
reflects the employees' free choice. See Sections I(B), infra. And
there are compelling reasons to suspect that it will not. See Section
I(C), infra. Given that Congress cannot trust the associational rights
of employees to the self-interests of union officials and employers,
unionization should only be permitted pursuant to a Board-conducted
A. The Board Does Not Know if an Employer-Recognized Union
Has the Support of a Majority of Employees
Secret-ballot elections differ from employer recognition in that
the latter is not conducted or supervised by the Board. Employer
recognition is simply a private agreement in which an employer agrees
to recognize a particular union as the exclusive representative of its
employees. The Board is not a party to a recognition agreement. It does
not review recognition agreements either before or after employers and
unions enter into them. The Board has no actual knowledge whether or
not an employer-recognized union actually enjoys the true support of a
majority of employees.
Unions and employers generally claim in their recognition
agreements that the union has the support of a majority of employee
based on authorization cards allegedly signed by employees. But the
Board has no independent knowledge as to the truth or falsity of this
claim. Most importantly, the Board has no knowledge of the conditions
under which the cards were procured from employees.\2\
Accordingly, the NLRA's current policy of granting legal validity
to employer-recognized unions, see 29 U.S.C. Sec. 159(a), is
predicated on the blindly trusting that a private agreement between a
union and employer accurately reflects what employees actually desire.
This is untenable, as the mere ``fact that an employer bargains with a
union does not tell us whether the employees wish to be represented by
the union.'' Seattle Mariners, 335 NLRB 563, 567 n.2 (2001) (Member
Of course, in a secret-ballot election, the Board controls the
conditions under which votes are cast and counts the ballots itself. In
an election, unlike a card check, the Board has independent and actual
knowledge as to whether a majority of those voting want union
representation. For this reason alone, Board-conducted elections are
inherently superior to card check recognition.
B. That an Employer Makes a Union the Representative of its
Employees Is Not a Reliable Indicator of Whether
Employees Support that Union
Not only does the government not know if employer-recognized unions
actually have the uncoerced support of a majority of employees, there
are several compelling reasons to believe that employee free choice is
not reflected in private recognition agreements. Instead, the
agreements reflect little more than the union and employer's perceived
First, at their most basic level, recognition agreements are
agreements in which two parties agree to take something from a third-
party. Specifically, Party A (the employer) and Party B (the union)
agree that a third-party (employees) shall surrender rights to Party B.
The very construct of this arrangement makes it an inherently
unreliable indicator of the desires of the third-party employees, as
both parties to the agreement can satiate their self-interests at the
expense of employees who are not privy to the agreement.
Second, unions and employers have a number of self-interested
reasons to enter into recognition agreements that have nothing to do
with effectuating employee free choice. Indeed, there is a long and
sordid history of employers recognizing unions that lack the uncoerced
support of a majority of employees.\3\
A union's self-interest in being recognized by an employer as its
employees' representative is obvious. It is to acquire more members,
more compulsory dues payments (in non-Right to Work states), more
contributions to underfunded pension and welfare plans, and more power
for union officials. Gaining more dues-paying members is a top priority
for union officials, as union membership has been in general decline
for decades.\4\ Unions have an overwhelming self-interest in being
recognized as monopoly representatives irrespective of whether or not
employees actually support them.
Employers are apt to recognize unions to satiate perceived business
interests, and not to effectuate employee free choice. These business
interests include getting a union to cease waging a coercive
``corporate campaign'' against the employer, which involve a ``wide and
indefinite range of legal and potentially illegal tactics,'' such as
``litigation, political appeals, requests that regulatory agencies
investigate and pursue employer violations of state and federal law,
and negative publicity campaigns aimed at reducing the employer's
goodwill with employees, investors, or the general public.'' Smithfield
Foods v. UFCW, 585 F.Supp.2d 789, 795 (E.D. Va. 2008) (quoting Food
Lion, Inc. v. UFCW, 103 F.3d 1007, 1014 n.9 (D.C. Cir. 1997)).\5\
Employers have also agreed to make unions the representative of their
employees to obtain their political assistance;\6\ to cut off
organizing campaigns of unions less-favored by the employers;\7\ to
obtain bargaining concessions at the expense of other employees that
the unions represent;\8\ and to obtain union concessions at the expense
of employees whom the unions organize in the future.\9\
Employers motivated by these and other perceived interests are
obviously apt to recognize unions irrespective of employee support for
them. Employees are little more than chattel in these arrangementsCthe
consideration the employer is willing to trade to get something from
the union. Given that unions and employers can be counted on to pursue
their own perceived self-interests, it is irrational for the federal
government to defer to their private decisions about whether or not
employees want to be unionized.
Third, employer recognition of a union is usually the product of a
pre-negotiated ``organizing agreement'' between the employer and union.
In an organizing agreement, an employer agrees in advance to assist a
particular union with organizing its employees. This employer
assistance generally includes gag-clauses on any employer speech about
the union or unionization, granting the union access to employees'
workplaces for organizing, the release of private information about
nonunion employees to the union, such as their home addresses and
contact information, and a ban on secret-ballot elections conducted by
These private organizing agreements establish conditions
inhospitable to employee free choice. For example, to ensure that
employees make informed decisions about whether to support or oppose
unionization, Congress amended the NLRA to facilitate an ``uninhibited,
robust, and wide-open debate'' between employers and unions. Chamber of
Commerce v. Brown, 554 U.S. 60, 67-68 (2008) (citation omitted).\11\
Indeed, employees have an implicit ``underlying right to receive
information opposing unionization'' under the NLRA. Id. at 68. Yet,
organizing agreements generally include gag-clauses on employer speech
regarding unionization.\12\ Some organizing agreements go even further,
requiring that employers speak and conduct captive audience meetings on
behalf of the union.\13\ The intent and effect is to deprive employees
of their ``right to receive information opposing unionization,'' so
that employees hear only one side of the story during organizing
campaigns--that spun by the union.
Similarly, Congress did not grant unions any right to campaign in
employees' workplace, see Lechmere v. NLRB, 502 U.S. 527, 532-34
(1992), or any right to personal information about employees prior to
petitioning for an election. See Always Care Home Health Serv., 1998 WL
2001253 (NLRB G.C. 1998). Organizing agreements generally provide
unions with both forms of employer assistance to allow union organizers
to approach and harass employees in both their workplace and at their
homes to sign union authorization cards.
Overall, the procedure prescribed by private organizing
agreements--a systematic campaign jointly implemented by a union and
employer against employees in their workplace and homes and in an
environment devoid of relevant information about the union--are
antithetical to employee free choice. These procedures are deliberately
designed to ensure that employees sign cards that make the union their
monopoly representative. It is unconscionable for Congress to blindly
assume that the employer recognitions that are the fruit of this
poisonous tree actually reflect the free will of employees.
Finally, the Supreme Court warned decades ago that deferring to
even ostensibly ``good faith'' employer and union beliefs about
employee preferences ``would place in permissibly careless employer and
union hands the power to completely frustrate employee realization of
the premise of the Act--that its prohibitions will go far to assure
freedom of choice and majority rule in employee selection of
representatives.'' International Ladies' Garment Workers v. NLRB, 366
U.S. 731, 738-39 (1961) (emphasis added); cf. Auciello Iron Works v.
NLRB, 517 U.S. 781, 790 (``There is nothing unreasonable in giving a
short leash to the employer as vindicator of its employees'
organizational freedom''). The D.C. Circuit reiterated this warning in
Nova Plumbing, Inc. v. NLRB, 330 F.3d 531 (D.C. Cir. 2003), when it
overruled a Board decision that deferred blindly to a recognition
agreement between an employer and union without independently verifying
whether employees actually supported the union. ``By focusing
exclusively on employer and union intent, the Board has neglected its
fundamental obligation to protect employee Sec. 7 rights, opening the
door to even more egregious violations than the good faith mistakes at
issue in Garment Workers.'' Id. at 537.
Indeed, an ostensible purpose of the NLRA is to protect employee
rights from employers and unions. Section 7 of the Act grants
[email protected] the right to choose or reject union representation. 29
U.S.C. Sec. 157. Sections 8(a) and 8(b) protect employee Sec. 7
rights from the machinations of employers and unions. 29 U.S.C.
Sec. Sec. 158(a-b). To blindly trust employer and union decisions
about how employees want to exercise their Sec. 7 rights inverts the
structure of the NLRA. It is akin to putting the foxes in charge of the
henhouse. Congress must change this irrational policy.
C. Voting in the Privacy of a Voting Booth Effectuates Free
Choice Better Than Being Solicited to Sign a Card
By a Union Organizer
In addition to the fact that elections are conducted and supervised
by the Board, the procedure of a secret-ballot election is also far
superior to that of a card check. Casting a ballot in the privacy of a
voting booth is far more conducive to free choice than being solicited
to sign an authorization cards in their presence of one or more union
organizers. Only in secret-ballot elections are employees given the
privacy and space to vote their conscience free from immediate external
Moreover, once an employee has made the decision ``yea or nay'' by
voting in a secret-ballot election, the process is at an end. By
contrast, a choice to ``vote'' against the union by not signing an
authorization card does not end the decision-making process for an
employee in the maw of a card check drive. Often, it represents only
the beginning of the harassment. Union organizers can solicit
individuals again and again (and again) until they break down and sign
Employee experience confirms that union organizers frequently
harass, mislead, and threaten employees to make them sign union cards.
Testimony and statements by employees who have been subjected to card
check campaigns can be found in the appendix to this testimony. In the
course of counseling employees who have been subjected to card-check
campaigns, my colleagues and I at the Foundation are also familiar with
the tactics used by union agents to cajole employees into signing
cards: incessant home visits; informing employees that signing a card
is just for more information, to merely express interest in the union,
or to obtain a secret-ballot vote; promising employees unrealistic
benefits after unionization; falsely informing employees that the union
already has a majority and will soon be in power; and threatening
employees with future discrimination when the union does come into
Union organizers have a strong incentive under current Board law to
use these and other deceitful and unlawful tactics. Under current law,
a signed card is presumptively valid. To invalidate a card used to
support employer recognition, an unfair labor practice charge must be
filed with the Board within six months (which is itself a daunting task
for individuals unfamiliar with administrative procedures and labor
law). The employee then has the burden of presenting clear and
convincing evidence that the card was obtained through a material
misrepresentation or coercion.\14\ This burden is exceedingly difficult
to meet because most union misrepresentations will not invalidate a
card, to include union claims that signing a card is necessary to have
a meeting, to get more information, or to have an election (unless the
employee is expressly told that the card can only be used for this
purpose).\15\ And usually the only evidence of what a card signer was
told will be their recollection of a conversion--i.e., ``he-said, she-
said'' testimony--that union agents can easily deny. Even if an
employee surmounts all of these burdens, only the particular card at
issue will be invalidated and not the union's entire card-check
campaign (unless the invalidated card or cards deprives the union of
its majority). Given the low probability that pressuring and misleading
employees will invalidate a card-check campaign, union organizers have
little disincentive to using such unscrupulous to get employees to sign
Perhaps the strongest evidence of the superiority of a secret-
ballot election to a card check is that conduct that interferes with
employee free choice in elections is inherent to any card check. In an
election, the Board attempts to ensure that ``laboratory'' conditions
exist in which the uninhibited desires of the employees can be
ascertained. See General Shoe, 77 NLRB 124, 127 (1948). Conduct by
employers and unions that upset these laboratory conditions will result
in the election being overturned, even if that conduct does not rise to
the level of an unfair labor practice. Id. Conduct that will result in
the overturn of a Board election includes:
(1) electioneering activities, or even prolonged conversations with
prospective voters, at or near a polling place because, among other
things, ``[t]he final minutes before an employee casts his vote should
be his own, as free from interference as possible,'' Milchem, Inc., 170
NLRB 362, 362 (1968);\16\
(2) the union or employer keeping a list of employees who vote as
they enter or exit the polling place (other than the official
eligibility list);\17\ and
(3) a union official handling cast ballots, even in the absence of
proof of tampering, because, where ``ballots come into the possession
of a party to the election, the secrecy of the ballot and the integrity
of the election process are called into question,'' Fessler & Bowman,
Inc., 341 NLRB 932, 933 (2004).
This sort of objectionable conduct occurs in all card check
campaigns. When an employee signs (or refuses to sign) an authorization
card, he is in the presence of the union organizer(s) who is attempting
to get him to sign that card. In all cases the employee's decision is
not secret because the union has the cards and maintains a list of who
has signed one and who has not. Union officials handle these cards, as
they are the individuals who collect them. Conduct that would not be
tolerated in a Board-conducted election occurs in any card-check
The Board recognized this failing of employee-signed cards and
petitions in Underground Service Alert, 315 NLRB 958 (1994). There, a
majority of employees voted for union representation in a
decertification election. However, before the electoral results were
known, a majority of employees delivered a signed petition to their
employer stating their opposition to the union. The Board held that the
petition was a ``less-preferred indicator of employee sentiment,''
particularly as compared to ``the more formal and considered majority
employee preference for union representation which was demonstrated by
the preferred method--the Board-conducted secret-ballot election.'' Id.
at 961. This is because an election, typically * * * is a more reliable
indicator of employee wishes because employees have time to consider
their options, to ascertain critical facts, and to hear and discuss
their own and competing views. A period of reflection and an
opportunity to investigate both sides will not necessarily be available
to an employee confronted with a request to sign a petition rejecting
Id. at 960 (citation omitted). Moreover, ``[n]o one disputes that a
Board-conducted election is much less subject to tampering than are
petitions and letters.'' Id.
Thus, even the rare card check drive that does not involve unfair
labor practices committed against employees does not approach the
laboratory conditions guaranteed in Board-conducted elections. In a
card-check, union agents directly solicit employees to sign
authorization cards (and thereby cast their ``vote''), stand over them
as they ``vote,' know with certainty how they ``voted,'' and then
physically collect and handle these purported ``votes.'' The
superiority of Board supervised secret-ballot elections for protecting
employee free choice to such a coercive procedure is beyond
peradventure. Congress should thereby amend the Act to permit
unionization only pursuant to a secret-ballot election.
II. The Right of Employees' to Remove a Union by Secret-Ballot Election
Should Be Protected from the Board's Invention of Bars and
Other Obstacles to Decertification Elections
Section 9(c)(1)(A)(ii) of the NLRA expressly grants employees the
right to petition for a decertification election to remove the union
currently acting as their representative. 29 U.S.C. Sec.
159(c)(1)(A)(ii). Congress saw fit to prohibit the conduct of such
elections only when ``within * * * the preceding twelve-month period, a
valid election shall have been held.'' 29 U.S.C. Sec. 159(c)(3).
Notwithstanding that the NLRA provides for only one bar to the
conduct of elections, the Board has invented numerous new bars to
prevent employees from decertifying unions that they no longer support.
(1) a ``contract bar,'' which precludes employee petitions for
decertification elections during the first three years of a collective
bargaining agreement, save a 30-day window period near the end of that
period, see Waste Management of Maryland, 338 NLRB 1002 (2003);
(2) a ``recognition bar,'' which precludes employee petitions for
decertification elections for up to one year after an employer
recognizes a union as its employees' representative, see Lamons Gasket,
357 NLRB No. 72 (2011); and
(3) a ``successor bar,'' which precludes employee petitions for
decertification for up to one year after an employer is succeeded by
another employer, see UGL-Unicco Services, 357 NLRB No. 76, *9 (2011).
The latter two election bars were reinstituted by President Obama's
Board appointees to reverse prior decisions that permitted employees to
request a secret-ballot election for a certain time period after
employer recognition, see Dana Corp., 351 NLRB 434 (2007), overruled by
Lamons Gasket, and after a change in the identity of their employer,
see MV Transportation, 337 NLRB 770 (2002), overruled by UGL-Unicco.
In addition to erecting flat prohibitions on decertification
elections, the Board has also instituted policies to make
decertification effectively impossible for many employees. This
includes, among other things, maintaining a ``merger doctrine'' under
which, if an employer and union agree to merge one or more bargaining
units into a single multi-location unit, any employee-filed
decertification petition must cover the entire merged unit.
Decertification petitions filed by employees that cover only the
facility at which they are employed will be dismissed, even if that is
the unit in which the employees were organized.\18\
The result of this doctrine is that unions can organize employees
one facility at a time--or even one department at a time under a new
Board ruling \19\--and then merge their unit into a much larger one
that employees can never hope to decertify because merely requesting a
decertification election requires a showing of interest signed by 30%
of employees in the unit. Meeting this threshold, much less winning the
election, is beyond the capabilities of most employees if their unit
consists of thousands employees at multiple facilities.\20\
For example, assume that a grocery store chain has 20 area stores
and 100 employees at each store. With the employer's complicity, a
union can organize the employees of each store, one-at-a-time, by
merely obtaining authorization cards from 51 store employees. The union
can then merge each newly-organized store with all other organized
stores into one combined unit. If the union organizes all stores, it
can create a combined unit of 2,000 employees spread across 20
locations. An employee at a given store who wishes to decertify the
union will face the herculean task of obtaining a showing of support
for decertification from 667 employees scattered amongst multiple
This example actually understates the true breadth and effect of
the merger doctrine because some merged units are nationwide in scope.
For example, the Teamsters have merged over 1,000 facilities of United
Parcel Service (UPS) into a single unit.\21\ Even if all employees of a
particular facility, or even numerous facilities, wanted absolutely
nothing further to do with the Teamsters, they are without any viable
recourse to vote the union out of power.
Taken together, the combined effect of the Board's various election
bars and merger doctrine is to deny employees their statutory right to
choose, by secret-ballot election, whether or not they wish to continue
to be represented by a particular union. An employer's recognition of a
union will bar an election for up to one year.
The union's subsequent signing of a collective bargaining agreement
will then bar an election for another three years, during which time
the union can compel all employees to support it financially (except in
Right to Work states). The merger of the employees' bargaining unit
into a larger unit will effectively prevent the employees from ever
voting on whether they desire union representation. Under this regime,
unions and employers can squelch employees' right to reject unwanted
Congress should not permit the Board to turn union representation
into a proverbial ``roach motel,'' where employees can check in, but
can never check out. To protect the right of employees to a secret-
ballot election to decertify unions that they no longer support,
Congress should amend:
(1) NLRA Section 9(c)(3), 29 U.S.C. Sec. 159(c)(3), to provide
that ``This limitation is the only limit that may be placed on the
conduct of elections;'' and
(2) NLRA Section 9(c), 29 U.S.C. Sec. 159(c), to include a new
section 6 that provides that ``In an election requested under
subsection (1)(A)(ii), a bargaining unit that consists of represented
employees at a single facility shall always be considered an
appropriate unit notwithstanding the merger or inclusion of the
employees in a larger, multi-facility, or multi-employer bargaining
For these reasons, Congress should amend the NLRA so that exclusive
union representation can be imposed pursuant only to a secret-ballot
election, and amend the NLRA to ensure that employees can choose to
reject union representation via a secret ballot election at any time
other than within one year after a prior election. If employees'
freedom to associate with a union is going to be subjected to the
tyranny of the majority, at a minimum Congress should ensure that a
majority of employees truly want to associate with that union.
\1\ See, e.g., Lamons Gasket, 357 NLRB No. 72 (2011); Dana Corp.
(Int'l Union, UAW), 356 NLRB No. 49 (2010), on appeal, No. 11-1256 (6th
Cir.); Dana Corp., 351 NLRB 434 (2007); Mulhall v. Unite Here, 667 F.3d
1211 (11th Cir. 2012); Adcock v. Freightliner LLC, 550 F.3d 369 (4th
\2\ Similarly, third party arbitrators often used by employer and
unions to verify card checks have no knowledge of how the union
authorization cards were obtained from employees. These third parties
are little more than human calculators whose role is merely to count
the cards provided by the union against a list of employees provided by
the employer. The verification of a card check by an arbitrator says
nothing about the conditions under which the union or employer obtained
the cards from employees, or the validity of the employer's list.
\3\ See e.g., Duane Reade, 338 NLRB 943 (2003); Fountain View Care
Center, 317 NLRB 1286 (1995), enf'd, 88 F.3d 1278 (D.C. Cir. 1996);
Brooklyn Hospital Center, 309 NLRB 1163; Famous Castings Corp., 301
NLRB 404 (1991); Systems Mgmt., 292 NLRB 1075 (1989), remanded on other
grounds, 901 F.2d 297 (3rd Cir. 1990); Anaheim Town & Country Inn, 282
NLRB 224 (1986); Meyer's Cafe & Konditorei, 282 NLRB 1 (1986); SMI of
Worchester, 271 NLRB 1508 (1984); Price Crusher Food Warehouse, 249
NLRB 433 (1980); Vernitron Electrical Components, 221 NLRB 464 (1975),
enf'd 548 F.2d 24 (1st Cir. 1977); Pittsburgh Metal Lithographing Co.,
158 NLRB 1126 (1966).
\4\ See Laura J. Cooper, Privatizing Labor Law: Neutrality/Check
Agreements and the Role of the Arbitrator, 83 Ind. L.J. 1589, 1591
\5\ See, e.g., Cooper, 83 Ind. L.J. 1589, 159-93; Daniel Yager &
Joseph LoBue, Corporate Campaigns and Card Checks: Creating the Company
Unions of the Twenty-First Century, 24 Empl. Rel. L.J. 21 (Spring
1999); Herbert R. Northrup, Union ``Corporate Campaigns'' as Blackmail:
the RICO Battle at Bayou Steel, 22 Harv. J.L. & Pub. Pol=y 771, 779-93
(1999); Pichler v. UNITE, 228 F.R.D. 230, 234-40 (E.D. Pa. 2005)
(corporate campaign for organizing agreement), aff'd, 542 F.3d 380 (3d
Cir. 2008); Smithfield Foods v. UFCW, 585 F. Supp. 2d 789, 795-97 (E.D.
Va. 2008) (same).
\6\ See, e.g., Mulhall v. UNITE HERE Local 355, 618 F.3d 1279, 1289
(11th Cir. 2010).
\7\ See, e.g., Price Crusher Food Warehouse, 249 NLRB 433 (1980).
\8\ See, e.g., Adcock v. Freightliner, LLC, 550 F.3d 369, 372 (4th
Cir. 2008); Aguinaga v. UFCW, 993 F.2d 1463, 1471 (10th Cir. 1993);
Kroger Co., 219 NLRB 388 (1975).
\9\ See, e.g., Charles I. Cohen et al., Resisting its Own
ObsolescenceBHow the National Labor Relations Board Is Questioning the
Existing Law of Neutrality Agreements, 20 Notre Dame J.L. Ethics & Pub.
Pol=y 521, 533-34 (2006); Majestic Weaving Co., 147 NLRB 859 (1964),
enforcement denied on other grounds, 355 F.2d 854 (2nd Cir. 1966);
Patterson v. Heartland Indus. Partners, 428 F. Supp. 2d 714, 716 (N.D.
Ohio 2006) (moot on appeal); Dana Corp. (Int'l Union, UAW), 356 NLRB
No. 49 (2010), on appeal, Case No. 11-1256 (6th Cir.); Plastech Eng.
Prod., (Int'l Union, UAW), 2005 WL 4841723, *1-2 (NLRB Div. of Advice
Mem. 2005); Thomas Built Buses (Int'l Union, UAW), No. 11-CA-20038
(NLRB Div. of Advice Mem. 2004) see also Jonathan P. Hiatt & Lee W.
Jackson, Union Survival Strategies for the Twenty-First Century, 12
Lab. Law. 165, 176-77 (``Negotiations over non-Board recognition
procedure often spill over to discussing the terms of a future
collective bargaining agreement.'').
\10\ See Cohen, 20 Notre Dame J.L. Ethics & Pub. Pol'y at 522-23;
A. Eaton & J. Kriesky, Union Organizing Under Neutrality and Card Check
Agreements, 55 Indus. & Lab. Rel. Rev. 42, 47-48 (2001). It is doubtful
whether it is lawful for employers to agree to provide this valuable
organization assistance to unions. Compare Mulhall v. Unite Here, 667
F.3d 1211 (1lth Cir. 2012) with Adcock v. Freightliner, LLC, 550 F.3d
369 (4th Cir. 2008).
\11\ See also 29 U.S.C. Sec. 158(c) (speech cannot constitute an
unfair labor practice absent threat or promise of benefit); Southwire
Co. v. NLRB, 383 F.2d 235, 241 (5th Cir. 1967) (``The guaranty of
freedom of speech and assembly to the employer and to the union goes to
the heart of the contest over whether an employee wishes to join a
union. It is the employee who is to make the choice and a free flow of
information, the good and the bad, informs him as to the choices
available.''); NLRB v. Pratt & Whitney Air Craft Div., 789 F.2d 121,
134 (2d Cir. 1986) (employer speech Aaids the workers by allowing them
to make informed decisions while also permitting them a reasoned
critique of their unions' [email protected]); NLRB v. Lenkurt Elec. Co., 438
F.2d 1102, 1108 (9th Cir. 1971) (``It is highly desirable that the
employees involved in a union campaign should hear all sides of the
question in order that they may exercise the informed and reasoned
choice that is their right'').
\12\ See Cohen, 20 Notre Dame J.L. Ethics & Pub. Pol'y at 522-23;
Eaton & Kriesky, 55 Indus. & Lab. Rel. Rev. at 47-48.
\13\ See, e.g., Dana Corp. (Int'l Union, UAW), 356 NLRB No. 49
(2010), on appeal, Case No. 11-1256 (6th Cir.); Thomas Built Buses
(Int'l Union, UAW), Case No. 11-CA-20038 et seq., at 4-5 (NLRB Div. of
Advice Mem. 17 Dec. 2004).
\14\ See Photo Drive Up, 267 NLRB 329, 364 (1983).
\15\ See Montgomery Ward & Co., 288 NLRB 126, 128 (1988), rev'd on
other grounds, 904 F.2d 1156 (7th Cir. 1990); Levi Strauss & Co., 172
NLRB 732, 733 (1968); see also Mid-East Consolidation Warehouse, 247
NLRB 552, 560 (1980) (falsely informing employees that everyone was
signing union cards did not invalidate card).
\16\ See also Alliance Ware, Inc., 92 NLRB 55 (1950)
(electioneering activities at the polling place); Claussen Baking Co.,
134 NLRB 111 (1961) (same); Bio-Medical of Puerto Rico, 269 NLRB 827
(1984) (electioneering among the lines of employees waiting to vote);
Pepsi-Cola Bottling Co., 291 NLRB 578 (1988) (same).
\17\ Piggly-Wiggly, 168 NLRB 792 (1967).
\18\ See, e.g., Westinghouse Elec. Corp., 227 NLRB 1932 (1977);
General Elec. Co., 180 NLRB 1094 (1970); W. T. Grant Co., 179 NLRB 670
(1969); Arrow Unif., 300 NLRB 246 (1990).
\19\ Specialty Healthcare and Rehabilitation Center of Mobile, 357
NLRB No. 83 (2011).
\20\ Westinghouse, 227 NLRB 1932, illustrates this application of
the merger doctrine. In that case, the Board certified the union as a
representative of employees at one particular plant in North Carolina.
Slightly over one year later, the employees petitioned to decertify the
union. The Board dismissed the petition because the North Carolina
plant had been merged into a single nationwide unit consisting of all
of the employer's plants. Thus, according to the Board, the only way
the North Carolina employees could decertify would be on a nationwide
\21\ See United Parcel Service, 325 NLRB 37 (1997).
appendix of employee tesimony and statements
Congressional Testimony of Mike Ivey (2/8/2007)
Congressional Testimony of Karen Mayhews (2/8/2007)
Statement by Freightliner Employee Katherine Ivey (1/24/2006)
Statement by Freightliner Employee Timothy Cochrane (1/24/2006)
Declaration by Dana Corp Employee Clarice Atherholt (1/13/2004)
Statement by Dana Corp Employee Donna Stinson (5/12/2004)
Statement by Thomas Built Bus Employee Jeff Ward (5/12/2004)
Statement by Collins & Aikman Employee Edna Dawson (5/12/2004)
Declaration by Renaissance Hotel Employee Faith Jetter (11/19/2003)
Declaration by Renaissance Hotel Employee David Harlich (11/19/2003)
Chairman Roe. Thank you, Mr. Messenger.
STATEMENT OF DEVKI K. VIRK, MEMBER,
BREDHOFF & KAISER, P.L.L.C.
Ms. Virk. Chairman Roe, Ranking Member Andrews, and members
of the committee, thank you for inviting me to appear before
The title of this hearing is, ``Examining Proposals to
Strengthen the National Labor Relations Act.'' Unfortunately,
based on my 15 years of experience as a lawyer mainly
representing workers and their representatives, a review of
these legislative initiatives shows that they are anything but.
Indeed, in my view these measures actively undermine the
fundamental structure of federal labor management relations
The central premise of the NLRA is a simple one: that
workplaces better serve all the stakeholders and better serve
our society when employees as well as employers meaningfully
participate in shaping their shared futures. That means, as the
act recognizes, not only that those who create jobs but those
who do those jobs deserve to be heard and deserve the right to
insist that they be heard.
By allowing workers an effective voice in their economic
future, collective bargaining serves as an important
counterweight to ever-increasing wealth concentration and
allows workers, families, and their communities to sustain
economic stability even through difficult times, and to grow
and advance in times of prosperity.
U.S. workers today in virtually every industry face a
challenging economic climate: rising costs, stagnant or
decreasing wages, employment levels that have yet to fully
recover from the 2008 collapse. And employers live and operate
in this same difficult environment.
Successful, mature collective bargaining relationships are
those in which the representatives of both workers and
management recognize that they are both invested in the success
of the enterprise and that their best hope to solve difficult
problems, be they economic or operational, is to make every
effort to do so together. These are relationships in which both
employers and employees recognize the fundamental truth, which
is that they are in it together. Employees depend on the
employer for their jobs; and the employer depends on employees
to get the job done.
Employers and employees in collective bargaining
relationships face challenges together, and in a successful
relationship, one that involves give and take, ones in which
both workers' and employers' views are considered and
respected--they build a record of quietly remarkable
accomplishment. In times of stability and growth employers
invest in their workers' futures and their families. In tough
times workers may forego negotiated economic gains to save
jobs, permit the company to refinance debt, invest in
The shared prosperity and shared sacrifice occurs as
demanded by ebbs and flows in the economy. The most visible
recent example of the latter, of course, is the American auto
industry. But compromises, albeit on a smaller scale, are made
by workers and employers every day to ensure the success of the
operation as well as the success of the people who work there.
In my work I have had the opportunity to meet and advocate
on behalf of people whose lives and those of their families
were changed by the protections they were able to collectively
bargain--scores of people who were unfairly fired, who would
have lost their livelihoods if not for the due process
protection required under their contracts; men and women who
were able rise through the ranks because promotions were made
on neutral, objective criteria rather than on who the hiring
manager personally favored; countless workers who, but for the
leave protections in their contracts, would have been subject
to termination for taking time off to care for sick children,
aging parents, or to address their own health.
The National Labor Relations Act framework is only that--a
framework. It sets out ground rules for workers and employers
to engage on reasonably equal footing. It does not prescribe
outcomes. That is left for the parties in any individual
collective bargaining relationship using creativity,
leadership, and sheer determination in many cases to make
things work. These are all traits, I would argue, that have
historically been among the most valued in our national
Unfortunately, the proposals we are examining today do
nothing to strengthen the NLRA's framework of self-
determination. How can proposals that allow employers to ignore
their workers' wishes to be represented, to destroy their
rights to meaningful recourse and effective enforcement, would
divest the board even of the jurisdiction to enforce the
federal laws that created it be said to strengthen the NLRA?
Only in an Orwellian sense.
That is bad for workers, of course, but the absence of
meaningful workers' voice from the crucial decisions in their
workplaces also means that those voices are largely absent from
the national discourse to shape economic policies that will
affect the future of our country for decades to come. And that
is bad for all of us.
I thank the members for their time, and I welcome the
committee's question and request that my written testimony be
submitted as part of the record.
[The statement of Ms. Virk follows:]
Prepared Statement of Devki K. Virk, Bredhoff & Kaiser, P.L.L.C.
Chairman Roe, Ranking Member Andrews and Members of the Committee,
thank you for your invitation to appear here today. My name is Devki
Virk and I am a Member of the law firm of Bredhoff & Kaiser, P.L.L.C.,
in Washington, D.C. Since joining Bredhoff & Kaiser in 1996, I have
represented labor organizations and workers in the public and private
sector in a wide array of industries, including hospitality,
manufacturing, public safety (fire and police), railway, and
construction. My practice involves both federal and state court civil
and administrative litigation, ranging from complex multi-party cases
to individual employment matters, as well as arbitration. And much of
my work is devoted to providing day-to-day advice regarding the rights
of workers and their unions, and participating in collective bargaining
and contract enforcement. After graduating from the University of
Chicago in 1989, I worked for several years for a Chicago-based non-
profit organization, and then obtained a law degree from the University
of Illinois College of Law in Urbana-Champaign, graduating with honors
in 1995 and serving as a law review editor and a teaching assistant for
first-year contracts and the Uniform Commercial Code (UCC). Following
law school, I clerked for the Honorable Martin L.C. Feldman, U.S.
District Judge for the Eastern District of Louisiana in New Orleans
from 1995-1996 before joining Bredhoff and Kaiser as an associate.
Workers and employers face challenging economic times
U.S. workers today in virtually every industry face a challenging
economic climate: rising costs, stagnant or decreasing wages, and
employment levels that have yet to fully recover from the 2008
collapse. Employers, too, live and operate in this same difficult
environment. And, although the stereotypical construct of labor-
management relations usually involves unions unreasonably insisting on
``more'' without regard to the employer's future financial health, the
Committee should not be surprised to hear that, at least in my
experience, that stereotype--like most stereotypes--has little to do
with the reality of labor-management relations today. Indeed, it is my
experience that successful, mature labor management relationships are
those in which the representatives of both the workers and management
recognize that they are both invested in the success of the enterprise,
and that their best hope to solve a difficult problem, be it economic
or operational, is to make every effort do so together. These are
relationships in which both employers and employees recognize the
fundamental truth, which is that they are in it together: that
employees depend on the employer for their jobs--paychecks to keep body
and soul together or raise a family, and benefits with which a person
can live and retire with dignity--and that the employer depends on the
employees to get the job done.
That is not to say that solving problems is easy, even in an
``adult'' relationship. Far from it: in many instances, these are
discussions that progress inch by painful inch, with stops and starts,
and steps backwards and sideways, both sides pushing not only their
counterparts, but themselves, and holding their breath. Furthermore,
the more difficult the problem, usually the more difficult the range of
solutions: creativity, the ability to maintain an open mind, strong
leadership, and, above all, perseverance, must be present on both sides
to reach a workable agreement. The precise traits necessary to succeed
in this process--innovation, open-mindedness, decisiveness, leadership,
and sheer determination--closely mirror those that, I would argue, have
historically been among the most valued in our national character. This
is the process that I know as collective bargaining.
Employers and employees who face challenges in collective
bargaining face them together and, in a successful relationship--one
that involves give and take, and one in which both workers' and
employers' views are considered and respected--build a record of
quietly remarkable accomplishments. In times of stability and growth,
employers invest in the futures of workers and their families, agreeing
to offer dependent health care and to set aside a portion of
compensation to fund workers' retirement. In tough times, workers may
forego negotiated economic gains, or agree to concessions to save jobs,
to permit the company to refinance debt, to invest in infrastructure.
This shared prosperity--and shared sacrifice--occurs as demanded by the
ebbs and flows of the economy: the most visible recent example of the
latter, of course, is in the American auto industry. But compromises,
albeit on a smaller scale, are made by workers and employers every day
to ensure the success of the operation, as well as that of its people.
In the private sector, it is the framework supplied by the National
Labor Relations Act that--by making employees' collective voice a
right, and not a privilege, and by requiring employers to sit down in
good faith and on reasonably equal footing with the representatives
chosen by their workers--permits this process to succeed. In turn, the
bargaining process expressly ties together the fortunes of workers and
employers, allowing workers the right to negotiate a fair share of the
wealth they help to create, and requiring both employers and workers to
make tough compromises to sustain the long-term growth of the
The role of workers' rights in strengthening the economy
The central premise of the NLRA is that workplaces better serve all
stakeholders when employees, as well as employers, meaningfully
participate in shaping their shared futures. That means, as the Act
recognizes, that not only those who create the jobs, but those who do
them, deserve to be heard, and deserve the right to insist that they be
heard. That premise has largely been borne out over the last 75 years:
studies show that when workers can come together in the workplace and
bargain with their employer, the middle class is stronger, poverty is
lower, racial and gender wage disparities are reduced, and health and
educational outcomes are better.\1\ Workers who have a collective voice
on the job earn more, on average, than those without such a voice, have
more access to health care and are more likely to be able to retire.
Historically, when more workers were in collective bargaining
relationships, our country's middle class was by allowing workers an
effective voice in their economic future, collective bargaining serves
as an important counterweight to ever-increasing wealth concentration,
and allows workers, families, and their communities to sustain economic
stability even through difficult times, and to grow and advance in
times of prosperity. In my work, I have had the opportunity to meet and
advocate on behalf of people whose lives, and those of their families,
were changed by the protections that they were able to collectively
Scores of people who would have lost their livelihoods if
not for the due process required under their contracts. Among them--a
cashier wrongfully fired for a single error after more than twenty
years of faithful service--an error that we were able to prove she did
not even make. Firefighters--who had in fact saved lives, and who time
and again had shown not only their willingness, but their eagerness, to
sacrifice on behalf of others--facing termination based on incorrect
facts and negative publicity. Waiters and waitresses fired based on the
unfounded complaint of a single dissatisfied customer or an anonymous
Dishwashers and housekeepers who were able to see their
lifetime of backbreaking, dirty work pay off as they raised themselves
out of poverty, and even were able to send their children to college;
Men and women who were able to rise through the ranks
because promotions were made based on neutral, objective criteria--
rather than on who the hiring manager personally favored;
Countless workers who, but for the leave protections in
their contracts, would have been subject to termination for taking time
off to care for sick children, aging parents, or to address their own
People who, after a lifetime of working with dangerous
chemicals, were able to preserve their collectively bargained right to
retire with affordable health care.
Unfortunately, I have also encountered people whose attempts to
seek similar protections were repeatedly frustrated, blocked, and,
ultimately, punished; these are people whose lives changed for the
worse when they were unable to obtain timely or effective recourse from
The trials of one group of workers, employed by a hotel here in
Washington, D.C., illustrates just how substantial and real the hurdles
to self-organization can really be. This group, mostly immigrant women
and men who clean rooms, prepare and serve food, and assist guests,
approached the union in May 2003. Housekeepers (the women who clean up
after guests) were alarmed by the mounting workload, which had risen to
thousands of square feet per day. Most of these workers earned between
$9.50 and $10.50 an hour for their labor, and could not afford the
premium payments charged for health insurance. They also could not
afford to stop working, and at least one woman had miscarried on the
job. Restaurant servers, on the other hand, were concerned by their
supervisors' apparent tendency to give busier sections and more hours
to those he favored. These workers were so desperate for better
conditions that even after they were illegally threatened with closure
of the hotel, even after they were granted benefits to dissuade them
from unionizing, and even after one of their leaders, a restaurant
server, was illegally fired, they still voted by a margin of 2-1 to
The employer engaged in extensive pre and post-election litigation,
contesting the composition of the bargaining unit, and filing and
litigating--and losing--objections and unfair labor practices following
the election. At the end of June 2004, almost one year after the
election petition was initially filed, the Board finally certified the
results. Within a few days, the employer announced that it was closing
the restaurant for an indefinite period and laying off all of the
workers (including the brother of the worker who had been illegally
fired). Following the restaurant closure, the employer systematically
ignored the union's requests for basic information about the unit
(names of employees, current wage rates and classifications, current
employee handbook and rules) and its requests to set a meeting date.
Finally, after the union threatened to file charges with the NLRB, the
employer agreed to a single bargaining date. That date was cancelled by
the employer, as were subsequent dates, and the parties did not, in
fact, sit down for the first time until March 30, 2005--nine months
following certification, eighteen months following the election, and
almost two years after the workers first began their organizing effort.
Once dragged to the table, the employer employed a series of
tactics designed to frustrate the process, including refusing to put
proposals in writing, refusing to schedule more than one session at a
time, and delaying or refusing to provide necessary information. But at
the same time as it was impeding workers from obtaining their goals at
the table, the employer was also using a mixture of threats and bribes
in the hotel to undermine collective bargaining, including intimidating
workers, and promising substantial rewards--including a wage increase
of $2.50, a hike of between 15 and 25% for most--if workers signed a
petition disavowing their support for the union. Shortly after the one-
year anniversary of the NLRB certification, the employer advised the
union that it was withdrawing recognition. It then held a meeting in
the hotel and granted the workers the promised wage increase.
Unfair labor practice charges were filed and, following
investigation, the Region not only issued complaint, but advised that
it would take the highly unusual step of seeking injunctive relief in
federal district court, to get the employer promptly back to the table.
Following a trial, the Board prevailed on its motion, and an injunction
indeed issued on June 5, 2006: just about three years after the
election petition was filed. It should surprise no one that, although
the employer indeed finally returned to the bargaining table, the
workers no longer believed that they would ever realize the gains they
had hoped--at least not without risking further firings, intimidation,
and delay. As a consequence, no contract was reached.
I share this experience with the Committee not to provide an
example in which the system failed. To the contrary: the ``system,''
such as it is, worked as well as it could in this case. The Board dealt
with the election litigation as promptly as its caseload permitted.
Charges were filed and investigated, and complaint issued well within
usual administrative processing timelines. And, indeed, this was one of
the rare cases in which the Board authorized, and obtained, injunctive
relief. And, although the employer did file pre and post-election
litigation, it did not, in fact, take advantage of every lawful appeal
or avenue of delay available to it. The process still took three years.
I, for one, cannot blame workers for losing faith in a system under
which, in the best case scenario, they still must wait three years
simply for the employer to be ordered to recognize their chosen
My experiences with workplace problems and solutions, both at and
away from the bargaining table, have convinced me that real
improvements to people's lives, and real economic and social progress,
can be made when workers and their employers come together under the
framework of the NLRA. That is why, as I explain in more detail below,
I am alarmed by several of the measures being proposed which, it
appears to me, attempt to fundamentally alter this framework and, in
doing so, will effectively deprive workers of meaningful opportunities
to participate in shaping not only their own futures, but the economic
future of the country. I am also aware that the limitations of the
current NLRA processes for self-organization are so extreme as to
render it, even when it works as well as it can, practically
ineffective. That is also why I believe that the modest efforts made by
this NLRB to advise workers of their rights under the law and to
streamline the process by which workers may choose a representative are
worthwhile, if small, steps that make it slightly more likely that more
workers who so choose will be able to have meaningful involvement in
the vital decisions that affect not only their workplaces and their
families, but their communities and, ultimately, our economy.
Recent NLRB initiatives to increase the effective enforcement of
As this Committee is aware, the NLRB is the sole forum in which
workers and their representatives may enforce the rights conferred by
the NLRA. It should go without saying that a functional, fully-funded
agency is essential to effective enforcement of these important federal
rights. In addition to working diligently to clear its docket and more
efficiently administer its business, the NLRB recently initiated two
modest steps to increase effective enforcement of the Act's
Last December the NLRB issued a final rule to improve the process
through which workers decide whether to form a union.
The Board's election procedures have been roundly criticized as
antiquated, delay-ridden and easily susceptible to manipulation.\3\
Changes were proposed by the Board in a Notice of Proposed Rule Making
which issued in 2011. The Board held a two-day public comment hearing
last July, and received testimony from numerous witnesses, as well as
tens of thousands of written comments. In late November, the Board
decided to issue a final rule on only certain portions of the proposed
rules and did so on December 22, 2011. A federal district court judge
recently ruled that the statute's quorum requirement was not satisfied
on the day the rule was issued. Chamber of Commerce v. NLRB, Civil No.
11-2262 (D.D.C.) (May 14, 2012) (Boasberg, J.). I understand that the
Board subsequently submitted a motion for rehearing, detailing the
workings of its electronic system of voting and how Board Members are
present in and participate in that process. That motion has not been
decided, but while it remains pending, the rules have not been applied.
That is unfortunate. The new rules are aimed at ensuring that when
workers are seeking an election to decide whether or not to choose a
representative, they will have an election, not an endless series of
litigation. These changes are aimed at creating a uniform, standardized
process for resolving pre- and post-election disputes so that workers
who want a vote get one as promptly as possible. The current system
has, over time, incorporated processes that delay finality of
elections, sometimes for years, and create obstacles for workers who
want to use the process. The new rules minimize opportunities for
delay, and discourage frivolous and duplicative litigation. Further,
the rules modernize the process to reflect changes in the ways in which
people communicate, and also harmonize practices across the Board's
Specifically, the new election rules address the following:
Ensure that administrative hearings are devoted to those
issues relevant to determining an appropriate bargaining unit and other
questions relating to whether an election should be conducted.
Currently, parties can and do raise issues at the hearing which are not
relevant to these issues and which result in unnecessary, expensive and
time-consuming litigation which unduly burdens both this government
agency as well as the parties.
Consistent with many other administrative and judicial
systems, provides the Board with discretion over its review of cases,
including the extent to which briefing is allowed; the current system
increases parties' litigation costs by mandating Board review of all
post-election cases and requiring legal briefing regardless of the
routine nature of the issues involved.
Reduces litigation by consolidating appeals. Current rules
require parties to file two separate appeals to seek Board review of
pre-election issues and issues concerning the conduct of the election.
These two appeal processes are consolidated, which reduces costs to all
and avoids appeals which become moot as a result of the election
Notice Posting Rule
The Board also took an important step towards making its processes
accessible and enhancing enforcement when it issued a requirement that
a notice of employee rights be posted in workplaces covered by the
statute. Enforcement of the Act's protections is dependent on workers
knowing their rights. Yet, to the extent that workers know of the NLRA,
they believe it applies only in already-unionized workplaces.\4\ That,
of course, is not the case. The NLRA applies in every workplace,
unionized or not, and allows workers to engage in such basic activities
as sharing information about their pay, banding together to petition
for a change in policy, or asking for improved safety, and to do so
free of reprisal.
In order to make sure that both workers and employers know the
rights and obligations set forth in the Act, in late 2010, the Board
issued a Notice of Proposed Rule-Making and, on August 30, 2011, a
final rule, requiring NLRA-covered employers to post a Notice of
Employee Rights in the workplace. This Notice is virtually identical to
the notice already required by the Department of Labor for federal
contractors, except that the NLRB Notice adds, in the introductory
sentence describing workers' rights, the right to ``refrain from
engaging in any of the above activity.'' The Notice gives examples of
violations of the law by both employers and unions and lists NLRB
contact information. In does not, in any manner, instruct workers how
to form a union.
Workers cannot be expected to exercise rights that they do not know
about; by the same token, employers cannot be expected to respect such
rights. It is difficult for me to construe legislation that would
forbid the Board from implementing any rule requiring the posting of a
notice of rights as anything other than an attempt to keep workers in
Recent House initiatives that diminish workers' ability to have a
meaningful voice in the workplace
The House has before it a number of initiatives to rework the NLRA
that would further undermine workers' economic rights and, by doing so,
make it less and less likely that the voices of workers will
meaningfully count as we struggle to rebuild our economy and achieve a
sustainable recovery. The following paragraphs address a few of those
Undermining the Right to Bargain Collectively
h.r. 4385, the rewarding achievement and
incentivizing successful employees (``raise'') act
The stated purpose of this bill is to reverse the NLRB's supposed
``ban on individual raises'' by permitting unionized employers to
negotiate and provide wage improvements to individual employees above
and beyond those offered to or negotiated through the union. In my
experience, however, employers who believe strongly in fairly rewarding
productivity or quality, or who wish to offer workers opportunities to
earn beyond their base salary, easily find ways to do so within the
NLRA's collective bargaining framework. Agreements in many industries
contain incentive pay or bonuses, profit-sharing, production bonuses,
additional compensation for work above and beyond the employee's
regular duties, or rewards for innovation or exceptional quality. And
merit increase systems, where increases are based on the employer's
annual reviews or ratings, are not at all uncommon, particularly in
professional or technical occupations. There is no ``ban'' on such
provisions, so long as they are mutually agreed. But that is the key:
mutual agreement by structurally independent, freely chosen
representatives. That principle is, as noted above, the premise on
which the NLRA is built. Both the employer and the workers must agree
that such a provision is in their interest.
This bill would erase the workers' voice from that determination,
and leave such wage increases completely in the hands of employers.
Employers alone would decide who was deserving of extra money and who
was not, and could do so free of any statutory standard (indeed, the
statute does not even require that the raises it permits in fact be
tied to individual achievement or success at all), without any
objective, measurable metrics--and without any review or recourse by
employees who felt that they were unfairly passed over.
One of the most commonly voiced reasons that workers want a binding
contract is to ensure that the rules by which economic benefits and
opportunities are apportioned are clear, objective, and uniformly
applied; that is, to take these critical decisions out of the
employer's sole discretion. This bill permits employers to unilaterally
set the rules and apply them as they see fit--to institutionalize
favoritism and employer discretion--and to do so regardless of the
desires of the workers as a group. If the workers thought the exercise
of such discretion was in their interest, they would agree to it, and
any need for the proposed legislation would disappear. Indeed, it is
only in those circumstances where workers would not agree that the
legislation would have any effect, and would permit the employer to
step in and override their wishes.
This legislation strikes at the core of the NLRA's framework of
self-determination by workers, and active engagement on equal footing
between workers and their employers. If enacted, it would essentially
render collective bargaining on wages meaningless: why bargain
collectively if, in the end, the employer maintains complete discretion
over individual rewards?
Undermining the Right to Self-Organize
Despite its title, H.R. 3094, Workplace Democracy and Fairness Act,
this bill would place further hurdles in the path of workers' right to
self-organize. It would change the NLRB's election process to mandate
that workers wait months and years for a vote by encouraging wasteful
litigation and impose arbitrary waiting periods, even if the parties
involved want to proceed sooner. It would incentivize marathon
litigation by requiring that any and every issues be fully litigated
and resolved before workers can have an opportunity to vote--regardless
of whether the issues are even relevant to the election. Other
provisions in the bill overthrow decades of Board rules that have been
formulated in response to the needs of specific industries and,
instead, applies a limited, inflexible, ``one size fits all'' standard
to determine which groups of workers can be represented together. It
will flood the Board with frivolous appeals, which will require
additional funds and needlessly waste taxpayer monies.
Moreover, the bill would further restrict the already extremely
limited ability of unions to contact workers. In most circumstances
under current law, labor organizations are not allowed in the
workplace--indeed, they are often not even allowed outside the
workplace if that area is private land--and are relegated to contacting
workers during their non-work time and in non-work locations. This bill
would permit a labor organization only a single method by which to
reach each worker (it envisions each worker selecting the method and
disclosing that selection to the employer, to pass on to the NLRB), in
contrast to the addresses that have routinely been required by law
since the 1960s. Of course, all the while, employers have unlimited
access to these same workers during their work-days, can compel their
attendance at meetings to communicate their views, can compel them to
furnish personal contact information, and can use that information to
further communicate their views. These revisions undermine, rather than
H.R. 2810, the Employee Rights Act, among other aspects, sets
minimum (but no maximum) timelines for holding administrative hearings
and elections, and prohibits the Regional Offices as well as the NLRB
from exercising any discretion to move their dockets and streamline
procedures. Further, notwithstanding the wealth of scholarly research
and literature on the abuses of workers' rights by companies during
organizing efforts set forth in the endnotes, this proposal actually
imposes additional penalties only on union misconduct. Even a cursory
review of NLRB data reveals that the vast majority of unfair labor
practice charges involve employer, not union, misconduct;\5\ those
claims also are found sufficient to issue complaint at a far higher
rate.\6\ Of 1,166 formal actions taken by the NLRB in Fiscal Year 2010
(the most recent year for which I was able to find data), 1,028 of
those actions, almost 90%, were taken against employers. Further, the
bill would change the rule that has governed workplace elections for
more than 75 years--a rule that honors the choice of a majority of
voting workers--to require a majority vote of the entire affected
workforce. We do not apply such a rule when we elect our Congressional
representatives; why, then, is it necessary in all of our workplaces,
other than to make workers' selection of a representative even more
difficult a task?
The Secret Ballot Protection Act, H.R. 972, is another measure that
would strip workers of current rights. Since 1935, workers have had the
right to decide whether to form a union through either an NRLB-
conducted election process or to demonstrate their support for a union
through signing cards or a petition authorizing a union to represent
them in collective bargaining. This right has been endorsed by Congress
and by the U.S. Supreme Court. This bill eliminates that right. Even if
a majority of workers tell their employer that they want a union, and
even if the employer wants to accede to their wishes, this bill
nevertheless inflexibly injects a government agency into the process,
expending time and resources, and delaying achievement of the parties'
shared goal. It is difficult to understand the rationale for such a
requirement. Nothing under current NLRA law that I am aware of requires
an employer to recognize a labor organization without an election, even
upon an unquestioned showing of majority support. Those employers who
do agree to recognize without an election therefore do so voluntarily.
This bill seeks, as I understand it, to categorically forbid such
voluntary arrangements, even though the employer thought it a desirable
alternative to the burdensome, expensive, and friction-laden NLRB
The push to eliminate voluntary recognition as an option on grounds
that unions ``coerce'' workers to sign cards is puzzling. According to
the most recent data released by the Board, charges brought against
labor unions account for just over one-quarter of all unfair labor
practice charges filed (6,330, in comparison to over 17,000 charges
brought against employers).\7\ The Board finds merit and issues
complaint in only a very small percentage of all cases filed--about
1,200 in FY 2010 \8\--and, only about 10% of charges brought against
unions on any theory resulted in a complaint, much less a determination
of culpability. The fraction of claims found to have merit is even
lower in the objections setting: only 3 were sustained out of the 92
objections filed in representation cases disposed of in FY 2010.\9\ I
am not aware of research showing that there exists any significant
difference between the rate of coercion claims against unions in
connection with card-signing initiatives as opposed to elections;
certainly, in both situations, the rate of such claims is extremely
small, and the likelihood that they have merit smaller yet.
Weakening Workers' Entitlement to Redress for Wrongful Acts
The House recently passed a proposal that takes broad aim at
workers' rights by further weakening already ineffective remedies. H.R.
2587, titled ``Protecting Jobs from Government Interference,'' would
prohibit the NLRB from ever ordering an employer to reinstate work that
was illegally eliminated--for example, closing and subcontracting of a
department believed to be spearheading an organizing campaign, or
abolishment of an individual workers' job because she exercised her
federally protected right to challenge harsh working conditions. To be
sure, the workers involved might receive some backpay. But the bill
will immunize the employer from undoing its wrongful act,
notwithstanding an adjudication that it violated federal law. For
employees who have illegally lost their jobs, a right without a
reinstatement remedy is hollow indeed. Most workers and their families
rely on each paycheck for housing, food, and other essentials; little
fat is left in most families' budgets these days. Yet, under this law,
even when an employer decimates that family's budget by illegally
outsourcing that worker's job, the employer need only pay what will
amount, in most cases, to a modest fine: an amount equal to the fired
worker's wages for the time period in question, but crediting back to
the employer all of the money actually earned by the worker from other
sources during that period. As most workers who have been fired or laid
off can attest, a check is not a job: it is a band-aid, not a lasting
solution. What rational worker, particularly when, as now, unemployment
is high, would take the already substantial risk of protesting
workplace conditions or lending support to an effort to organize a
union, if he or she knew that no meaningful recourse was available for
Other Impediments to Meaningful Enforcement of Workers'
Several current proposals, such as H.R. 2854, forbid the NLRB from
ever requiring employers to post notices informing employees about
their federal rights under the NLRA. Other proposals are wholesale
efforts to eliminate the NLRB as an enforcement agency. H.R. 2118
appears aimed at divesting the NLRB of the authority to enforce the
Act's protections against contrary state law.
Other proposals either drastically restrict, or eliminate entirely,
the NLRB's ability to enforce the law. H.R. 2978 reduces the agency to
an investigative body, while providing for enforcement of unfair labor
practice provisions of the Act exclusively through private rights of
action. Theoretically, such a revision could provide workers with a
more potent tool with which to enforce their rights; however, given the
substantial expense of federal court actions and the relatively unequal
resources of workers and employers, absent a cost-shifting provision
similar to what is found in other federal workplace laws, that tool
would, unfortunately, remain out of reach for the vast majority of
workers who need it. Written on a broader scale, H.R. 2926 simply
eliminates the Agency.
None of the legislative measures discussed will do anything to
further the central purposes of the NLRA: to grant workers a meaningful
opportunity to join together, if they wish, to better their own lives
and those of their families and communities, and to insist on their
right to be heard in workplace decisions that affect them. Indeed,
taken together, it is difficult to view these measures as anything
other than a broad-based, politicized attack on these purposes.
Furthermore, these measures do not address the economic issues that I
believe are most vital to our country, in both the short and the long
term: the need for good jobs that can sustain generations and anchor
our communities, and the growing concentration of wealth in the hands
of a small proportion of the population. It is my hope that future
hearings will focus on those urgent matters.
\1\ John Schmitt, Unions and Upward Mobility for Latino Workers,
Center for Economic and Policy Research, September 2008; http://
for-latino-workers/; Unions and Upward Mobility for African-American
Workers, Center for Economic and Policy Research, April 2008; http://
www.cepr.net/documents/publications/unions--2008--04.pdf; Unions and
Upward Mobility for Young Workers, October 2008; http://www.cepr.net/
for-young-workers/; Unions and Upward Mobility for Women Workers,
Center for Economic and Policy Research, December 2008; http://
The Union Wage Advantage for Low-Wage Workers, Center for Economic and
Policy Research, May 2008; http://lcc.aflcio.org/WhatsNewDocuments/
EFCA/LowWageWorkers.pdf.; Shawn Fremstad and John Schmitt, Unions
Improve Jobs at the Bottom, November 29, 2007, http://
www.policyinnovations.org/ideas/commentary/data/unionization. Bureau of
Labor Statistics, 2006 Employment Benefits Survey, available at: http:/
\2\ An Analysis of the Distribution of Wealth Across Households,
1989-2010, Linda Levine, Specialist in Labor Economics, Congressional
Research Service, July 17, 2012
\3\ Dropping the Ax: Illegal Firings During Union Election
Campaigns, 1951--2007, John Schmitt and Ben Zipperer, Center for
Economic and Policy Research, March 2009: http://www.cepr.net/
documents/publications/dropping-the-ax-2009-03.pdf; No Holds Barred:
the Intensification of Employer Opposition to Organizing, Kate
Bronfenbrenner, Economic Policy Institute and American Rights at Work
Education Fund, 2009; http://www.epi.org/publications/entry/bp235;
Unfair Advantage: Workers' Freedom of Association in the United States
under International Human Rights Standards, Human Rights Watch, 2000:
Neither Free Nor Fair: The Subversion of Democracy Under National Labor
Relations Board Elections, Gordon Lafer (American Rights at Work, July
neither-free-nor-fair.html; Consultants, Lawyers and the `Union Free'
Movement in the USA Since the 1970s, John Logan, Industrial Relations
Department, London School of Economics, 2002: http://
\4\ See, e.g. Ronald Meisburg and Leslie E. Silverman, Why Should a
Non-Union Company Care About the NLRB?, Society for Human Resource
Management (August 11, 2010); see also Jonathan A. Segal, Labor Pains
for Union Free Employers: Don't be caught unaware of nonunion
employees' labor law rights, HR Magazine, Vol. 49, No. 3 (March 2004)
(``Because these [Section 7] rights are granted under the NLRA--a law
that HR professionals working in nonunion environments may be
relatively unfamiliar with--they may come as a surprise to many
employers that operate without unions.'').
\5\ See Table 1A.--Unfair Labor Practice Cases Received, Closed,
and Pending, Fiscal Year 2010, NLRB, available at: http://www.nlrb.gov/
\6\ Out of a rough total of 17,000 charges filed against employers,
according to Table 1A, 1,028, or 6%, resulted in a formal complaint,
according to Table 3A. In contrast, less than 2% of the 6,300 charges
filed against unions resulted in complaint. Table 3A.--Formal Actions
in Unfair Labor Practice Cases, Fiscal Year 2010, NLRB, available at:
stronger, and wealth distribution less concentrated than it today. As
documented in a recent Congressional Research Service study, the top
10% of the population held about two-thirds of the nation's wealth in
1989.stronger, and wealth distribution less concentrated than it today.
As documented in a recent Congressional Research Service study, the top
10% of the population held about two-thirds of the nation's wealth in
1989.stronger, and wealth distribution less concentrated than it today.
As documented in a recent Congressional Research Service study, the top
10% of the population held about two-thirds of the nation's wealth in
\7\ See Table 1A.--Unfair Labor Practice Cases Received, Closed,
and Pending, Fiscal Year 2010, NLRB, available at: http://www.nlrb.gov/
\8\ See Table 3A.--Formal Actions in Unfair Labor Practice Cases,
Fiscal Year 2010, NLRB, available at: http://www.nlrb.gov/sites/
\9\ Table 11-D., Disposition of Objections in Representation Cases
Closed, Fiscal Year 2010, available at: http://www.nlrb.gov/sites/
Chairman Roe. Thank you.
STATEMENT OF DR. TIM KANE, CHIEF ECONOMIST,
Mr. Kane. Chairman Roe, Ranking Member Andrews, and
distinguished members, thank you for this opportunity to
As an aside, Congressman Kildee, it is a particular honor
to speak before you today. I know my grandfather would be
I will share an analysis I have done of the RAISE Act,
sponsored by Congressman Rokita, of Indiana. The views
expressed in this testimony are mine alone and do not
necessarily represent those of the Hudson Institute.
As the grandson of an elected Democrat, Edward Kane, who
was inspired by FDR to run for office in the city of Wyandotte,
Michigan during the Great Depression, won, and served for
decades in Michigan, I can promise you that I represent a
family that puts the working man first. Also, I am honored to
share my perspective as an economist and an entrepreneur.
I would like to thank all the members here for your
tireless efforts to pull the U.S. economy out of the recession.
The truth is that the policies put in place since 2009 have
been an abject failure in terms of creating a jobs recovery
despite the promises of the Obama administration's leading
Recent calculations I did show that the employment-to-
population ratio collapsed by a staggering 4 percent and has
not recovered at all in the last 3 years. The employment ratio
averaged 63 percent for 2 decades before the current recession,
but it crashed to a modern low level of 58.2 where it has held
steady, representing a permanent loss of 12 million jobs.
On the screens is a chart I recently put together in a
Hudson report. My analysis of this ratio shows a complete
recovery in four of the last five recessions, back to 1970.
There was a 0 percent recovery today. The status quo is a
powerful reminder that policies in place have prevented a
recovery of 12 million jobs.
Turning to workers' rights, what are workers' rights? There
is no economic or logical reason to require workers to
surrender their individual rights when they bargain
collectively or merely consent to a collective agreement. A
collective agreement should be understood to establish minimum
standards for all, not the maximum potential for anyone.
Unfortunately, U.S. labor law now allows collective
bargaining rights to mean the suppression of individual
bargaining rights. Now, as an economist, not a specialist in
labor law, I had no idea that giving higher pay to union
workers is illegal under the National Labor Relations Act.
In 2009, for example, the Brooklyn Hospital Center was
ordered to stop giving $100 gift cards to its top nurses. This
fails the common sense test and the economic test as well.
To predict the economic effects of the RAISE Act the key
variable is what will happen to labor productivity. A 2003
academic study by David Metcalf found that a unionized firm's
labor productivity was 14 percentage points more likely to be
below the union--or pardon me, the industry average.
Now, in theory a unionized workforce will have positive
effects and negative effects on productivity. Metcalf outlines
four negative and five positive channels.
On the negative side, and I am quoting directly, ``First,
unions may be associated with restricting work practices.
Second, industrial action may have an adverse impact. Third,
union firms may invest less than non-union firms. Fourth, if
unions are associated with an adversarial style of industrial
relations the consequent low trust and lack of cooperation
between the parties may lower productivity.''
On the positive side--unions have a positive effect--
``First, firms' responses to union relative wage effects may
result in higher labor productivity, but this should not be
interpreted as raising the welfare of society''--again, quoting
directly. ``Second, unions may play a monitoring role on behalf
of the employer. Third, the familiar collective voice arguments
may have favorable consequences. Fourth, it is sometimes held
that a union presence may make managers less lethargic. And
finally, unions stop the exploitation of labor, resulting in
So which of these wins out? Well, the RAISE Act has
potential to remove some of the negative effects on
productivity, but I don't see how it removes any of the
The most important negative effects this act will remove is
the ban on performance incentives. One study found that 20
percent of workers employed through CBAs, which include 7.6
million private sector union employees, operate under contracts
that allow performance-based pay. This means 80 percent aren't
allowed that pay. I think it is safe to assume a 10 percent
productivity increase across the board for all 7.6 million
union workers affected by the RAISE Act, which would be given
directly--would mostly be given directly to workers in the form
of higher pay.
Other economic effects that the act will make possible
include higher firm revenues. Because the marginal productivity
of labor will increase, affected firms will soon move to hire
more workers in two waves.
Bottom line, I estimate a 200,000 new job estimate because
of the RAISE Act over the next few years. Again, let me
emphasize, the legislation has no potential to hurt jobs or
[The statement of Mr. Kane follows:]
Prepared Statement of Tim Kane, Chief Economist, Hudson Institute
Chairman Roe, Ranking Member Andrews, and Distinguished Members of
the Congress: Thank you for this opportunity to testify today on the
vital issue of worker rights, jobs, and the U.S. economy. I will share
an analysis I have done of the RAISE Act, sponsored by Congressman
Rokita of Indiana, which would allow employers to lift the ``seniority
ceiling'' on workers' wages by allowing employers to pay individual
workers more--but not less--than a Collective Bargaining Agreement
(CBA) specifies. The views expressed in this testimony are mine alone
and do not necessarily represent those of the Hudson Institute.
As the grandson of an elected Democrat, Edward Kane, who was
inspired by President Franklin Delano Roosevelt to run for office in
the city of Wyandotte, Michigan during the Great Depression, won, and
served for decades in Michigan, I can promise you that I represent a
family that has long put the American working man first and foremost.
Also as the son of the president of a small manufacturing company, I
can promise you that I bring the perspective of someone who appreciates
how jobs are truly created. I've spent my career studying the U.S.
economy, but have also founded and run a few software companies, so I
am honored to share my perspective as an economist and entrepreneur.
I'd like to thank all of the Members here for your tireless efforts
to pull the U.S. economy out of the recession. I know you share with me
some frustration that the recession may have technically ended years
ago, but job market remains mired in recession. We need to face the
truth that the policies put in place since 2009 have been an abject
failure in terms creating a recovery in U.S. employment, despite the
promises of the Obama administration's leading economists.
Recent calculations I did show that the employment-to-population
ratio collapsed by a staggering 4 percent during the recession, and it
has not recovered at all in the last three years. Other measures of
labor utilization such as the unemployment rate or payroll jobs created
are not demographically neutral, masking elements such as worker
discouragement and population change. The employment-population ratio
averaged 63 percent for two decades before the current recession, but
crashed to a modern low level of 58.2 percent in late 2009. In the most
recent report from the Labor Department, it remains stuck 58.6 percent,
where it has held steady for two and a half years, representing a
permanent loss of 12 million jobs under this policy regime.
My analysis of employment-to-population shows a complete recovery
after 54 months in 4 of the last 5 recessions going back to 1970. There
was a 50% recovery after 2001 and a zero percent recovery today. The
status quo is a powerful reminder that the policies in place today have
prevented what should be by now a recovery of all 12 million jobs.
If I may turn the clock back in time to 1934 when my Grandfather
ran for tax assessor in Wyandotte, the labor movement then was fighting
to promote workers' rights against the abuses of some corporations. The
abuses were real and the eventual victory of workers' rights
represented what I believe was true progress.
What are workers' rights? Some say that workers have a right to
bargain collectively, and I agree. Some say this is the limit of
workers' rights, and I disagree. There is no economic or logical reason
to require workers to surrender their individual rights when they
bargain collectively, or merely consents to a collective agreement. A
collective agreement should be understood to establish minimum
standards for all, not the maximum potential for everyone.
Unfortunately, U.S. labor law has regressed over the decades such
that the existence of collective bargaining rights now means the
suppression of individual bargaining rights. To be honest, I am an
economist, not a specialist in labor law, so I had no idea that giving
higher pay to union workers is illegal under the National Labor
Relations Act of 1935. The Supreme Court has actually upheld the law in
extreme cases, and the NLRB routinely blocks companies that attempt to
give individual raises. In 2009, for example, the NLRB ordered the
Brooklyn Hospital Center to stop giving $100 gift cards to its top
nurses. This fails the common sense test, and I believe it fails the
economic test as well.
I've conducted an analysis of the RAISE Act on the U.S. economy and
would like to share the results briefly here. The RAISE Act--remarkable
in its brevity--would allow companies with unionized workforces to
offer bonuses and higher wages to some or all its workers than the
current baselines contract. That is the whole matter at hand.
To predict the economic effect of the RAISE Act, the key variable
is what will happen to labor productivity. The economic literature on
unionization and productivity is mixed. A widely respected 1984 book by
Freeman and Medoff (What Do Unions Do?) asserted a positive effect of
unions on productivity in the U.S., but the claim has not held up well
to more sophisticated statistical analysis in more recent studies, and
has not been substantiated by any other broad-based studies. Barry
Hirsch revisited the question in a 2004 paper published by the Journal
of Labor Research and cited numerous other papers, notably Clark (1984)
which find a negative relationship. For example, a 2003 study by
Metcalf found that a unionized firm's labor productivity was 14
percentage points more likely to be below the industry average.
In theory, a unionized workforce will have positive and negative
effects on productivity, which is why disentangling them across
multiple industries and legal-market contexts is muddled. All
economists agree and empirical data show that unions hurt firm
profitability. That effect also is known to limit productivity growth,
if not initial levels, which may be why the private sector industries
with high unionization rates have declined so dramatically since the
1980s. Metcalf outlines four negative channels and five positive
channels. On the negative side:
First, unions may be associated with restrictive work practices.
Second, industrial action may have an adverse impact. Third, union
firms may invest less than non-union firms. Fourth, if unions are
associated with an adversarial style of industrial relations the
consequent low trust and lack of cooperation between the parties may
On the positive side:
First, firms' responses to union relative wage effects may result
in higher labor productivity, but this should not be interpreted as
raising the welfare of society. Second, unions may play a monitoring
role on behalf of the employer. Third, the familiar collective voice
arguments may have favorable consequences. Fourth, it is sometimes held
that a union presence may make managers less lethargic. Finally, unions
should stop exploitation of labor, resulting in improved productivity.
It is important to understand that none of the positive effects of
unionization would be diminished by the Act. Indeed, the worst-case
outcome of passing RAISE is a completely neutral effect on the economy.
However, the Act has potential to remove some of the negative effects
of unions on productivity. The most important negative effect this Act
will remove is the ban on performance incentives. Metcalf discusses
incentives, but I believe this merits consideration as one of the main
productivity inhibitors of unionization. Seniority, rather than work
effort and competence, is the dominant consideration for promotion and
raises under most union rules.
Economic research shows that workers respond to incentives, with
estimates of the increase in worker earnings ranging from 6 to 10
percent when pay is performance-based. The productivity gain is at
least that high, but possibly much higher. We can imagine the effect
will be even larger in firms which have never had merit-based pay. One
study found that only 20 percent of workers employed through CBAs,
which includes 7.6 million private sector union employees, operate
under contracts that allow performance-based pay. That means 80 percent
(6.1 million) of union workers have a wage ceiling enforced by U.S. law
that makes individual performance bonuses and raises illegal, but would
be legal after passage of the RAISE Act. I think it is safe to assume a
10 percent productivity increase across the board for all 7.6 million
union workers affected by the RAISE Act, most which would be given
directly to workers in the form of higher pay. The typical union worker
will get a 5-10 percent raise in take-home pay.
Other economic effects that the Act will make possible include
higher firm revenues. Because the marginal product of labor will
increase, affected firms will soon move to hire more workers in two
waves. The first wave will be to hire workers rather than expand
capital investment because of labor's increased relative productive
impact, but the second wave will be in response to higher profit
potential as the firm expands. A conservative estimate is that each
wave will increase employment by 1-2 percent above current levels, or
roughly 200,000 new jobs over the next few years. Union jobs. The
effects could be much higher. Again, let me emphasize the legislation
has no potential to hurt jobs or wages.
Currently, the National Labor Relations Act allows collective
bargaining agreements (CBAs) that suppress individual bargaining
rights. Specifically, CBAs can set wage floors and wage ceilings,
barring merit-pay, even barring across the board raises by the employer
to all workers. A better approach would not put collective rights at
odds with individual rights, but to allow both to be realized.
The RAISE Act--less than 200 words of legislation--will restore the
upside of individual worker rights and allow firms to give individual
bonuses and raises.
Lifting the pay cap on union workers across America would provide a
much needed boost to our economy. I estimate the RAISE Act will
generate an average raise of 10 percent to union workers in response to
new productivity gains based on new incentives. The follow-on effects
will lead to increased firm revenues and the creation of an additional
200,000 union jobs in the United States.
Clark, K. (1984) `Unionisation and Firm Performance: The Impact on
Profits, Growth and Productivity', American Economic Review,
Vol.74 (5), December, pp.893-919.
Freeman, R. B., and J. L. Medoff (1984): What Do Unions Do? New York:
Hirsch, B. T. (2004): ``What Do Unions Do for Economic Performance?''
Labor Research, 25, 415-456.
Metcalf, D. (2003): ``Unions and Productivity, Financial Performance
Evidence,'' International Handbook of Trade Unions, pp. 118-171.
Sherk, James, and Ryan O'Donnell (2012): ``RAISE Act Lifts Pay Cap on
Millions of American Workers.'' Heritage Foundation. 2702, 1-6.
Chairman Roe. I want to thank all the witnesses for being
under the time--amazing. So thank you all.
I am going to start by just going through three things very
quickly. These are three very simple bills, and I will start
with President Porter.
You know, first of all, I want to--basically to apologize
to the Seneca Nation for the abysmal treatment that the federal
government has done--U.S. government has done--it is
embarrassing--over the 200 years of--it really is. I have
reviewed your nation's history, and I come from an area where
the Cherokee Nation in East Tennessee, and I am not sure what a
sovereign nation is, and does this country keep a treaty.
So I wholeheartedly agree that you have a right on your
nation's land to follow your nation's laws, and we have a
treaty that said you could do that. So I want to----
Mr. Porter. Appreciate that, Mr. Chairman.
Chairman Roe [continuing]. I want to make that statement to
Secondly, I can't think of anything more precious than a
secret ballot. I put a uniform on, left this country, spent 13
months in a foreign nation to help allow people to have that
And I have said many, many times on here, I am a--the son
of a union labor--I grew up in a union household. And I can't
think of anything more important than you as an individual--I
exercised this right a week ago when I went and voted for
myself. Our election is next week and we have early voting. So
no one was behind that booth with me.
I say this, my wife claims she votes for me but I don't
really know. It is a secret ballot. And she says she does,
but--that is the importance of it. No one can intimidate you
when you are back there.
If you want a union that is fine. It is a right in this
country. You can do that.
But it is also your right not to have a union, and you
should be free of any intimidation from an employer or an--the
union to make that decision. A worker should have that right.
And lastly, I am astonished. I didn't know this either,
that as an employer--we--I have a non-union workplace; we have
450 employees in my medical practice, and if I were unionized,
I didn't know either, Dr. Kane, that it was illegal for me to
take a good employee and incentivize them. And there are great
employees in every business, there is no question about it.
As a matter of fact, I would not have had a successful
medical practice for over 30 years without the great people I
worked with. They helped make me what I was. It wasn't me; it
was the people who worked directly with me every day. And I
didn't look at them as working for me, they worked with me
because our purpose was to take care of patients.
So that is the attitude I have about employees, is that
they are the most valuable thing you have. And you reward the
most valuable thing you have and you take care of it. And I
think one of the great rewards you can have is to give that
person a raise and help them during these times.
So just three statements, and one other statement, Dr.
Kane, you made, which I found as the employment-to-population
ratio--that is an amazing statistic. And I guess another way to
put it, I have heard, in 2000--we have 11 million more people
living today than we did in 2000 in this nation but we have
500,000 less people that are employed than we did in 2000. So I
think that says basically a different way the same thing.
President Porter, just your comments on your relationship
with the--with what has happened to you and how this affects
the running of your businesses in your nation.
Mr. Porter. Well, thank you, Mr. Chairman, for the
We have a very strong relationship with our workforce, both
in our government services side and also our revenue side. You
know, the businesses that we operate exist because we don't
have a tax base in our nation.
And so we have been wrestling with this specter that
through this San Manuel decision and the changes in the NLRB
that there will be a union-organizing activity that will occur
in a way that would be inconsistent with the policies and goals
of our government approach. We are a good employer. We provide
good benefits to our workers and we have had a very positive
working relationship during that time.
The interference with our sovereignty is of great concern
in the abstract as well as in what might be the application in
the future, and that is why I am here today and I am glad to
have a chance to testify.
Chairman Roe. Thank you.
And, on the secret ballot, Mr. Messenger?
Mr. Messenger. Yes. The secret ballot is obviously
something that should be protected--the right of each
individual employee to vote in the privacy of the voting booth.
As you said, you know, an individual--there is no one behind
them when they are----
Chairman Roe. Is there any reason not to do it?
Mr. Messenger. Not that I can think of, Mr. Chairman.
Chairman Roe. Okay. Thank you.
And, Dr. Kane, on the RAISE Act, I can't--it is a 200-word
bill. I can't see any reason why you wouldn't take good
employees and give them a raise. I can't imagine why anybody in
the union would mind.
Mr. Kane. Exactly, Congressman. I was--Mr. Chairman--I
tried to analyze this economically and look what the negative
effects on productivity would be. I couldn't see them.
So outside of the productivity conversation I am open to
hearing ideas but, you know, there are these conflicting
pressures on productivity, some positive, some negative. This
bill, it is all positive.
And as you said, it is 200 words. There is no hiding the
ball in there.
Chairman Roe. I thank you.
I yield my time now to Mr. Andrews?
Mr. Andrews. Thank you, Mr. Chairman.
I thank the witnesses for their excellent preparation this
Mr. Messenger, you are in favor of repealing exclusive
representation for unions. Is that correct?
Mr. Messenger. Yes, sir.
Mr. Andrews. And do you think that--is it a fair statement
that you assume that that repeal would help to create more
economic growth and more jobs in the country?
Mr. Messenger. I believe that it would.
Mr. Andrews. Dr. Kane, do you agree with that conclusion?
Do you think that the abolition of the exclusive representation
rights of unions would create more jobs and more economic
Mr. Kane. Abolition of rights--I don't follow, sir.
Mr. Andrews. Well, Mr. Messenger's testimony says that he
thinks that the monopoly representation that is achieved when a
union is recognized should be repealed and that all members of
the bargaining unit should have the right to opt out of that.
Do you think that that would lead to more jobs and more
Mr. Kane. Congressman, the way I looked at it--if I can
limit myself to the RAISE Act, and I don't know if I can----
Mr. Andrews. Well, you could answer my question.
Mr. Kane. Yes, sir.
Mr. Andrews. If you don't have an opinion, tell us. But do
you think it would engender more economic growth, or less, or
Mr. Kane. I don't think it would hurt growth, but I
disagree with the premise, sir, that there is a conflict
between collective rights and individual rights.
Mr. Andrews. You don't think it would hurt growth. Do you
think it would encourage more economic growth?
Essentially, this is what is I guess known in the political
parlance as ``right-to-work.'' So right-to-work laws, do you
think that they encourage or discourage economic growth?
Mr. Kane. I think right-to-work laws encourage economic
Mr. Andrews. Okay.
I want to ask you, do you know--assuming that position,
then, I assume you would think that unemployment rates would be
lower in right-to-work jurisdictions than in non-right-to-work
jurisdictions. Is that right?
Mr. Kane. Depends on too many factors to make a claim like
Mr. Andrews. So you don't think it necessarily will be the
Mr. Kane. I think if I did an econometric analysis I might
be able to isolate an effect that it would be--right-to-work
would have a net positive effect, but I don't think you can do
a simple analysis. California has got a lot of negative weight
Mr. Andrews. Do you know what the median unemployment rate
is in right-to-work states?
Mr. Kane. No, sir.
Mr. Andrews. Do you know how it compares to the median
right-to-work--median unemployment rate in unionized states?
Mr. Kane. No, sir.
Mr. Andrews. Would it surprise you to know that the median
unemployment rate in right-to-work states is 7.8 percent and
the unemployment rate--median rate in the non-right-to-work
states is lower, is 7.5. That contradict your conclusion?
Mr. Kane. Absolutely not. I mean, you can look for a cure
for cancer and say it affects one race of people more than
another race and it is somehow their fault. You have to look at
a lot of factors.
Mr. Andrews. That is true, although I am not sure what the
aberrant factor would be. You are a very skilled economist. You
know what a regression analysis is, right?
Mr. Kane. Sure.
Mr. Andrews. When you look at a correlation coefficient--am
I correct, because I am an amateur at this--assuming that if
the correlation coefficient is one you have a perfect match
between a cause and an effect, basically; and if it is zero you
have no relationship at all.
Mr. Kane. Yes, sir.
Mr. Andrews. I am going to submit for the record this
graph, in which we plotted the unemployment rates in right-to-
work states against the unemployment rates in states that do
not have right-to-work statutes. Could you guess for us what
the correlation coefficient is?
Mr. Kane. Based on where you are leading I can guess.
Mr. Andrews. What do you think it is?
Mr. Kane. Well, this would be what we call--you are leaving
out--you have omitted variable bias when you do a direct chart
like that. You are omitting variables that matter for the
unemployment rate that would then isolate the actual effect. So
I would actually suggest that----
Mr. Andrews. So you must disagree with Mr. Messenger, then,
who said that he thinks that the repeal of exclusive
representation authority of unions would promote economic
growth. You disagree with him?
Mr. Kane. I don't think I disagree with him, but I----
Mr. Andrews. You agree with him?
Mr. Kane. Sorry, sir. I am still----
Mr. Andrews. He says that right-to-work laws encourage more
job growth. Do you agree or disagree?
Mr. Kane. Absolutely, I agree.
Mr. Andrews. So how do you explain a correlation
coefficient of 0.05 when you look at right-to-work--when you
actually look at the percentage of unionized workforce----
Mr. Kane. Yes.
Mr. Andrews [continuing]. And you plot that against the
unemployment rate in the state the correlation is 0.05. How do
you explain that?
Mr. Kane. Well, barring a lecture on econometrics I would
explain it by----
Mr. Andrews. Well, you are barred from giving such----
Mr. Kane. Yes, sir. I would say one, it has omitted
variable bias; two, it depends on the timeframe. So I am
curious what the timeframe of the chart is.
Mr. Andrews. What might some of those variable biases be?
What else would cause--you would admit that at least looking at
these two factors there is no correlation whatsoever between
the percentage of the unionized workforce and the unemployment
Mr. Kane. Well, sir, I would say one of the omitted
variables would be a hurricane. So, for example, New Orleans--
you know, weather--droughts, as you mentioned.
Mr. Andrews. What about the other 49 states that didn't
have a hurricane, or 47 that didn't----
Mr. Kane. Absolutely. So there are so many factors that go
into this that it is hard to say just one thing. You would have
to consider them all and then do a chart based on that.
But also, the timing matters. So is this over the last 10
years, the last 20 years? I could probably get a chart for you
10 years before that one that would show a different
Mr. Andrews. I would love to see that.
Chairman Roe. Thank you.
Mr. Rokita. Thank you, Mr. Chairman.
Real quickly, Dr. Kane, did you want to respond any more to
Mr. Andrews' line of questioning before I went on?
Mr. Kane. No, sir. Thank you.
Mr. Rokita. Okay, thank you.
I want to thank all the witnesses for being here today. I
want to thank the chairman for holding this hearing, as it
regards the RAISE Act. I want to thank my--so many of my
colleagues, including Ms. Noem, Mr. Ross, and the chairman for
co-sponsoring the RAISE Act.
I want to quickly read some excerpts from a letter sent by
a firm called Miller & Long, which is a contracting firm here
in the D.C. area. And Mr. Brett McMahon says, ``Even though we
are not a union company I have met plenty of hardworking union
members. However, their contracts do not permit their employers
to reward their effort. The RAISE Act would allow union
employers to grant individual merit raises to employees covered
by a collective bargaining agreement. I cannot think of
anything more fundamental, logical, or conducive to greater
productivity and job satisfaction than loosening the unfair
constraints on individual achievement. The RAISE Act would
reward hard work. It seems so simple to say that hard work
should be rewarded in this country. It is a sad testimony on
the nature of our politics that such a bill does not enjoy
unanimous support. Every working person deserves a chance to
get ahead and to have their individual effort justly
rewarded.'' Mr. Chairman, I ask for inclusion in the record.
[The information follows:]
July 24, 2012.
Hon. Phil Roe, 419 Cannon House Office Building,
U.S. House of Representatives, Washington, DC 20515.
Dear Representative: I am proud to say that Miller & Long DC is a
merit shop company. Advancement in rank and compensation is earned
through individual effort and hustle. One of my primary tasks is to
continuously evaluate each person. I seek out those that go the extra
mile. It makes us a more productive, positive and profitable place to
work. The younger people entering the business need to know that they
can get ahead, and that their hustle will be rewarded. The more
experienced folks enjoy working with people whose efforts have garnered
I firmly believe that these values are universal. Even though we
are not a union company, I have met plenty of hard-working union
members. However, their contracts do not permit their employers to
reward their effort. Union organizers have targeted Miller and Long in
the past, but our employees have consistently decided that remaining a
merit shot best served their interests. I am concerned that--if a
future organizing campaign succeeded--a union contract would prevent us
from rewarding hustle and hard work. This would undercut our
productivity and would be a serious threat to the health of our
I was disappointed, but not shocked when the union leadership's
political arm decided to oppose the RAISE Act. The RAISE Act would
allow union signatory employers to grant individual merit raises to
employees covered by a collective bargaining agreement. I cannot think
of anything more fundamental, logical, and conducive to greater
productivity and job satisfaction than loosening the unfair constraints
on individual achievement.
The RAISE Act would reward hard work. It seems so simple to say
that hard work should be rewarded in this country. It is a sad
testimony to the nature of our politics that such a bill does not enjoy
unanimous support. Every working person deserves a chance to get ahead
and to have their individual effort justly rewarded.
Brett McMahon, President,
Miller & Long DC, Inc.
Chairman Roe. Without objection, so ordered.
Mr. Rokita. Now, the reason I took some time to state that
is because I am in complete association with the chairman's
remarks when he started the questioning and I can't do any
better by them. But the moral imperative that he laid out here
with regard to these three bills is exactly on point.
Given that then, starting with Dr. Kane, can you give me
specific examples of unions telling a company not to pay
workers more? Because given what I just read that seems like a
Mr. Kane. Yes, sir. I read a few examples. There is a
background paper from the Heritage Foundation--I forget the
publication--by James Sherk that lists a few examples that
One example had a firm that wanted to give everyone in the
company the exact same raise and the union objected to it. It
was taken to the NLRB, and the NLRB, in I think what might have
been a unanimous decision, to Mr. Andrews' point, agreed with
what the law says today that the firm wasn't allowed to make
that raise. So I would probably vote the same way on the NLRB
even though I disagree with the law.
So it is up to Congress to free companies and to free
workers to get these merit raises.
Mr. Rokita. Well, how can an employer provide a
performance-based pay increase? How often are provisions
allowing the performance-based pay increases found in
collective bargaining agreements, and why are they excluded?
Mr. Kane. The analysis I have seen by--in a paper by David
Metcalf in 2003 that 20 percent of CBAs already allow merit
pay, so it is not an extraordinary thing. But the fact that it
is already allowed means it should be logical and that it could
be spread to the other 80 percent of workers under unions
without harming those unions.
In fact, I would predict this would be a shot in the arm
for unions, which have been declining. So if you care about
union health over the future U.S. economy this would be a bill
you would support, as well.
Mr. Rokita. Okay, so just to be clear, union contracts
don't raise wages, or do they, or how often?
Mr. Kane. I don't think you can make a claim one way or the
other. I think the fact that there is a collective bargaining
agreement raises wages across the board, but having the RAISE
Act in place would also allow that collective right to still
exist and individual raises to occur, as well.
Mr. Rokita. And why would businesses pay more if they did
not have to?
Mr. Kane. Well, let's look at the minimum wage. Two percent
of the American workforce gets paid the minimum wage, so it is
this great puzzle: Why do 98 percent of the workers get more
than that when firms don't have to?
As a former employer, I pay people what they are worth,
especially if a worker is extremely talented and gets a job
offer from somewhere else, I want to be able to give them a
raise to retain them. And in fact, we see that happen to
unions, that the--there are losses of talented workers and the
firms and the unions aren't able to retain those individuals.
The RAISE Act would change that.
Mr. Rokita. And what kind of data do you have--and again,
if it was in your testimony, if you can repeat it--do you have
to show how much performance pay raises wages, by percentage
Mr. Kane. That is my analysis. My analysis is the
productivity difference between firms that have incentive pay
and don't, that--what effect it would have where it is barred.
I analyzed 10 percent increase, maybe a 200,000 job increase--
union job increase as a result of the RAISE Act. But that is my
As far as citation about losing workers, I can get that to
you and add it to the testimony.
Mr. Rokita. Okay. And percent pay increase?
Mr. Kane. Well, if we have a 10 percent increase in
marginal productive labor you could say it is half and half--
half goes to the workers, half goes to the firm. But I think
that will filter back into hiring more workers, as well.
Mr. Rokita. Thank you.
Mr. Chairman, my time is expired. Thank you for having the
Chairman Roe. I thank the gentleman for yielding.
Mr. Miller. Thank you, Mr. Chairman.
For the past 75 years, as has been discussed here in this
hearing, the decision was made that the right to form a union
belonged to the workers themselves, and the exercise of these
rights has served, I believe, this country well. I believe that
they contributed to the building of the middle class and to
ensure the prospect that our children can build even a better
life for themselves, and that there--better than their parents.
Certainly I have been dedicated to the idea of
strengthening the National Labor Relations Act to make sure
that, in fact, this decision rested with the workers. And yet,
throughout this entire Congress we have seen the majority here
continue to propose legislation--and throughout the hearings
here--to really take away much of the say the workers have over
We have seen them pass the Outsourcers Bill of Rights,
which eliminated the National Labor Relations Board authority
to order an employer to restore job and production after
employers unlawfully retaliate. You don't get to retaliate for
people exercising their rights under the law, and yet that is
what that legislation would do.
Republicans passed the Election Prevention Act, which
effectively delays and ultimately prevents union elections. How
does that strengthen the National Labor Relations Act? How does
outsourcing jobs strengthen the National Relations Act?
Republicans introduced the Secret Ballot Protection Act,
which eliminates the ability of employers to voluntarily
recognize unions based upon the showing of majority support.
And yet, we see in many instances where in workplaces that is
done the working relationships are better among those
organizations with their employees.
The Republicans--the RAISE Act that is just under
discussion here, which lets employers avoid discussing wage
increases with employees, going around the employer
organization, offering wage increases to selected individuals
to break down the strength of the union under the National
Labor Relations Act. And it doesn't require any wage increases
Ms. Vick--Virk--excuse me, Ms. Virk, in your opinion, you
have listened to this back and forth here, do you believe that
this is strengthening the National Relations Act?
Ms. Virk. No, sir, I do not. In fact, I believe it
fundamentally alters the structure of self-determination that
the--that is the very premise of the act. As you pointed out,
the notion that has been in place for 75 years is that workers
themselves have a right to choose--a federally enforceable
right to choose whether or not they want to deal with their
employers individually or whether they wish to deal with their
employers collectively. And if the workers choose to deal with
their employers collectively the act provides that the
employers must respect that choice so that the workers can
insist that their voices be heard.
Mr. Miller. That is the premise of the law.
Ms. Virk. That is the premise of the law.
Mr. Miller. This decision belongs to the workers.
Ms. Virk. That is exactly right. And legislation such as
the RAISE Act, which was just under discussion, what it does is
effectively take wages, which are obviously a critical
component of any collective bargaining negotiation, and takes
that decision and puts it back exclusively, essentially, in the
hands of the employer.
It destroys or it takes exclusive representation and chips
at it. It goes a ways towards Mr. Messenger's proposal, or what
he would like to see happen, which is the death of exclusive
representation and having everybody atavistically individually
That is not the premise of the National Labor Relations
Act. The premise of the act is that if people want to join
collectively and want to deal with their employer collectively
they have the absolute right to do so.
Mr. Miller. Well, I am just struck by the fact that as we
title this hearing, ``Strengthening the National Labor
Relations Act,'' and as we talk about that throughout the year,
this committee has let go unaddressed probably the most
corrosive scandal in the board's history that has not been
addressed at all by this committee despite repeated requests.
Are you familiar with reports by the board's inspector general
as regarding member Hayes and member Flynn?
Ms. Virk. I am generally familiar with them, yes, sir.
Mr. Miller. So we have two reports of the passage of
confidential deliberative material now from former member
Terence Flynn to select private parties outside the board. You
represent people in these contests all the time. Can you
imagine that you would--it would be appropriate to pass
deliberative, confidential information from the board to the
Ms. Virk. No. I can't see why that would be proper.
Mr. Miller. Do you know what--for what use these documents
were used that they were passed outside of the board?
Ms. Virk. I can't imagine.
Mr. Miller. Mr. Kane, do you know for what purposes these
documents were used that were passed outside the board?
Mr. Kane. I am not familiar with it, sir.
Mr. Miller. Mr. Porter, do you know for what reasons these
documents were used when they were passed outside the board?
Mr. Porter. I am not familiar with the issue.
Mr. Miller. Mr. Messenger, do you know?
Mr. Messenger. No, sir. I do not know.
Mr. Miller. And neither does this committee. And yet, in
fact, the processes of the board were violated by members of
the board, according to the inspector general, and we find no
interest in this committee at all. You talk about undermining
the law is when people start leaking deliberative information
to lawyers and to others outside the board.
We tried to contact--Mr. Andrews tried to contact the
lawyer to get Mr. Chambler here to attend this hearing to
explain this and his lawyer can't find him. Apparently he is
hiding from his attorney. But he said to send the message that
he wasn't turning down the request to appear; he just couldn't
find him. So I guess he is hiding in a culvert somewhere while
his attorney searches for them.
But it is just unbelievable that this committee would
engage in this activity of undermining the board and not deal
with the scandal going on on the--in the board at the same
time. Thank you.
Chairman Roe. Thank the chairman for yielding back.
Mrs. Noem. Thank you, Mr. Chairman, for holding this
hearing today on all these issues regarding the National Labor
Relations Act. While I am supportive of all the bills that are
being heard today, obviously the Tribal Labor Sovereignty Act
highlights an issue that is very dear to me and the tribes in
South Dakota and others across the country.
So I want to thank you, President Porter, for being here
and for your testimony on this legislation. I found it very
insightful, and a hands-on experience is always good insight to
have when we are talking about policy and what happens in real
The NLRB decision from several years ago is an affront to
the principle of tribal sovereignty, which is referenced in the
Constitution. It is especially concerning given the activist
stance that the NLRB has taken. While the Tribal Labor
Sovereignty Act stands to defend the constitutionality
protected principle of tribal sovereignty, I believe it would
also go a long way in continuing to promote economic
opportunities and development on tribal lands by eliminating
ambiguity that exists in current law.
One of the things I hear most from businesses in my state,
tribally owned and others, is the need for certainty from the
government, that they will know what the rules are and what
they will be in the future and can plan accordingly. And I
believe that this is one of the glaring examples of the need
for certainty and agree with you, President Porter, in--that
clarification is needed.
On behalf of the federal government and this hearing, this
is a step in the right direction.
So for you, President Porter, I have a question: You
mentioned in your testimony that the Seneca Nation has strong
employee rights protections in place and procedures as well.
And I think that this gets to the heart of what the Tribal
Sovereignty Act is all about, allowing tribes to govern their
own affairs in accordance with their sovereignty. So could you
talk about how those policies were implemented within your
nation and within your tribal government?
Mr. Porter. Thank you, Congresswoman.
Our nation does have due process and protections for our
workforce in a couple of different ways. Our nation's council,
or legislature, has established laws, you know, that govern the
regulation of workers in the--in our government.
We have created separate governmental bodies that have
administered our workforce in our casinos and other businesses.
They have also their own policies and procedures that have been
adopted by which employees have a definition of their rights
and also a recourse, through grievance procedures, by which
they can be heard in the event of disagreement between them and
their immediate supervisors.
So we do our best. As our businesses have grown they have
grown very rapidly, and my prediction is that over time and in
the years to come they will continue to evolve and advance as
the needs of workers grow and our government continues to
mature in this responsibility.
Mrs. Noem. So what has been the response by tribal members
and employees that have been working for the tribally owned
Mr. Porter. Well, I have learned, you know, in my short
time in elected office that it is difficult to make everyone
happy. But it is true that we have provided, I think, a
mechanism that provides a substantial degree of responsible
employer relations, that, you know, we have a recourse,
disputes are addressed. You know, people go to work every day.
They are happy that they have jobs.
We have created 4,000 jobs in the last 10 years and it has
been a very significant benefit for not just our nation but for
all of the people in Western New York who want to work. And
from that standard I think it is working very well for us.
Mrs. Noem. Is there an opportunity for them to give
feedback to you into those policies and procedures so that you
can work to put changes in place that they would recommend as
Mr. Porter. Absolutely. You know, I receive a lot of just
unsolicited requests from members of our own nation as well as
some of our employees about different problems that they have.
I always try to work within the chain of command in terms of,
you know, taking it back to the executives or the directors who
are responsible for the workforce.
But we do find a way in our small society of decision-
makers to be able to address concerns that our people as well
as our workers are raising.
Mrs. Noem. Have you found it--you know, that ability to
dynamically react and meet the needs of the employees has been
of benefit to you in setting up some of these policies and----
Mr. Porter. Absolutely. We have fantastic businesses. Our
gaming business does well. The private sector businesses--the
individually owned businesses are struggling to continue to
improve, and people have choices, you know, when it comes to
where they want to work within our nation government
businesses, the private sector, or even off the territory.
So I think it is working as best as it can. After most of
the last 200 years of our people living in abject poverty we
have done an awful lot over the last 40 years and I hope to
continue that growth in the future.
Mrs. Noem. Great. I just was curious, what--do you know
what the standard was that was used by the NLRB to determine
whether it had jurisdiction over a tribal enterprise before San
Mr. Porter. As to why they continue to recognize our
Mrs. Noem. What the standard was before that decision----
Mr. Porter. I think it was common sense, quite honestly,
because we are governments, and no differently than the statute
reads that the United States or state governments are exempted
from the coverage of the law, I think it was a common sense
understanding that tribal governments would also be exempted.
And I think it is only because we decided to grow businesses
and generate monies for our people that the board, frankly,
without almost no principle, changed the standard.
Mrs. Noem. Well, thank you. Thank you for being here.
Chairman Roe. Dr. Holt?
Mr. Holt. I thank the chair.
I would point to the statements of Mr. Miller and Mr.
Andrews at the beginning of this hearing that there are things
that we should be dealing with today, whether it is leaks that
completely undermine the ability of the NLRB to function, or
whether it is ways to have more workers employed. And I think
Mr. Andrews at least laid the groundwork for the case that
moving to right-to-work is not going to result in more workers
being employed; and I think Mr. Miller made the case that if we
are going to have a functioning NLRB we have to exert some
Ms. Vick--Virk, I beg your pardon--first one specific
question that I would like to clear up: It has been repeatedly
stated that it is now illegal for a unionized employer to give
bonuses to their employees. Is that true?
Ms. Virk. I thank you for the opportunity to speak on that
question. No, it is not true. It is only unlawful if the
employer does not deal with the representative chosen by the
workers if the workers have chosen a representative. Is----
Mr. Holt. Thank you.
Well, now I wanted to talk a little more generally, Ms.
Virk, about why we are even talking about a representation for
a group of workers collectively. Without the body of law and
precedent associated with the NLRB, that whole body, do you
think workers have equal footing with employers when it comes
to wages and working conditions, benefits and the other matters
Ms. Virk. Do you mean, are workers--do they exercise the
same level of bargaining power----
Mr. Holt. I guess I am asking, why was the National Labor
Relations Act and associate--and associated law passed in the
first place? Historically, are workers on an equal footing with
Ms. Virk. No, they are not. And that is the reason that
Congress gave them an enforceable right to act collectively if
they so chose.
Mr. Holt. So in this legislation that the majority has laid
out today for our consideration, the legislation that would
eliminate the NLRB's authority to order an employer to restore
jobs as part of a--if an employer unlawfully retaliates against
employees, or legislation that would delay union elections, or
what is called the Secret Ballot Protection Act, or the so-
called RAISE Act that we were talking about that would allow an
employer to set wages outside of the collective bargaining
agreement, or legislation that would restrain the enforcement
of any state law on grounds that it is preempted by or
conflicts with the National Labor Relations Act--in other
words, a state could pass laws in direct conflict to federal
labor law--do you see, in any or all of these bills, any anti-
union bias or pro-union bias? In other words, is this really
about making the NLRB more efficient, more functional, or is it
really to get at whether unions can operate in the interest of
Ms. Virk. I guess the way that I would see it, Congressman,
is that these measures taken individually or collectively
undermine workers' rights, and in doing so they undermine the
rights of workers' chosen representatives, which in many cases
where workers have chosen collective representation are labor
unions. But what they really do is chip away at individuals'
rights or allow employers to ignore individuals' own wishes to
be represented collectively, or their own wishes at the
bargaining table, or their own wishes as to whether to be
represented at all.
Mr. Holt. So let's take, for example, the Secret Ballot
Protection Act. How does that reduce workers' rights?
Ms. Virk. Well, voluntary recognition, which this act would
eliminate, has been in place and has been a part--a historical
part of the National Labor Relations Act since its inception in
1935. Thousands and thousands and thousands of workers have
freely and easily chosen to be represented by an agent
collectively for the purpose of bargaining with their employer
and have done so simply by signing a card or signing a petition
that have been presented to their employer, and their employers
have agreed to respect their workers' wishes without an
The act permits secret ballot elections and many thousands
of employees have also been organized, if they so choose, by
secret ballot election.
What the Secret Ballot Protection Act, as I understand it,
would do is take away that first option of voluntary
recognition--take away the option of employees to simply come
together and say, a majority of them, ``We want a union,'' and
present a petition or cards to their employer saying exactly
that and allow the employer the right to respect that. That is
what it would take away.
Mr. Holt. Thank you.
Chairman Roe. Thank you.
Mr. Tierney. Thank you.
You know, I took your point, Ms. Virk, on the notion that
most of these statutes that are being proposed seem to be more
about taking away the strength of the National Labor Relations
Act than increasing it, but one--aside from one of the statutes
here, one that always got me was the provision--the ruling of
the board that there would be a notice posted which would
inform members of unions of their right to join or to refrain
from joining a union. And my understanding is that that notice
could be downloaded for free of charge off the Labor Relations
Board's site and then need only to be posted the same place
that all other work notices are posted.
Can you explain to me what the problem with that seems to
be, for people that object to that?
Ms. Virk. I don't understand why anyone would take a
position that people should remain ignorant of rights that
they--clearly are enshrined in federal law. And I would say,
member Tierney, that in fact, the notice posting is required in
all workplaces, union and non-union, to inform non-union people
of their rights.
And in fact, you know, given that most non-union workers
don't even know that they have the right to act collectively,
don't even know that they have a right to discuss wages or
working conditions or complain about those conditions to each
other or to their employer to try to seek redress, seems to me
that informing those non-union workers, which are an ever-
growing percentage of our workforce, of their rights, I really
see no reason not to do that.
Mr. Tierney. Well, part of the charge of the National Labor
Relations Board, of course, is to enforce its own statutes,
rules, and regulations. Is that correct?
Ms. Virk. That is correct.
Mr. Tierney. And how would a--how would not posting this or
not giving people information about their own rights strengthen
the board's position or ability to do that?
Ms. Virk. I don't see how it could strengthen it at all. I
could only see that it would further undermine people's
knowledge and, therefore, their enforcement of those rights
that they absolutely have.
Mr. Tierney. With respect to the so-called RAISE Act, my
understanding under current law--and correct me; you are the
expert here--under current law collective bargaining agreements
already provide for merit pay raises if people--increases if
people want to do that?
Ms. Virk. If the parties mutually agree to it. And member
Tierney, I mean, member Rokita said--asked of witness Kane how
often are these arrangements of merit pay allowed, and I think
the real answer to that is--Mr. Kane said 20 percent of
agreements. I don't know whether that is right or not.
But the real answer is, as often as both parties agree to
that. And that is the beauty of the act is that it sets up a
process and then the parties who are involved in--the
bargaining parties themselves select what provisions work for
them under their particular circumstances. It is as often as
those parties decide there should be.
Mr. Tierney. Can you explore a little bit broadly for us,
how does changing that and passing the RAISE Act, how would
that undermine the purpose of the statute?
Ms. Virk. As I understand it, it would, as I said before,
take away the union's right or labor organization's right to
exclusively represent workers with regard to wages. Wages are a
critical--perhaps the most or one of the most critical economic
components in any package, and it would allow the employers to
agree with the workers' chosen representative to one thing and
then go, without consulting with the union, behind the backs of
workers' chosen representative to decide in their discretion
who was deserving of additional money and who was not.
And if a majority of the workers in that workplace don't
believe that employers' discretion to decide who is deserving
and who is not is in their interest, that wish should be
respected. And that is what the RAISE Act undermines.
Mr. Tierney. Well, currently under the existing law, if a
state were to pass any legislation that conflicted with or
undermined or preempted federal law under the National Labor
Relations Act does the board have the authority to take any
Ms. Virk. It is my understanding that the general council
has the authority to sue in federal court.
Mr. Tierney. And that strengthens their position of being
able to enforce their own rules and regulations in the National
Labor Relations Act, is that the theory here?
Ms. Virk. Certainly. And strengthens the national labor
policy of uniform federal labor law.
Mr. Tierney. So could you explain to me how passage of H.R.
2118 would--which would strain them from taking such action,
would say that they cannot go in and challenge a state who does
that, how does that somehow strengthen the National Labor
Ms. Virk. As I said, really only in an--the Orwellian
sense, in that it does the opposite.
Mr. Tierney. Seems there is a lot of that going around here
Thank you. I yield back.
Chairman Roe. Mr. Kildee?
Mr. Kildee. Thank you, Mr. Chairman.
First of all, Tim, it is good to see you again. You come
from a great family. I have great memories of your grandfather.
Mr. Kane. Thank you, sir.
Mr. Kildee. We may not agree on these issues, but I
certainly respect you personally.
Mr. Virk, how have the recently enacted rules of the NLRB
improved the efficiency of union elections and reduced delays?
Ms. Virk. As I understand those rules, sir, they have been
enacted but not enforced. They would do two main things.
They would streamline the pre-election and post-election
hearing processes, which currently can be, even in the best
case scenario, very long, drawn-out affairs in which an
employer pre-hearing, pre-election, after a majority of
employees have decided that they want a representative or
decided that they want an election, an employer can stall that
process for weeks and even months on end, raising any number of
issues that are irrelevant to the--that might be irrelevant to
the ultimate outcome of the election.
What the new rules do--and they can do the same thing post-
election. After an election is held an employer has a right--a
union has a right, as well--to file objections as to the
conduct of the election and another hearing process is held.
Both of those outcomes of those processes can be separately
appealed to the labor board. They are held in front of an
administrative law judge and the outcomes can be appealed to
the labor board, which again adds additional delay both on the
front end and on the back end.
You know, the example that is in my written testimony is
actually sadly an example in which the board did every single
thing they could and the union, which was voted in by a two-to-
one margin by the employees, did not actually receive
certification until almost a year after the election petition
was filed. The new rules that the board wanted to promulgate
would streamline that so they would consolidate appeals and
have certain timelines that would have to be met, and also
limit the kinds of issues that could be raised pre-election so
that the purpose is that the employees want an election, they
get an election and they get an election promptly, again,
trying to respect the wishes of the workers whose rights are
protected by the NLRA.
The second thing that they would do is, as I understand it,
under current law the employer is required to provide names and
addresses of employees only. Most people these days communicate
most often by phone or by e-mail, and under the board's rule
there would be additional information provided to the--to a
labor organization about how to communicate with the individual
employees within the bargaining unit. Mind you, the employer,
of course, has access to all of that information as well as
access to each and every member of the bargaining unit every
day, day in and day out, because they work there and the
employer controls their time when they work.
All the new rules would do would be to give a labor union
who sought to organize that workforce an additional method of
communication--essentially, to modernize the methods of
communication. That is my understanding as to the two major
parts of that rule.
Mr. Kildee. Thank you.
I yield the balance of my time to the gentleman from New
Mr. Andrews. I thank my friend for yielding.
I want to ask Mr. Messenger a question: My understanding of
the present law is that if a majority of workers in a
bargaining unit sign a card or petition to say they don't want
the union anymore and the employer then unilaterally says,
okay, I am going to stop collectively bargaining, that the law
doesn't require a secret ballot to decertify the union, does
Mr. Messenger. It does not. However----
Mr. Andrews. I mean, you spoke movingly about your devotion
to secret ballot. Would you have a secret ballot in that
Mr. Messenger. Yes.
Mr. Andrews. You would?
Mr. Messenger. Yes.
Mr. Andrews. Is that in the bill that is before the
committee, or does that omitted--is that change omitted?
Mr. Messenger. I don't know off the top of my head. I would
have to look----
Mr. Andrews. My reading of the bill is that it does not
create that situation. So would it be your recommendation that
if the bill before the committee does not require a secret
ballot to decertify the union that be added?
Mr. Messenger. Yes. However----
Mr. Andrews. Thank you.
I yield back.
Chairman Roe. Mr. Kucinich?
Mr. Kucinich. Thank you very much, Mr. Chairman.
Question for Ms. Virk: In Mr. Kane's testimony he argues
that current labor law suppresses individual bargaining rights.
Can you tell this committee or subcommittee, how have
collective bargaining rights affected the living standards of
the middle class since the enactment of the National Labor
Ms. Virk. I am not an economist like Mr. Kane, but my
understanding is that historical trends show quite clearly than
when workers choose to join together in any given workplace or
industry they better themselves. When there are profits to
distribute workers get a share of that; when there is income to
the farm workers get a share of that if they bargain
collectively. And they are much more likely--and more workers
as a group are more likely to get more when they bargain
And that is, I think, has been, historically, since 1935
when the Labor Act was passed in the depths of the Depression,
it was viewed as an engine to stimulate wage growth, to
stimulate and increase economic stability within communities--
Mr. Kucinich. Well, wait a minute. You know, you say
stimulate wage growth. You are speaking not only the organized
workforce but the part of the workforce that is not organized,
their wages go up as well because there is such a thing as
patterns that are set in organized labor----
Ms. Virk. That is exactly correct, Mr. Kucinich. There is
essentially a halo effect. Miller & Long, the employer whose
letter member Rokita put into the record, compete regularly in
the Washington, D.C. area with construction employers who are
unionized, and one of the reasons, perhaps, that they pay good
wages is because the unionized construction industry in
Washington, D.C. pays good wages.
And it is a rising tide when there is an industry that has
significant unionization, and it is a rising tide that lifts
all the boats in that industry.
Mr. Kucinich. So as someone who is involved in negotiating
collective bargaining agreements, the people who you work on
behalf of, as their counselor explain to us what they tell you
why it is important to them.
Ms. Virk. Why it is important to them to have that----
Mr. Kucinich. Yes. To have that right.
Ms. Virk. I think for two reasons, fundamentally. First,
they believe that they--if they band together that they will be
able to share when an employer prospers, and that they will--
secondly, I think, that they will have a meaningful voice in
workplace decisions other than economic decisions that affect
them in their everyday working life. Respect and dignity on the
job are two things that I think most lawyers who represent
labor organizations and workers hear as one of the main reasons
that people want to unionize.
Mr. Kucinich. Thank you, Ms. Virk.
Mr. Chairman and members of the committee, we are looking
at a particular right here that workers have, the right to
collective bargaining, but really it is part of a penumbra of
rights: the right to organize, the right to collective
bargaining, the right to strike, the right to decent wages and
benefits, the right to a safe workplace, the right to a secure
retirement. These are part and parcel of rights that workers in
a democratic society have.
And so what we are speaking about here is not simply the
economics that may become involved. There is a very powerful
social and even moral statement here that has to do with the
rights of workers. And there is a moral tradition that is
connected with the annunciation of those rights.
I thank the chair.
Chairman Roe. Thank you for yielding.
I will now yield time to Mr. Andrews for his closing
Mr. Andrews. Well, thank you, Mr. Chairman. I, again, would
like to thank you for conducting the hearing and the ladies and
gentlemen for their preparation this morning.
I think what the American people want us to do is to work
together to create the conditions where jobs can be created by
entrepreneurs and employers in the country. That is their
agenda. And I think that the litmus test we have to run
anything we do here through is that.
And although the legislative proposals made are certainly
important and made in good faith, I think they fail that litmus
test of really addressing the problem of jobs in the country.
As I said earlier, there are many other things that the
Congress could be doing that we are ignoring, and frankly, the
evidence--the record here is devoid of any evidence that the
enactment of these bills would engender economic growth; I
think some of the evidence points in the other direction, that
the less collective bargaining you have the higher unemployment
can be. At best it is controversial, but there is certainly no
record that would show that an assault on collective bargaining
would grow jobs.
The particular points being made here I think are lacking,
that we have heard that employers who have a collective
bargaining agreement can't give merit pay, that is just not
true. What is true is if the collective bargaining agreement
allows for a merit pay system you have one; if it isn't, you
don't. And if the workers want to decertify the union they can.
We have heard about the sanctity of the secret ballot.
Well, the truth of the matter is that under the present law the
employees can always choose to have a secret ballot under
present law, should they choose to in the way of choosing
whether they want a union or not, with one exception, which is
if the employer unilaterally withdraws from collective
bargaining because there has been a petition signed by a
majority of the workers, then there is no secret ballot.
Now, I think to Mr. Messenger's credit, he is consistent
and he agrees that that is an inadequacy in the law. But the
bill before the committee doesn't fix that inadequacy; it goes
after the other ones.
So I certainly think these are important topics that are
offered in good faith but they are the wrong agenda for the
country right now. I think the agenda for the country right now
should be tax cuts for small businesses that create jobs. It
should be the ways to get police officers, firefighters,
teachers back to work. It should be to deal with the terrible
drought conditions in rural America that are destroying the
agricultural economy. That is what we should be working on.
And I know some of those things are outside of our
jurisdiction but they are not outside of our responsibility.
That is what I think we should be doing here today, but I do
very much appreciate the witnesses' participation, and you, Mr.
Chairman Roe. I thank the gentleman for yielding.
And I also want to thank this very succinct group of
witnesses. You got to the point quickly and made your points
well and I appreciate that.
I agree with my friend, Mr. Andrews, about the need in this
country to create jobs, and I think one of the things that I go
back to is my position as a small business person and as a
local mayor. The way I ended up helping create jobs was--how
the government did where I was--was created an environment
where businesses could succeed, and that is by lowering
regulations and making it easier to operate your business.
And I would give you an example: In our small community of
60,000-plus people, for the 3 years prior to coming to
Congress, in 2005 to 2008, we issued $200 million in building
permits in a city of 60,000 people. That is pretty good. And
guess what I knew by doing that? By having those businesses
grow--we are not an income tax state in Tennessee--that
allowed, I knew down the line those property taxes were going
to be paid and those sales taxes were going to be paid. And
with that money I didn't have to borrow money; I could go have
that money to pay teachers and firefighters. Not borrow money
and hire them, but to do it in that way.
To show you how fiscal management works, we increased our
fund balance in our local community from 2003 to $2 million to
$24 million without raising taxes. We cut the size of
And guess what happened? In 2008 in little Johnson City,
Tennessee, when everybody else was going off a fiscal cliff our
bond rating went up, and it went up because we had money in the
bank. So that is how you run, by limited government making
business--a business-friendly environment and allowing that to
And I had to chuckle. Mr. Andrews made my palms sweaty back
to my statistics class when he talked about the correlation
coefficient. My heart rate went up.
But I do believe in America they don't know what that is,
and I think what they want is a job with a higher paycheck. I
think in very simple terms that is what we want.
And in 1935 a very basic flaw in workers' rights was
recognized and a good law was passed, the NLRA. But there needs
to be some improvement to that NLRA, I think, and I know that
for myself this, I believe--I agree with Chairman Miller when
he said he wanted to strengthen worker rights, and that is what
I think we are trying to do, first by allowing a good worker to
be--and Ms. Virk is correct, you can do that now, but there are
also good workers--I have had them work for me, and I can tell
you, one of the worst days of your life as a physician is when
your nurse leaves. I mean, that is a bad day because you have
got to hire someone else who doesn't know what they are doing.
So you want to keep good employees and you want to allow--you
should have the right to--if you have a sterling employee
outside that agreement--to do that.
Number two, I think, I am so passionate about someone's
right to a secret ballot, and I wholeheartedly agree with Mr.
Andrews, and I certainly would be open to having the secret
ballot for decertification, and if we include that I would love
to have him on the bill, since it was your suggestion, so I
would be glad to do that.
And lastly, I think it--and to President Porter, I think it
is a requirement that we keep our word. And I appreciate what
you are doing for one of the most disadvantages of--
disadvantaged populations in our country, that is our Native
Americans. It is shameful.
My father could not stand one of the Tennessee presidents,
Andrew Jackson, because of his treatment of the Cherokee
Nation. And I think what we need to have the federal government
in your case is to--excuse my French, but to butt out and to
allow you to carry on your own business.
And I appreciate your all being here, and I want to close
by what I think is an Indian, maybe a Seneca saying, and it is,
``When you were born you cried and the world rejoiced. Live
your life so that when you die the world cries and you
And with that, our meeting is adjourned.
[Additional submission of Mr. Andrews follows:]
[Additional submissions of Mr. Miller follow:]
Washington, DC, May 11, 2012.
Hon. John Kline, Chairman,
Committee on Education and the Workforce, 2181 Rayburn House Office
Building, Washington, DC 20515.
Dear Chairman Kline: To date, the Committee Majority has requested
thousands of documents from the National Labor Relations Board (``the
Board'') and held six legislative and oversight hearings related to the
Board and the National Labor Relations Act. The Majority has also
stated in its Budget Views and Estimates for FY 2013 that ``[t]he
committee will remain vigilant in oversight of the NLRB * * *'' Such
vigilance is particularly needed now as we confront the most corrosive
scandal in the Board's history.
As you know, the Board's Inspector General has issued three
investigative reports so far this year that raise serious questions
about the conduct of current and former Members of the Board.\1\ The
most recent reports on Member Terence Flynn detail extensive disclosure
of internal, deliberative information by Mr. Flynn to select private
parties for their private benefit. Such behavior threatens the Board's
integrity and strikes at the very heart of its ability to effectively
and efficiently function as an adjudicatory and rulemaking body bound
by principles of due process and fair play. The Inspector General has
called these matters ``a serious threat to the Board's decisional due
process.'' \2\ After concluding that Member Flynn released deliberative
nonpublic information, the Inspector General in his most recent report
\1\ See, Memorandum, Report of Investigation-OIG-I-467 from Board
Inspector General David Berry to Board Chairman Mark Pearce and Board
Member Brian Hayes (January 23, 2012). See also, Memorandum, Report of
Investigation-OIG-I-468 from Board Inspector General David Berry (March
19, 2012) and Memorandum, Supplemental Report of Investigation-OIG-I-
468 from Board Inspector General David Berry to the Board (April 30,
\2\ Supplemental Report of Investigation-OIG-I-468 at 13.
Members of administrative bodies such as the Board cannot freely
discuss decisions and points of law and fact if they are fearful that
the positions that they take during deliberative discussions or in
drafts of documents are going to be made public, distributed to
pundits, or leaked to parties.\3\
\3\ Id. At 10 and 11
These reports cannot be ignored by our Committee. We respectfully
request that you convene a full Committee hearing post haste with the
Inspector General to provide all of our members the opportunity to ask
questions and explore in depth the findings and potential consequences
of his investigative reports.
A hearing with the Inspector General is only a preliminary step in
our efforts to fully investigate these matters. We have begun the
process of seeking the voluntary cooperation of a number of principals
to provide the Committee with information on their involvement.
Evidence from all three investigative reports has been shared with
the Department of Justice. While the Department of Justice is
responsible for investigating whether any of the subjects in the
Inspector General's investigative reports committed crimes, we are
responsible for directly overseeing the effective and efficient
performance of the Board. According to the Inspector General's latest
report, such performance is in peril. With the Board's ability to
properly function at stake, it is incumbent upon us to fully engage as
the oversight committee.
Thank you for your consideration of this request.
George Miller, Senior Democratic Member,
Committee on Education and the Workforce;
Robert E. Andrews, Ranking Member,
Subcommittee on Health, Employment, Labor and Pensions.
[Whereupon, at 11:25 a.m., the subcommittee was adjourned.]