[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]
CORPORATE CAMPAIGNS AND THE NLRB: THE IMPACT OF UNION PRESSURE ON JOB
CREATION
=======================================================================
HEARING
before the
SUBCOMMITTEE ON HEALTH,
EMPLOYMENT, LABOR AND PENSIONS
COMMITTEE ON EDUCATION
AND THE WORKFORCE
U.S. House of Representatives
ONE HUNDRED TWELFTH CONGRESS
FIRST SESSION
__________
HEARING HELD IN WASHINGTON, DC, MAY 26, 2011
__________
Serial No. 112-24
__________
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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 Donald M. Payne, New Jersey
Todd Russell Platts, Pennsylvania Robert E. Andrews, New Jersey
Joe Wilson, South Carolina Robert C. ``Bobby'' Scott,
Virginia Foxx, North Carolina Virginia
Bob Goodlatte, Virginia Lynn C. Woolsey, California
Duncan Hunter, California Ruben Hinojosa, Texas
David P. Roe, Tennessee Carolyn McCarthy, New York
Glenn Thompson, Pennsylvania John F. Tierney, Massachusetts
Tim Walberg, Michigan Dennis J. Kucinich, Ohio
Scott DesJarlais, Tennessee David Wu, Oregon
Richard L. Hanna, New York Rush D. Holt, New Jersey
Todd Rokita, Indiana Susan A. Davis, California
Larry Bucshon, Indiana Raul M. Grijalva, Arizona
Trey Gowdy, South Carolina Timothy H. Bishop, New York
Lou Barletta, Pennsylvania David Loebsack, Iowa
Kristi L. Noem, South Dakota Mazie K. Hirono, Hawaii
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 Minority 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 David Wu, Oregon
Martha Roby, Alabama Rush D. Holt, New Jersey
Joseph J. Heck, Nevada Robert C. ``Bobby'' Scott,
Dennis A. Ross, Florida Virginia
C O N T E N T S
----------
Page
Hearing held on May 26, 2011..................................... 1
Statement of Members:
Andrews, Hon. Robert E., ranking minority member,
Subcommittee on Health, Employment, Labor and Pensions..... 4
Roe, Hon. David P., Chairman, Subcommittee on Health,
Employment, Labor and Pensions............................. 1
Prepared statement of.................................... 3
Wilson, Hon. Joe, a Representative in Congress from the State
of South Carolina, prepared statement of................... 6
Statement of Witnesses:
Bego, David A., president and CEO, Executive Management
Services, Inc.............................................. 7
Prepared statement of.................................... 9
Fisk, Catherine L., chancellor's professor of law, University
of California, Irvine...................................... 36
Prepared statement of.................................... 38
Fritts, Jonathan C., partner, Morgan, Lewis & Bockius LLP.... 45
Prepared statement of.................................... 47
Karnas, F. Chet, president and owner, Lone Sun Builders,
Inc., on behalf of Associated Builders and Contractors..... 26
Prepared statement of.................................... 28
Additional Submissions:
Mr. Andrews:
Cincinnati Post article, ``Justice for Janitors,'' July
31, 2007............................................... 86
Indianapolis Star article, ``Pay and Hours Improve for
Indianapolis Janitors,'' April 20, 2008................ 87
Indianapolis Clergy Committee, statement of principles... 87
Executive Management Services, Inc., employee manual for
hourly employees....................................... 91
Chairman Roe:
Ritsema, Bill, president, Ritsema Associates:
Prepared statement of................................ 76
Additional materials................................. 78
Questions submitted from Hon. Martha Roby, a
Representative in Congress from the State of Alabama... 106
Response from Mr. Fritts to questions submitted.......... 108
CORPORATE CAMPAIGNS AND THE
NLRB: THE IMPACT OF UNION
PRESSURE ON JOB CREATION
----------
Thursday, May 26, 2011
U.S. House of Representatives
Subcommittee on Health, Employment, Labor and Pensions
Committee on Education and the Workforce
Washington, DC
----------
The subcommittee met, pursuant to call, at 10:00 a.m., in
room 2175, Rayburn House Office Building, Hon. Phil Roe
[chairman of the subcommittee] presiding.
Present: Representatives Roe, Wilson, Thompson, Walberg,
DesJarlais, Hanna, Rokita, Bucshon, Noem, Andrews, Kucinich,
Kildee, Hinojosa, Tierney, Holt, and Scott.
Also Present: Representatives Kline, Gowdy, and Miller.
Staff Present: Katherine Bathgate, Press Assistant/New
Media Coordinator; Casey Buboltz, Coalitions and Member
Services Coordinator; Ed Gilroy, Director of Workforce Policy;
Benjamin Hoog, Legislative Assistant; Marvin Kaplan,
Professional Staff Member; Barrett Karr, Staff Director; Ryan
Kearney, Legislative Assistant; Brian Newell, Deputy
Communications Director; Krisann Pearce, General Counsel; Molly
McLaughlin Salmi, Deputy Director of Workforce Policy; Ken
Serafin, Workforce Policy Counsel; Linda Stevens, Chief Clerk/
Assistant to the General Counsel; Loren Sweatt, Professional
Staff Member; Aaron Albright, Minority Communications Director
for Labor; Kate Ahlgren, Minority Investigative Counsel;
Tylease Alli, Minority Hearing Clerk; Jody Calemine, Minority
Staff Director; John D'Elia, Minority Staff Assistant; Brian
Levin, Minority New Media Press Assistant; Jerrica Mathis,
Minority Legislative Fellow, Labor; Richard Miller, Minority
Senior Labor Policy Advisor; Megan O'Reilly, Minority General
Counsel; Julie Peller, Minority Deputy Staff Director; and
Meredith Regine, Minority Labor Policy Associate.
Chairman Roe. A quorum being present, the Subcommittee on
Health, Employment, Labor, and Pensions will come to order.
Good morning, everyone.
And welcome to our witnesses. And thank you for joining us
today.
Today, we will examine the role of the National Labor
Relations Board in corporate campaigns.
I realize this is a general definition of the term, but a
corporate campaign is a union effort to disrupt the employer's
routine business. The campaign can take the form of negative
advertising, complaints against employers with various
government agencies, and can even include appeals to political
and religious leaders to put pressure on a targeted employer.
The intent of these tactics is to undermine the reputation
as well as break the will of an employer who refuses to accept
union demands. In some cases, an employer can either concede to
the demands that may undermine the success of his or her
business or accept public contempt, government penalties,
outside interference, and extraordinary litigation costs.
Regardless of the potential outcomes, these campaigns can have
a detrimental impact on the business' bottom line and threaten
the livelihoods of its workers.
Over the years, the use of corporate campaigns has
accelerated. According to one study, between 1974 and 1999,
only 200 corporate campaigns were identified. Yet, in 2005, it
was estimated that between 15 and 20 corporate campaigns were
under way at any given time.
And, recently, the NLRB has taken a number of steps to
expand the arsenal of tactics available for a corporate
campaign. The Board has removed bannering restrictions
previously placed on boycotts of neutral employers. Employees
of on-site contractors have been granted greater access to the
property of the contracting employer connected to an organizing
activity. The Board has also requested briefs that would allow
even greater access to an employer's property.
In one case, the Board moved to uphold an election tainted
by intimidation of workers because the intimidation originated
with nonparties to the election. According to the Board's
logic, the outcome of an election can be overturned only when
the threats by nonparties are ``so aggravated as to create a
general atmosphere of fear and reprisals, rendering a free
election impossible,'' end quote.
Who will determine when a, quote, ``general atmosphere of
fear and reprisals,'' end quote, exists? The worker who
receives an anonymous call at their home or hears a voice
promising to get even if the worker opposes union
representation? Or a Federal bureaucrat?
Actions taken by the Federal Government can send shockwaves
across the country. At a time when our economy is struggling to
get back on its feet and millions are desperate for jobs,
employers and workers are paying close attention to the actions
taken by leaders here in Washington. Policymakers in the
Nation's capital must understand that even the most modest
action can have a dramatic effect on our economy.
The action taken by the NLRB against the Boeing Company is
a good example. While the facts are still in dispute, the
outcome of the case may significantly alter the manner in which
employers invest in our economy and our workforce. I recognize
the case is in the early stages of what will be a costly
litigation, but I wonder if anyone seriously doubts the
tremendous implications this case poses to our workforce and
could possibly deny Congress' responsibility to consider those
implications, ask questions, and determine what is the best
interest of our workers and their families.
Although this is just one of many cases presented to the
NLRB, we must remember the Board does not operate in a vacuum.
It is an arm of the Federal Government, and its decisions
govern virtually every private workplace in the Nation. That is
a tremendous power that comes with great responsibility to act
on behalf of the public good. I am concerned that the Board has
jettisoned this responsibility over the last 2 years in favor
of an activist agenda designed to advance the cause of big
labor over the rights of everyday workers.
The committee has pledged to make job creation and American
competitiveness the leading priorities. We have a job to do,
and it includes overseeing the various boards, agencies, and
departments within our jurisdiction to ensure that they do not
undermine the strength of our workforce. Today's hearing is an
important part of that effort.
I would like to thank you all, the witnesses, again for
your participation and will now yield to Mr. Andrews, our
senior Democratic member of the subcommittee, for his opening
remarks.
Mr. Andrews?
[The statement of Chairman Roe follows:]
Prepared Statement of Hon. David P. Roe, M.D., Chairman,
Subcommittee on Health, Employment, Labor and Pensions
Good morning everyone. Welcome to our witnesses; thank you for
joining us today.
Today we will examine the role of the National Labor Relations
Board in corporate campaigns. I realize this is a general definition of
the term, but a corporate campaign is a union effort to disrupt an
employer's routine business. The campaign can take the form of negative
advertising, complaints filed against employers with various government
agencies, and can even include appeals to political and religious
leaders to put pressure on a targeted employer.
The intent of these tactics is to undermine the reputation as well
as break the will of an employer who refuses to accept union demands.
In some cases, an employer can either concede to demands that may
undermine the success of his or her business, or accept public
contempt, government penalties, outside interference, and extraordinary
litigation costs. Regardless of the potential outcomes, these campaigns
can have a detrimental impact on a business' bottom line and threaten
the livelihood of its workers.
Over the years the use of corporate campaigns has accelerated.
According to one study, between 1974 and 1999, only 200 corporate
campaigns were identified. Yet in 2005 it was estimated that between 15
and 20 corporate campaigns were underway at any given time. And
recently the National Labor Relations Board has taken a number of steps
to expand the arsenal of tactics available for a corporate campaign.
The board has removed bannering restrictions previously placed on
boycotts of neutral employers. Employees of onsite contractors have
been granted greater access to the property of the contracting employer
connected to organizing activity. The board has also requested briefs
that could allow even greater access to an employer's property.
In one case, the board moved to uphold an election tainted by
intimidation of workers because the intimidation originated with
``nonparties'' to the election. According to the Board's logic, the
outcome of an election can be overturned only when the threats by
nonparties are ``so aggravated as to create a general atmosphere of
fear and reprisal rendering a free election impossible.'' Who will
determine when a ``general atmosphere of fear and reprisal'' exists?
The worker who receives an anonymous call at their home and hears a
voice promising to ``get even'' if the worker opposes union
representation? Or a federal bureaucrat?
Actions taken by the federal government can send shockwaves across
the country. At a time when our economy is struggling to get back on
its feet and millions of Americans are desperate for jobs, employers
and workers are paying close attention to the actions taken by leaders
here in Washington. Policymakers in the nation's capital must
understand that even the most modest action can have a dramatic effect
on our economy.
The action taken by the National Labor Relations Board against The
Boeing Company is a good example. While the facts are still in dispute,
the outcome of the case may significantly alter the manner in which
employers invest in our economy and our workforce. I recognize the case
is in the early stages of what will be costly litigation. But I wonder
if anyone seriously doubts the tremendous implications this case poses
to our workforce, and could possibly deny Congress' responsibility to
consider those implications, ask questions, and determine what is in
the best interest of our workers and their families.
Although this is just one of many cases presented to the NLRB, we
must remember the board does not operate in a vacuum. It is an arm of
the federal government, and its decisions govern virtually every
private workplace in the nation. That is tremendous power that comes
with a great responsibility to act on behalf of the public good. I am
concerned the board has jettisoned this responsibility over the last
two years in favor of an activist agenda designed to advance the cause
of Big Labor over the rights of every day workers.
The committee has pledged to make job creation and American
competitiveness its leading priorities. We have a job to do and that
includes overseeing the various boards, agencies, and departments
within our jurisdiction to ensure they do not undermine the strength of
our workforce. Today's hearing is an important part of that effort.
I would like to thank the witnesses again for their participation
today, and will now yield to Mr. Andrews, the senior Democrat member of
the subcommittee, for his opening remarks.
______
Mr. Andrews. Good morning, Mr. Chairman.
Good morning to the witnesses.
And good morning, ladies and gentlemen.
As I think about this hearing, I reflect upon a question
that we should be asking, a question for which I think the
answer is well-settled, and some questions that we shouldn't be
asking.
The question we should be asking is, how can we work
together, as Republicans and Democrats, to address the problem
that nearly 15 million Americans are unemployed as we meet here
this morning? How can we come together and find ways to improve
our investment climate, our business climate, our labor
climate, so that we can put Americans back to work? I think the
chairman was correct in saying that that should be the major
focus of the committee. I just regret the fact that it really
hasn't been. Not one jobs bill has come before this committee
since January when the new majority took over.
The second question that I think is a settled question is,
when people in our system have a political dispute, when they
disagree with each other over something, do they have the right
to express themselves as to how they feel about that dispute? I
think the answer is unequivocally, yes, they do, under the
First Amendment of our Constitution, that if you hold strongly
a political view, you have the right to express it. You
certainly don't have the right to stop someone else from
expressing their view; you don't have the right to defame
someone. But you have the right to express your views.
And some of the testimony we are going to hear this
morning, I think, is actually an excellent example of the First
Amendment at work, that you have one group that feels one way
about a dispute and another group that feels another way about
a dispute, and they take their disagreement to the public
square and they make their point, and we settle our differences
that way.
So I think that this underlying notion that there is
something unusual about political speech that involves a labor
dispute is, in and of itself, unusual. I think the operating
premise of our country is, people have the right to express
themselves, and should express themselves, politically because
it contributes to our dialogue.
And then there is the third question I don't think we
should be asking. The chairman said a few minutes ago about the
Boeing case that the facts are still in dispute, I believe was
the phrase that he used. Well, certainly, it is where the facts
are in dispute that really needs to be noted. The facts are in
dispute in front of an administrative law judge that will begin
conducting a trial on June the 14th.
So here is a situation where there is pending litigation
before an administrative law judge, where the general counsel
of the NLRB has made a decision to pursue an argument in that
forum, and that argument is being vigorously defended by the
other side in that forum. In the normal course of action, it
would be that the judge who runs that forum would make a
decision and the issue would run its course. If people disagree
with the decision, they could take it eventually to the Federal
court system, and the courts will decide who is right and who
is wrong. And then we would have the opportunity to decide if
we want to, in some way, alter or improve the law based upon
the outcome of that decision.
This is perhaps the most egregious example of putting the
legislative cart before the litigation horse. There has been no
decision in the Boeing case. The general counsel has pursued a
claim; that claim will be litigated starting on the 14th of
June, and a decision will be rendered.
What I find the question is that we should not be asking is
the question that, frankly, the chairman of the full committee
and the chairman of the Committee on Oversight have been
asking, which is for the general counsel to turn over his work
product, his attorney deliberations, his trial strategy before
the 14th of June. I think this is irregular. I think it is
inappropriate. And I think that we should let the process go
the way that it plays out.
So we, Mr. Chairman, would rather this morning be talking
about cooperating in ways that would create jobs, but we are
once again having a hearing where we are rehashing some
questions that I think have been settled and some questions
that aren't ours to settle.
But, with that in mind, we are glad the witnesses are here,
and we look forward to robust dialogue. And thank you for the
hearing.
Chairman Roe. Thank you to the ranking member.
It is now my pleasure to introduce our distinguished panel
of witnesses. First, let me turn to my colleague from Indiana,
Mr. Rokita, to introduce our first witness.
Mr. Rokita?
Mr. Rokita. Thank you, Mr. Chairman.
It is my honor to introduce my friend and a great Hoosier,
Mr. Dave Bego.
Dave is the president and CEO and the founder of Executive
Management Services in Indianapolis. He is an industry leader
in the field of environmental workplace maintenance, which he
founded in 1989. EMS prides itself on providing clients a
single-source solution for commercial cleaning, facility
services management, maintenance supply, security, and even
landscaping.
By 2006, EMS, Mr. Chairman, had grown to become a national
company with approximately 5,000 employees servicing over 3,000
facilities. That same year, the SEIU started a corporate
campaign to organize EMS employees, which only recently
concluded.
Given that experience, he has been able to share his story
through his book, ``The Devil At My Doorstep,'' which, Mr.
Chairman, he asks me about once a month if I have read it. I
read most of it. But the fact is, Mr. Chairman, I have lived
this story with Dave Bego.
And I thank him for his leadership. Instead of cowering or
not being able to afford the cost of his story, like so many
captains of industry do, he took the offensive and filed what I
believe to be over 30 pieces of litigation, at the
administrative and other levels, to fight back, and he won
every case.
Thank you. I yield back.
Chairman Roe. I thank the gentleman.
And welcome, Mr. Bego.
Mr. Chet Karnas, our next witness, is the founder and
president of Lone Sun Builders, Inc. Lone Sun Builders is a
licensed general contractor located in Albuquerque, New Mexico,
specializing in commercial construction and remodeling. In
2004, the United Brotherhood of Carpenters initiated a
corporate campaign against Lone Sun Builders, mailing negative
letters to his clients and bannering his work sites.
Welcome.
Ms. Catherine Fisk is professor at the University of
California Irvine School of Law. Ms. Fisk is an expert in labor
and employment law. She has authored three books: ``Labor and
Law in the Contemporary Workplace,'' ``Labor Law Stories,'' and
``The Working Knowledge: Employee Innovation and the Rise of
Corporate Intellectual Property.'' Ms. Fisk received her BA
from Princeton University, JD from the University of
California-Berkeley, and LLM from the University of Wisconsin.
And welcome to the committee.
Mr. Jonathan Fritts is partner of Morgan Lewis' labor and
employment practice. Mr. Fritts' practice encompasses a broad
range of labor and employment law matters, with a particular
emphasis on labor matters arising under the NLRA and the
Railway Labor Act. He is regional co-chair of the American Bar
Association Committee on Practice and Procedure under the NLRA
and an adjunct professor at Georgetown University Law Center.
Mr. Fritts received his BA from the University of Virginia and
his JD from Georgetown University Law Center.
Welcome to the committee.
Pursuant to Committee Rule 7(c), all Members will be
permitted to submit written statements to be included in the
permanent hearing record. And, without objection, the hearing
record will remain open for 14 days to allow such statements
and other extraneous material referenced during the hearing to
be submitted for the official hearing record.
[The information follows:]
Prepared Statement of Hon. Joe Wilson, a Representative in Congress
From the State of South Carolina
Mr. Chairman, thank you for holding a hearing on corporate
campaigns and the National Labor Relations Board. I would also like to
thank Dave Bego, Chet Karnas, Jonathan Fritts, and Catherine Fisk for
coming to speak with us this morning.
From the moment the 112th Congress began, one of the main focuses
for House Republicans has been to address job creation and job growth.
Earlier this month, the U.S. Department of Labor announced that the
national unemployment rate is 9.0 percent. This means over 13 million
Americans are currently unemployed. That is why I am so concerned with
the unemployment situation in our country, specifically in South
Carolina. Recently, my home state has served as the center of a
controversial holding involving the executive branch and a large
manufacturer that has created thousands of jobs across the country.
Businesses should have a right to contract where to work in the
best interest of their shareholders and workers. We are now in an age
that is unprecedented: the Boeing complaint is a threat to all right-
to-work states, not just South Carolina.
Being a right to work state means employees in those states can
choose for themselves whether or not to join a union. The NLRB decided
to file a complaint against Boeing on behalf of a union, the
International Association of Machinists and Aerospace Workers District
Lodge No. 751. The complaint alleges Boeing ``transferred work'' of its
787 Dreamliner assembly line from Washington state to South Carolina.
However, not one single union employee suffered a detriment due to
Boeing's decision to relocate. I believe this pursuit by the NLRB will
be resolved quickly.
I hope this hearing will provide clarity to these issues. I look
forward to hearing what you all have to say on how we can move forward
to focus on creating a climate that promotes job growth and job
creation.
I would like to ask a question of Mr. Fritts:
1. In 2009, over 16,000 unfair labor practice charges were filed
against employers. Approximately a third of the charges were found to
have merit and only a portion of those resulted in an unfair labor
practice conviction. How many unfair labor practice complaints have you
defended? How many of those complaints were found to have merit? On
average, how much does it cost an employer to defend an unfair labor
practice charge? How can Congress stop frivolous administrative
complaints?
______
Chairman Roe. Now, before I recognize each of you to
provide your testimony, let me briefly explain the lighting
system. You will each have 5 minutes to present your testimony.
When you begin, the light in front of you will turn green. When
1 minute is left, the light will turn yellow. And when your
time has expired, the light will turn red, at which point I
would ask you to wrap up your remarks as best you can. And the
chair will try to do the same thing.
After everyone has testified, Members will have 5 minutes
to ask questions of the panel.
And now we begin. I would like to recognize the witnesses.
I would like to start with Mr. Bego.
STATEMENT OF DAVID A. BEGO, PRESIDENT AND CHIEF EXECUTIVE
OFFICER, EXECUTIVE MANAGEMENT SERVICES, INC.
Mr. Bego. Well, thank you, Chairman Roe, distinguished
members of the committee.
Todd, thank you very much. You stole about the first 1
minute of my speech.
I thank you for having me here today. I think my story is
not unique across this country. In fact, I think it is buried a
lot. And I think everybody, including the people in this room,
need to understand what happens with corporate campaigns.
Before I go on, though, I would like you all to know that I
am not anti-union. Before I started Executive Management
Services in 1989, I worked for an agribusiness company out of
Fort Wayne, Indiana, where I ran soybean processing plants and
feed mills and grain elevators for almost 8 years. And I was
kind of their turnaround specialist; I would have to go into
plants that were underperforming and fix them.
Invariably, what I found was that the processes, machinery,
and everything was not the problem. The problem was, the people
weren't engaged. And I spent a lot of time working with the
people, getting the management staff working with the people,
cleaning up break rooms and locker rooms, and turning the
workforce around.
Now, the key to this: Every one of those plants were union
plants--Teamsters, grain millers, and others. I never had any
problems with the rank-and-file union members. What I am about
to talk about in the corporate campaign is really about big
labor. It is not the rank and file.
As Todd said, I started the company in 1989. It was just
myself and my wife, and we started out with a $30,000
investment in our savings account. And we progressed through
the years, and, from my management style and perspective, in an
entry-level-position company, which we are, we needed to take
care of our employees. We started out offering health care and
other benefits in the mid-1990s. We continued to grow until, by
2005, at that point we were about 4,000 people in about 33
States.
And then the devil knocked at my doorstep, in the form of
the Service Employees International Union, the SEIU. I received
a letter from them that they wanted to talk to me about the
benefits they could bring. I had a meeting with them, and at
the meeting all the guy would tell me was, ``I want you to sign
a neutrality agreement.'' And for those of you who don't know
what a neutrality agreement is--and, by the way, he didn't have
one with him; he just wanted me to sign it. And I told him, ``I
have to read it first.''
When he finally gave it to me about a month later, it is
the genesis of the Employee Free Choice Act, card check. It has
eliminated secret-ballot elections, has a gag order on the
employers, expedites arbitration and contract negotiation. And
one of the most fundamentally onerous provisions I have ever
seen is you have to give a list of all your employees and their
home addresses. Because it reverts to card check, that is so
they could go and beat on their doors and intimidate them into
signing cards.
And if you don't think it is true, I invite you to read my
book and the stories that are in it about it, because they did
it to some of my employees anyway. I wrote the book because I
was appalled at the tactics and the ruthlessness that they used
against my employees, my customers, my company, and my family.
You have to understand something about this. Corporate
campaigns, for the most part, are not because the employees
invited the unions to come in. And I would guess somewhere in
the 90-percent-plus range. It is a business model. What they do
is they target an area like ours, in 2005-2006, it was
Indianapolis, Cincinnati, and Columbus, Ohio, and they also
came after us in St. Louis and Pittsburgh. They look at it and
say, ``If we can organize this many janitors, we can make this
much money off of it.''
When I finally met with them the last time before the war
started, I said, ``Look, why don't we just have an election?''
And they said, ``No, we don't want to have an election. We want
you to sign the neutrality agreement.'' And an employee from
the Service Employees International Union looked at me and he
says, ``Mr. Bego, you are not going to see the neutrality
agreement, are you?'' I said, ``I have no intention of signing
it. It is morally wrong. I cannot take my employees' free
choice away by eliminating the secret-ballot elections. If you
are going to have an election, fine.'' He said, no. He looked
at me and said, ``We enjoy conversation, but we embrace
confrontation. We are going to attack you, your employees, and
your customers in the next 90 days.''
That was a 5-year war that we won. And you know something?
Today, our employees enjoy better wages and better benefits.
They don't pay union dues. And I feel sorry for all my
competitors who gave in and signed, because I will tell you,
they are sorry too.
[The statement of Mr. Bego follows:]
Prepared Statement of David A. Bego, President and CEO,
Executive Management Services, Inc.
Chairman Roe and Distinguished members of the Committee: My name is
David A. Bego. For the past twenty (20) plus years, I have been the
president and CEO of Executive Management Services, Inc. (hereafter,
``EMS''), a janitorial and facilities maintenance company headquartered
in Indianapolis, Indiana, which I founded in 1989. I appreciate the
invitation and the opportunity to speak to you on a topic on which I
have, unfortunately, become quite familiar. From 2005 through 2008, EMS
was subjected to a vicious corporate campaign by the Service Employees
International Union, Local 3, based, at the time, in Cleveland, Ohio.
While the campaign ultimately failed, it was at a substantial cost,
both in the financial sense, and in terms of reputational and
relationship damage. In light of these experiences, I have become an
advocate against forced unionism, against legislation providing
political favor to labor unions, and against the current labor board's
agenda to empower Big Labor.
Introduction
I began EMS as a young entrepreneur with $30,000 and a dream of
running a first-class company. Through hard work and good luck, EMS
fulfilled my dream. EMS now has approximately 4,000 employees,
maintains branch operations in twenty-two states, and services
companies in thirty-eight states, as far east as New Jersey, and as far
west as Utah. The EMS business model is to contract with companies for
the provision of janitorial and maintenance services, to place our
employees into customer facilities to provide such service, and to
provide first class service through superior training and the proper
tools and equipment. Unlike many of our competitors, our benefit is not
necessarily reflected in the pricing. We do not cut corners to provide
price advantages. Rather our edge is in our people, in the quality of
our services, and in our ability to meet almost any customer need.
Our company is unique in that, in addition to standard office
cleaning, we also provide such services in industrial and other
environments with unique needs. We provide our services in steel mills,
in processing plants, in laboratories and medical offices, and in
educational settings, in addition to the standard commercial office
environment.
We are on the forefront of the ``green'' movement. EMS is one of
only two companies headquartered in the state of Indiana to obtain the
GS-42 certification for green cleaning from ``Green Seal,'' a non-
profit organization devoted to setting environmental standards for
cleaning, and promoting the use of environmentally responsible
products, as well as providing education and training on
environmentally friendly cleaning services and products. Such
certification assures its customers that EMS is on the forefront of
providing healthy and environmentally friendly services.
I am not a person who is anti-union by nature. Nor am I one who
believes that labor unions have necessarily exhausted their usefulness.
Prior to my founding of EMS, I was employed by Central Soya as a
supervisor in an experimental feed mill. As supervisor, I often
supervised union employees. My perspective was that it did not matter
whether the employees were union or not. To operate the mill
effectively, the employees needed a clean and safe working environment,
they needed to be treated fairly, and they needed to have the belief
that management respected them. This philosophy served me well, as I
was recognized as an individual with a unique ability to turn around
problem mills and make them highly productive. In retrospect, perhaps
this ``ability'' was not unique at all, rather just a philosophical
belief in abiding by the ``Golden Rule.'' Such treatment should be
applied to all employees, union or not. For purposes of full
disclosure, I believe that there are situations, particularly where
employees are in work environments, which involve substantial threats
to their safety or health, that labor unions fulfill a great need to
maximize worker safety. However, the existence of a union alone does
not necessarily make one position better than an equivalent position
without union representation.
Unfortunately, events that have transpired over the past five to
six years have made me aware of the efforts of certain labor unions
attempt to impose forced unionism. This is an effort by labor unions,
not to organize employees based on employee needs, but rather to
organize companies, or at a minimum, subdivisions of a company, for the
purpose of increasing membership and, ultimately, the union's political
power. While the union rhetoric remains that they are acting for the
benefit of the employee, their actions clearly indicate they are not.
To be perfectly clear--this practice of forced unionism is one to which
I am very much opposed.
Forced Unionism and the Push for EFCA
A labor union's attempt at forced unionism is based on a business
model. This model includes identification of a geographic area,
identification of the potential business targets in that geographic
area, and analysis of the total number of potential ``members'' which
the union may acquire. It is simple statistical analysis. In many, if
not most, cases there is no attempt by any employee of the companies
targeted to reach out to the labor union for assistance.
Once the labor union has identified the scope of its target, its
representatives then reach out to the companies to be impacted. The
representative approaches a key executive of the employer in a
relatively friendly matter, requesting a meeting. When they are granted
this meeting, the labor union representative informs the company that
it intends to unionize the workforce and that it wishes for the company
to sign a ``Neutrality Agreement'' in which the company will agree to
remain ``neutral.'' \1\ The union's definition of ``neutrality''
however, is surprisingly one-sided. Per the terms of the the agreement,
the company is required to (1) produce the names of all of it's
employees and their contract information, (2) agree not to say anything
negative about the union or otherwise interfere with their attempts to
organize the company's employees, and (3) agree to accept the union as
the representative of the company if they produce authorization
cards\2\ for more than fifty percent (50%) of the class of employees.
This automatic recognition would be in lieu of the holding of a secret
ballot election by the National Labor Relations Board, the federal
agency charged with the oversight of labor matters and the
administration of such representation elections. The system proposed in
the neutrality agreement is very much like the ``card check''
legislation that has been proposed under the misnomer of the ``Employee
Free Choice Act,'' which has been before Congress on multiple occasions
over the past several years, and which its proponents have been unable
to pass.
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\1\ The Neutrality Agreement presented to Executive Management
Services by the SEIU Local 3 for signature is enclosed as Attachment 1.
EMS has obtained copies of other Neutrality Agreements entered into by
the SEIU, and all are in substantially the same format as Attachment 1.
\2\ The Union Authorization Card utilized by the SEIU local 3 is
enclosed as Attachment 2.
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If the company refuses to sign the neutrality agreement, or if it
otherwise takes action which the union finds, in its own definition,
not to be ``neutral,'' the union begins to target the company through a
variety of means, including smear campaigns, deceptive representations,
filing of frivolous charges with government agencies, the targeting of
the company's employees and customers, and other actions ultimately
designed to force the company to capitulate to the union's demands.
It does not make one bit of difference to the union who the company
is, how well they treat their employees, how much better they pay their
employees, or what benefits they provide. In short, the unions
utilizing the forced unionization drives, ARE NOT, in any way,
concerned with the best interests of the employees, and they are not
motivated, by the ``injustices'' they allege to have been committed by
the company.
The SEIU at My Doorstep
Prior to 2005, I would not have believed such a scenario to
actually exist. In that year, however, the SEIU came to my doorstep. It
began with calls in December of 2005, and finally an arranged meeting
with SEIU contract administrator Dennis Dingow in April 2006. Mr.
Dingow provided the altruistic sales pitch of the SEIU--that they were
interested in improving working hours and working conditions for
janitors around the country. I pressed Mr. Dingow for details on the
proposal he was setting forth. He was not forthcoming, but rather
surprisingly evasive. I also asked for information as to which of our
accounts the request for the union's representation had come from. Mr.
Dingow did not have an answer. To date, I have received no information
which leads me to believe that any of our employees took steps to
affirmatively request the SEIU's assistance due to any work condition,
wage or benefit, or other condition of employment.
I indicated to Mr. Dingow that he needed to provide me details of
what the SEIU intended. He responded that they intended to organize all
of the janitors in the Indianapolis area, and this included those
employed by Executive Management Services, Inc. It was the desire of
the SEIU that EMS be ``neutral'' in the process. I responded that I
believed that EMS would be. Mr. Dingow indicated that by ``neutral,''
he meant that they wanted EMS to sign a neutrality agreement.
As I researched the issue more carefully, spoke with advisors, and
generally became more educated on the issue, it became clear to me that
I simply could not agree to that which the SEIU was asking. First, I
was not willing to give my employees confidential contact information
to the SEIU. I was not sure if I could legally do so, and more
importantly, I felt that the employees would be angered by the company
divulging such information. I also feared that the union might abuse
such information by contacting employees at inappropriate times,
bothering those who may be uninterested through repeat contact, or
placing undue pressure on the employee to commit to its cause.
Second, it seemed clear to me that if the employees wanted to have
a union, they could choose to do so through a secret ballot election,
in much the same manner as traditional elections are conducted. In this
manner, their votes would remain private and, more importantly, there
wouldn't be a concern as to whether the employees were being improperly
persuaded or bothered. The system of ``card check,'' on the other hand,
seemed to me to be both public and fraught with danger. Would
organizers share the identities of employees who had abstained with
those who had signed the cards? How would I know if organizers were
harassing my employees? Would organizers attempt to meet them at their
homes? While the rhetoric of the union is that they don't commit any
undue influence, only in an election atmosphere are there proper
safeguards to ensure that such influence is not exerted. In short, in
my attempt to do that which was in the best interest of the employee, I
simply could not see how it would be to their benefit to risk
subjecting them to undue pressure, and to unilaterally sacrifice their
right to vote on whether to be represented by this labor union.
There were additional conversations and meetings with Mr. Dingow.
Ultimately, however, he recognized that I was not going to sign the
Neutrality Agreement. I stated such, but also told Mr. Dingow on
several occasions I was amenable to the SEIU petitioning for an
election and would live with the results. It was at this moment that
the relationship truly turned adversarial for the first time. Mr.
Dingow stated to me, ``Mr. Bego, we enjoy conversation but embrace
confrontation. If you do not execute this Neutrality Agreement, we will
begin to target you, your employees and your customers.'' Needless to
say, Mr. Dingow's threat did not work. EMS did not capitulate, and a
four-year, million-dollar battle ensued between EMS and SEIU ensued.
On advice of our counsel, we instructed our managers to keep
detailed records of the activities any organizing activity which
occurred. We provided extensive training and instruction to our
managers and supervisors on compliance with the National Labor
Relations Act. Our various accounts were in close communication with
our human resources department, and they, in turn, were in close
communication with the executive staff and our legal advisors. What
developed out of these efforts was a detailed record of the SEIU's
corporate campaign against EMS. In addition to the noisy rallies and
constant handbilling which typically occasion these campaigns, the
actions of the SEIU included:
From January 2007 to May 2008, the SEIU, not the employees
of EMS, filed thirty-six unfair labor charges against EMS with the
National Labor Relations Board. Approximately twenty-four of these were
dismissed or voluntary withdrawn as having no merit. The remainder was
resolved pursuant to a settlement agreement entered into between EMS
and the SEIU (discussed further below).
The SEIU assisted in the filing of three complaints with
the Occupational Safety and Health Administration (or the state
equivalent agencies). Two of these complaints alleged acts against EMS
in facilities in which we were not present. The third made allegations
that EMS required its employees to dispose of human body parts from
biological labs. This, of course, made our customer very worried and
generated a phone call from the appropriate governmental agency.
However, we were able to quickly resolve and dismiss the concern.
The SEIU paid religious leaders to support its cause,
including distributing letters against EMS, holding rallies, and
staging sit-ins and hunger strikes. At one point, this group of
religious leaders requested that I meet with them. I did so, and found
their motivations to be based on lack of knowledge and misinformation
provided by the union. For example, this group believed that the wages
and benefits provided by EMS to its employees were inferior to those,
which had been secured by the SEIU to other accounts in the geographic
area and in similar areas. Union contracts that have been obtained by
EMS have proven this not to be the case.
Over a dozen members of the SEIU trespassed into one of
the largest buildings in downtown Indianapolis, and one of the largest
accounts of EMS, and caused to be released hundreds of purple balloons
into the building's five-story atrium.\3\
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\3\ Attachment 3 consists of a photograph taken during the event of
the SEIU's balloon release in the atrium of a building in downtown
Indianapolis.
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The SEIU staged a lemonade stand on a public street at
which they provided free lemonade to passer-bys if these persons would
call the CEO of a customer of EMS and request that they cease business
with EMS and find a ``responsible'' contractor. The SEIU even supplied
the cell phone from which these calls were made.
The SEIU accessed the roof of the Western Southern
Insurance corporate headquarters in Cincinnati, Ohio and hung a massive
multi-story banner.\4\
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\4\ Attachment 4 is a photograph of the banner hung from the
rooftop of the corporate headquarters of Western Southern Insurance.
``Justice for Janitors'' is a reference to a campaign in which the
SEIU, including SEIU Local 3, was involved.
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The SEIU filed frivolous charges with the NLRB, and then
distributed fliers indicating that EMS was under investigation by the
``federal government'' for ``unfair labor practices,'' including the
harassment and intimidation of its employees.
Distributed fliers making unsubstantiated allegations of
civil rights violations.\5\
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\5\ A copy of one of the flyers alleging ``civil rights abuses'' is
attached as Attachment 5.
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The SEIU utilized religious organizations to interfere
with the international business affairs of a customer of EMS, in an
effort to pressure the customer cease business with EMS. This included
paying for a disgruntled employee of EMS to be flown to London to
embarrass the customer at an economic conference.
On Halloween night in 2007, the SEIU had children trick or
treat in my residential neighborhood. The children were instructed to
hand out fliers at each house they went to for candy. These flyers
claimed that buildings cleaned by EMS were ``Houses of Horror'' where
employees were abused and mistreated every night.\6\ Meanwhile, union
organizers were in cars driving the streets of my neighborhood!
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\6\ See Attachment 6.
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Organizers continually harassed our employees trying to
coerce them into signing union cards.
The SEIU Infiltrated local governments to obtain favorable
decisions for the SEIU, and used politicians in an attempt to have EMS
contracts canceled in favor of responsible contractors, a euphemism for
union contractors.
The details of the campaign are more fully set forth in my book,
The Devil at My Doorstep.\7\ The examples above are but a small
sampling of the hundreds of tactics we were forced to endure. By these
examples, however, it is my hope to demonstrate the manner in which the
SEIU utilized government agencies and the media in general to
accomplish their own objectives. This campaign against EMS was a prime
example of their utilization of the strategy of a ``death by a thousand
cuts.''
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\7\ For more information on the book The Devil at My Doorstep,
visit http://www.thedevilatmydoorstep.com.
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It is important to understand that, throughout this process, I
consistently communicated to the SEIU that EMS was happy to participate
in an election. In June 2007, I even took out an advertisement in the
Indianapolis Star calling on the SEIU to either ``Fish or Cut Bait.''
\8\ I did not want to continue through this campaign, and hoped that
through the court of public opinion I could place pressure on them to
agree to an election, in which I was confident the employees would
choose not to go with the SEIU as their bargaining representative. This
did not work, as the SEIU simply did not have any interest whatsoever
in an employee election.
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\8\ The newspaper advertisement inviting the SEIU to engage in a
secret ballot election is included as Attachment 7.
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On September 25, 2007, EMS was notified by a representative of the
SEIU that seven of EMS's workers several of which we believed to be
union salts were going on strike--a first in the nearly twenty year
history of EMS. Eventually a total of ten workers (out of approximately
350 in the Indianapolis area) went on strike, representing
approximately three percent (3%) of our Indianapolis workforce. The
notice indicated that the strike was due to unfair labor practices. We
knew based on the activities of the union to date, that this was not
true.
The Involvement of the NLRB
In May 2008, following nearly two (2) years of picketing,
harassment, wrongful accusations, and defamatory language, I agreed to
enter into a settlement agreement with the SEIU with an intent and hope
of ending the entire campaign. Both EMS and the SEIU had filed unfair
labor practices charges with the NLRB against the other. By entering
this agreement, the SEIU was agreeing to no longer picket or threaten
to picket EMS in Central Indiana. EMS was required only to abide by the
provisions of the National Labor Relations Act, which I believe had
been done any way. In my mind, there was little reason not to enter
this agreement. By the Agreement, there was no finding that EMS had
engaged in any wrongdoing, and no admission by EMS as to such. Had
either of these elements been a requirement of settlement, I almost
certainly would not have agreed to execute the document. Entering the
Settlement Agreement was simply an attempt to put the events of the
corporate campaign behind me.
Shortly after execution of the Settlement Agreement, however, I was
notified by the union that eight (8) workers that had gone on strike
were demanding reinstatement. Upon consultation with my attorneys, I
refused. From the start, it was clear that the worker's strike was a
recognitional strike with economic motivations. The signs that were
carried in the course of the picketing, and the handbills which were
distributed, consistently made reference to ``worker wages,'' ``health
care,'' ``worker benefits,'' and ``working conditions,'' or they made
generally reference to EMS not being a ``responsible'' company. It was
rare when a handbill referenced an unfair labor practice. The strike
simply did not have a ``unfair labor practice'' component to it.
Upon receiving notice of EMS' refusal to reinstate the employees,
the union again filed multiple unfair labor practice charges against
EMS. We were comfortable that the NLRB would rule in our favor on the
issue. The settlement agreement itself identified that the SEIU had
engaged in illegal recognitional picketing when it had not filed a
petition with the board to be recognized as the bargaining
representative of the employees, and had set forth the union's
agreement not to engage in any further picketing of Executive
Management Services in Central Indiana or engage in secondary
boycotting against EMS where the purpose was to force EMS to recognize
bargain with the SEIU.
To our shock, the NLRB, an agency whose mission statement clearly
states it is bound to protect the secret ballot election and administer
the NLRA act fairly without prejudice to employees, employers and
unions, agreed with the SEIU and the General Counsel filed charges
against EMS for refusing to reinstate the employees in retaliation for
their support of the union. It was the position of the NLRB that EMS
had engaged in unfair labor practices, and that this--at least in
part--motivated the employees to engage in a strike, and that because
the strike was an unfair labor practice strike, the employees had the
right to reinstatement.
The position was absolutely preposterous. The SEIU had concocted an
elaborate scheme involving the filing of a frivolous charges by
organizers, not EMS employees, to convey the illusion of a multitude of
``unfair labor practices'' to support the notion that the strike was
motivated by the unfair labor practices. Despite this, the NLRB, in the
settlement agreement, had required the SEIU to no longer engage in
illegal recognitional picketing and refrain from secondary boycotting.
The NLRB was now reversing course and stating to EMS that it believed
the picketing to have been motivated by unfair labor practices.
I can only believe that the position taken by the NLRB was either
motivated by bias by the General Counsel's office in favor of the local
union, or was the result of gross incompetence. In reviewing the
numerous handbills and picket sign, there can be no doubt that the
strike was an attempt for recognition by the union, and was
economically motivated. The record from the hearing also shows that
some of the striking employees produced affidavits indicating that no
unfair labor practices had been committed. Nevertheless, the NLRB
utilized their testimony in an effort to prove the unfair labor
practices, despite their previous affidavits.
Further, it was absolutely clear in speaking with the employees,
that the strike was completely motivated by economics. The employees
appeared to have been coached in to discuss unfair labor practices in
their testimony. They made reference to ``UPLs'' and ``unfair practice
labors,'' as if to indicate that they knew they were to say something
to this effect, but not fully understanding what it meant. In the
decision rendered by Administrative Law Judge Arthur Amchan, he wrote,
``* * * at many points it is clear to me that the testimony of General
Counsel's witnesses is contrived and very likely to be untruthful.''
\9\ Executive Management Services, and Service Employees International
Union, Local 3 and Service Employees International Union, Local 1,
Cases 25-CA-30221, 25-CA-30223, 25-CA-30226, 25-CA-30266, 25-CA-30328,
25-CA-30392, 25-CA-
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\9\ The link for Judge Amchan's decision may be found at Attachment
8. 30459, 25-CA-30485, 25-CA-30486, 25-CA-30487, 25-CA-30489, 25-CA-
30553, 25-CA-30537, 25-CA-30690, 25-CA-30692, 25-CA-30693, 25-CA-30694,
25-CA-30695, 25-CA-30697, 25-CA-30698 (2009) at page 5. Further, Amchan
wrote, ``[the] record indicates at least several instance of outright
fabrication.'' Id.
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When Judge Amchan rendered his decision in favor of EMS, it was my
belief that the ordeal was finally finished. Once again, I was to be
surprised. Despite the overwhelming evidence to the contrary, and the
convoluted and clearly false testimony of the NLRB's witnesses, the
General Counsel of the NLRB appealed Judge Amchan's decision to the
five-member NLRB in Washington. In June, 2010, Chairperson Liebman,
along with members Schumber and Pierce, issued a decision in favor of
EMS finding that the strike was not, in any way, motivated by unfair
labor practices, and was instead only a strike motivated by a desire to
force the company to recognize the SEIU as the bargaining
representative of the employees.\10\
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\10\ The link to the NLRB's decision is found in Attachment 9.
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Current Actions of the NLRB
As an individual who has witnessed first-hand the unsavory tactics
employed by some labor unions in their corporate campaigns to force
unionization on companies and their employees, I am troubled by the
direction of the current labor board, their current path of
implementing the agenda of big labor, and their unapologetic actions in
contravention of the will of Congress. Over the past five to six years,
Congress has failed to generate the support necessary to pass the
disastrous Employee Free Choice Act (``EFCA''). The goal of EFCA was to
provide labor unions the tools to bypass the secret ballot process to
increase its struggling membership. The current labor board is
accomplishing this goal through its rulemaking, overruling of case law
precedent, and though the General Counsel's issuance of enforcement
directives to the NLRB field offices. Much of the action that has been
taken is designed to provide labor unions with greater ability to
pressure employers and their employees to execute neutrality agreements
and check cards without consequence. The NLRB has recently issued
rulings expanding their rights without running afoul of rules on
bannering, secondary boycotting, and even the making of verbal threats.
These actions are all designed to increase the labor union's ability to
utilize the card check process, rather than the traditional secret
ballot.
The question of why Congress left an exception to the secret ballot
election open in the NLRA when it passed the Taft-Hartley amendment in
1947 should be considered. Was it to provide labor unions with an
opportunity to run smear campaigns against employers in the form of
corporate campaigns? Or was it, as the language suggests, simply an
avenue left available to unions and employers that decided to work
conjunctively for the employees? If it was the later, have we been
faced with years of erroneous case law which has led us to where we are
today?
Of further concern are the various memorandums issued by the
interim General Counsel, wherein he has sought to broaden the fines and
penalties that are assessed in situations involving violations of the
National Labor Relations Act. While these policies appear neutral on
their face, they are in fact a sword to be used by big labor in its
corporate campaign arsenal when organizing employers. As was seen in
the case of EMS, the labor union never hesitated to use the process of
filing unfair labor practice charges in an effort to exert pressure to
make EMS capitulate with its demands. Despite the fact that the union
was unsuccessful on all of its charges, there was no mechanism to deter
such behavior. To date, there exist no penalties against either unions
or employers for filing frivolous claims with the NLRB or any other
administrative agency. Until such laws are enacted, it should be
expected that the labor unions will continue to use all weapons in its
arsenal, as it is in their business model to do so.
Finally, I fine it unfortunate that Congress has continued to allow
the National Labor Relations Act to function as a biased and
politically motivated piece of legislation. The Act is a creature of
the legislature. Rather than drafting the legislation in such a manner
as to control the process, thereby removing politics from the equation,
Congress has left the NLRB with a tremendous amount of authority to
dictate the outcome of labor matters. It should, therefore, be expected
that without implementation of the proper safeguards and controls, this
trend shall continue. So long as politicians receive benefits from
their friends in big labor, the NLRB can never be independent and free
from political influence, and its integrity shall always be
compromised.
Thank you again for the opportunity to present this information to
you today. I am happy to provide the Subcommittee with additional
information that it may deem to necessary or helpful, and to answer any
questions from the members.
______
ATTACHMENT 2
ATTACHMENT 3
ATTACHMENT 4
ATTACHMENT 5
------
Chairman Roe. Mr. Karnas?
STATEMENT OF F. CHET KARNAS, PRESIDENT,
LONE SUN BUILDERS, INC.
Mr. Karnas. Chairman Roe, Ranking Member Andrews, and
members of the Subcommittee on Health, Employment, Labor, and
Pensions, good morning. And thank you for the opportunity to
testify before you today.
In the interest of time, I request that my full testimony
be included in the hearing record, please.
My name is Chet Karnas. I am the president of Lone Sun
Builders, a small framing and drywall subcontractor in
Albuquerque, New Mexico. Lone Sun and its 55 employees are
dedicated to providing quality work through ethical business
practices, and we are very involved in our community.
I also appear before you today on behalf of Associated
Builders and Contractors. ABC represents more than 23,000 merit
shop construction contractors, employing nearly 2 million
workers. ABC's membership is bound by a shared commitment of
merit shop philosophy based on the principles of
nondiscrimination due to labor affiliation and the awarding of
construction contracts through competitive bidding.
I also am a Board of Directors position at AGC of America,
as well.
Lone Sun Builders started as a small company. As we grew,
we cultivated a family atmosphere in which workers were taken
care of and fairly treated. Today, Lone Sun is one of the most
well-respected contractors in the State.
Despite our reputation, or perhaps because of it, we have
been targeted over the years by unions, particularly the
carpenters' union. We have experienced corporate campaigns
firsthand, during which unions engage in unethical coercion and
intimidation in an attempt to smear responsible employers' good
names.
In the construction industry, unions do this to pressure
merit shop contractors to sign neutrality agreements or become
union signatories. If these objectives fail--and they often
do--they use these tactics to try to put contractors out of
business.
Lone Sun has battled the aggressive corporate campaign
tactics, including bannering, for several years now. But prior
to that, our company enjoyed a professional and respectful
relationship with the unions for more than 20 years. We all
lived and worked in the same community, so the relationship was
courteous and professional. We were all stakeholders in our
community.
Eventually, the carpenters' union decided to bring in
organizers from other parts of the country, and the situation
started to change. The carpenters' organizers sent letters to
our clients, as well as developers and general contractors,
which stated the union had a labor dispute with us, and they
wrongly and falsely claimed that we did not provide benefits to
our employees, which we do. We refuted the claims and
publicized our excellent benefits program. Rather than engage
in an open and constructive dialogue, the union told us to
expect continued harassment.
In 2008, the aggressive bannering campaign started, where
``Shame On'' banners appeared on approximately one dozen of our
construction sites. The carpenters displayed these large signs
in front of our clients' buildings, emblazoned with
inflammatory, unfounded claims about labor policies. And, on
some projects, the client's name on the banners had not even
hired us; they were tenants having work performed by general
contractors or building owners and had no relationship with the
contractors.
The following year, the union escalated its campaign, to
include mass pickets at several large projects. These pickets
included vulgar chants, physical threats, name-calling, false
accusations, trespass, blocking of egress and ingress. During
the campaign, the carpenters showed up at a local church, where
they disturbed services after repeated pleas to stop. They were
eventually dispersed by the police at that event.
Realizing that we needed to fight back to survive the
union's undue treatment, we embarked on a campaign of our own
to protect our integrity and our reputation. We do have
something to protect, and that is our reputation.
We generated media interest and launched a blog chronicling
Lone Sun's experience with the carpenters' corporate campaign.
We also learned, doing that blog, that the union was hiring
outside laborers to engage in this behavior, paying them low
wages and no benefits. It is ironic that a company like ours
that pays excellent wages and has benefits would be picketed by
people that don't have benefits and paid low wages.
I firmly believe that our actions had a positive impact on
the court of public opinion and it helped us avert complete
disaster. But despite our efforts, business has still suffered,
many clients were impacted, and many general contractors were
reluctant to utilize our services, fearing the organizers'
aggressive and vulgar presence. We estimate that we have
suffered about a 20 to 30 percent decline in sales directly due
to the negative impact of the carpenters' corporate campaign.
As a responsible, ethical contractor with a workforce full
of happy and well-compensated employees, I have to wonder, why
us? Experience has taught me that I may never get the direct
answer. All I know is that, as long as we remain defiant, the
union seems ready to do anything it can to destroy our
company's reputation.
On behalf of Lone Sun Builders and ABC, I would like to
again thank the committee for holding today's hearing. And I am
pleased to see a renewed interest on Capitol Hill in the
problems that corporate campaigns can cause for honest,
hardworking merit shop contractors. I look forward to working
with you on this issue.
This concludes my formal remarks. Thank you.
[The statement of Mr. Karnas follows:]
Prepared Statement of F. Chet Karnas, President and Owner, Lone Sun
Builders, Inc., on Behalf of Associated Builders and Contractors
Chairman Roe, Ranking Member Andrews and members of the
Subcommittee on Health, Employment, Labor, and Pensions: Good morning
and thank you for the opportunity to testify before you today on
``Corporate Campaigns, the NLRB and the Impact of Union Pressure on Job
Creation.''
My name is Chet Karnas. I am the president and owner of Lone Sun
Builders, Inc., a small framing and drywall subcontractor based in
Albuquerque, New Mexico. Lone Sun provides hands-on project management,
qualified supervision, timely and cost-efficient scheduling, and a
certified safety program. Our mission is, and always has been, to
provide quality with integrity through ethical business practices. Lone
Sun's reputation is reinforced by our loyalty to and respect for our
clients, vendors and, most importantly, our 55 employees.
I also appear before you today on behalf of Associated Builders and
Contractors (ABC). ABC is a national trade association representing
more than 23,000 merit shop contractors that employ nearly two million
workers whose training and experience span all of the 20plus skilled
trades that comprise the construction industry. ABC's membership is
bound by a shared commitment to the merit shop philosophy. This
philosophy is based on the principles of nondiscrimination due to labor
affiliation and the awarding of construction contracts through
competitive bidding based on safety, quality and value.
Lone Sun Builders' Battle with Corporate Campaigns and Bannering
Lone Sun Builders has simple roots, starting as a ``two guys and a
pick-up truck'' operation. As we have grown to add more employees, we
have chosen to operate our business like an extended family in which
workers are taken care of and treated fairly. Today, Lone Sun has grown
to be one of the most highly regarded subcontractors in the state, and
a proud merit shop contractor.
However, because Lone Sun sets the bar high among subcontractors,
we have been repeatedly targeted by unions attempting to organize our
employees. Unions have launched several ``corporate campaigns'' against
us over the years, during which they have engaged in many unethical
practices, including attempts to smear our name through ``bannering.''
In Lone Sun's experience, bannering has consisted of the union
displaying large signs in front of our clients' (and other neutral
third parties') places of business. These signs were emblazoned with
inflammatory, unfounded claims about our labor policies, and designed
to publicly humiliate and discredit us. These deplorable tactics are
desperate attempts to unfairly gain market share by targeting merit
shop construction companies and their clients--regardless of the wishes
of their employees. In the construction industry, unions use bannering
to threaten or coerce merit shop contractors' clients into hiring
union-affiliated firms, or to force merit shop contractors to sign
neutrality agreements or become union signatories. If these objectives
fail--and they often do--they use bannering to try to put merit shop
competition out of business for good.
More Amicable Times
Lone Sun's experience with aggressive union bannering began almost
four years ago, but it is important to note that we have had
interactions with various divisions of the United Brotherhood of
Carpenters for more than two decades. Initially, the relationship was
professional and respectful, and involved the New Mexico District
Council of Carpenters. From time to time, a local organizer would come
out to Lone Sun jobsites to look around and ask employees why they were
working for a merit shop company. After these visits, we would
sometimes have discussions over coffee, where I would provide him with
information about Lone Sun's wage structure and benefits program, as
well as the community service we performed. In retrospect, I believe
the non-threatening nature of our initial relationship with the
carpenters was largely due to the fact that we lived and worked in the
same community. We felt a connection through our mutual goal of
positive future development in the area.
After a few years, however, the situation started to change. My
local union contact informed me that the District Council had decided
to bring in organizers from other parts of the country--specifically
Chicago and El Paso, Texas. I firmly believe the union felt it could
more effectively execute aggressive organizing efforts and corporate
campaigns if it utilized organizers that had not lived and worked in
our community.
Shift to Aggressive Tactics
Around 2004, when the District Council was folded into the Mountain
West Regional Council of Carpenters, they began sending letters to Lone
Sun's current and prospective clients stating the union had a ``labor
dispute'' with us, wrongly claiming we ``did not provide benefits'' to
our employees when we actually did (and still do). In fact, Lone Sun
offers an excellent benefits program that includes health and life
insurance, a public works pension plan and even a 401(k)--a rarity for
our industry's tradesmen and laborers.\1\ As a continued commitment to
our employees, we have steadily increased the amount we pay toward
their health care premiums--currently 85 percent--and we cover 100
percent of the premiums for our employees' life insurance. In addition,
we offer trade-specific certifications, first aid training,
Occupational Safety and Health Administration (OSHA) training and an
apprenticeship program.
---------------------------------------------------------------------------
\1\ Incidentally, Lone Sun's peers in the industry that are union
signatories have stated that their benefits programs have become less
solvent, with retirees being paid less as employer contributions are
rising. In the area controlled today by the Southwest Regional Council
of Carpenters, these contributions are scheduled to rise another .50
cents per hour by the end of 2011.
---------------------------------------------------------------------------
We responded to each of the union's letters with one of our own,
countering the claims and providing an overview of Lone Sun's benefits
program. In a preemptive move, we also provided letters and
documentation to the New Mexico Department of Workforce Solutions, the
governor of New Mexico, the lieutenant governor, state legislators, the
president of the University of New Mexico, as well as developers,
general contractors, owners, and trade and professional associations.
At the same time, the new union organizers began to show up at
jobsites claiming to be holding ``raffles'' in which employees were to
submit their names, addresses and telephone numbers in order to win.
Although none of the employees who signed up for the raffles ever won
anything, most said they were contacted by the union. Some employees
were even personally visited at their homes.
In May 2006, the union organizers contacted us and we agreed to a
meeting at our office.
During the meeting, I mentioned their letter campaign and the
raffles, and I once again reminded them about our benefits program, as
well as our respect for union tradesmen and contractors. I discussed my
friendships with other principal owners of union signatory contractors,
and our commitment to the industry as a whole and our community at
large. I told them I believed we should concentrate our efforts into
making things better for everyone. At the end of the meeting, they
remarked that they did not care for Lone Sun Builders, and would
continue to harass me and my employees.
The following year, the carpenters again reorganized into another
larger regional council--this time referred to as the Southwest
Regional Council of Carpenters. This group consolidated what originally
was a small group of locals, with approximately 2,500 members, into a
massive council in excess of 32,000 members. This allowed the
carpenters to export their corporate campaign and bannering tactics
from California, through Arizona and into New Mexico. Throughout the
next two years, the carpenters sent letters to owners, contractors and
developers stating they were engaged in a ``labor dispute'' with Lone
Sun, and that they would be pursuing an ``aggressive public information
campaign'' against us that would ``unfortunately impact all parties
associated with projects where they are employed.''
In 2008, the aggressive bannering started in earnest. The
carpenters recruited day laborers to hold large signs, stating, ``SHAME
ON'' the third party owners of businesses where Lone Sun performed
work. On some projects, the entities named on the banners had not even
hired us, or even the general contractor. In many cases, the owner or
developer hired the contractors, and the end user--the tenant--was
named on the banner. In all, Lone Sun was targeted with banners on
approximately a dozen projects in 2008.
In June 2009, the union organized a mass picket at a high-
visibility project in Santa Fe, New Mexico. The mass picket included
vulgar chants, physical threats, name calling and false statements,
including that Lone Sun paid employees in cash and did not provide
health benefits. After the mass picket in Santa Fe, the carpenters
duplicated the process at multiple sites, including a furniture outlet,
a church and the University of New Mexico's Tamarind Institute. At this
point, we knew we could not sit idly by and allow the unions to
pressure us and our clients any longer.
Fighting Back Legally and Ethically
Over the years our preferred response to the carpenters' actions
had been direct dialogue with their representatives--always accompanied
by explicit statements that the conversations were not to be construed
as bargaining discussions. However, once the union became extremely
aggressive, this method of communication failed. We attempted to
contact the Southwest Regional Council's headquarters in Los Angeles
multiple times, but they never responded. When members of the public
and state legislators were similarly unsuccessful, we learned that it
had become the union's procedure to not respond to inquiries into the
motivations behind their actions. From time to time, they would promise
to make a statement, but never did.
In 2009, we embarked on a campaign to protect our company's
integrity, and to educate as many professional organizations as
possible in and around Albuquerque about the true motivation behind the
carpenters' actions. We gave presentations to many local trade
associations, employer groups, schools and press outlets, resulting in
task forces, awareness materials and positive media coverage.
We visited many of the carpenters' bannering sites around the
area--regardless of whether Lone Sun was the target--and learned that
the day laborers were not even union members. Instead, the carpenters
used day laborers and paid them low wages, with no deductions or
benefits. We, of course, found it ironic that these individuals had
chosen to discredit a company with loyal employees who enjoy excellent
pay and benefits.
In 2009, we launched our blog, which chronicles Lone Sun's
experience with the carpenters' corporate campaign. We also created our
own banners, which read, ``LONE SUN BUILDERS--EMPLOYEE BENEFITS AND
GREAT WAGES,'' and ``SHAME ON THE CARPENTERS UNION--HONESTY AND
INTEGRITY ARE THE AMERICAN WAY--STOP THE LIES!'' We produced a brochure
that provided photos of the union's banners at local hospitals and
pharmacies, churches and schools, appealing to government officials and
the business community to take action. We held a ``silent''
demonstration and community breakfast for friends and colleagues (and
even welcomed the union picketers) at a local church where the
carpenters had disrupted a service.
I firmly believe our actions positively impacted public opinion in
New Mexico and helped Lone Sun Builders avoid complete financial and
professional ruin.
Aftermath
Despite the outpouring of support we received from our community,
and the successes of our own public education campaign, business has
suffered greatly. Many of the clients and building tenants that were
publically named on the union's banners also were impacted by the
negative publicity. In addition, just as the carpenters intended, our
general contractors became reluctant to utilize our services for fear
of the negative publicity and the organizers' aggressive and vulgar
presence. In all, we estimate that we have suffered a 20 percent to 30
percent decline in sales directly due to the negative impact of the
carpenters' corporate campaign. To date, prospective clients express
concerns about working with us--and in many instances they have opted
to go elsewhere for services.
Even though business has been negatively impacted, we continue to
promote our company and its skilled workforce, display our banners
touting our benefits program, and contribute charitably to our
surrounding community. In addition, Lone Sun's experience with union
corporate campaigns is extensive and we have become knowledgeable in
their tactics--and how to lawfully combat them.
The last few years have taught Lone Sun that as long as we remain
defiant and our employees express their unwillingness to organize, the
union will continue to do anything it can to destroy our company and
its reputation. The carpenters union has violated our property rights,
issued false claims, made vulgar and threatening remarks, and vowed to
put us out of business. To my disappointment, the National Labor
Relations Board (NLRB) has recently signaled it will give them cover
every step of the way.
The NLRB's Support of Corporate Campaigns and the Impact on Job
Creation
The NLRB's recent actions clearly demonstrate the agency has
abandoned its role as a neutral enforcer and arbiter of labor law in
order to promote the special interests of politically powerful unions.
These actions have negative implications for workers, consumers,
businesses and the economy, and will inevitably invite greater union
intimidation of employees, consumers and small businesses; trample
private property rights; reduce employee access to secret ballots; and
greatly limit the ability of U.S. businesses to quickly and flexibly
adjust to the demands of global competition and a changing economy.
The Board's September 2010 bannering decisions have been most
disappointing for Lone Sun. In these cases, the Board took steps to
protect this coercive practice, failing to apply longstanding laws
against secondary union activity intended to prohibit confrontational
conduct aimed at neutral parties, such as our clients.\2\ For decades,
the ranks of construction unions have been dwindling, which is
reflected in the fact that today, only 13 percent of construction
workers belong to a union.\3\ This statistic, which illustrates a clear
industry-wide choice not to organize, and leads unions to employ
bannering and other desperate, unethical tactics. The NLRB's decision
will no doubt embolden and encourage more unions to incorporate this
practice into their already aggressive and irresponsible corporate
campaign efforts.
---------------------------------------------------------------------------
\2\ In consolidated cases known as United Brotherhood of Carpenters
Local No. 1506 [355 NLRB No. 159 (2010)], the Board determined in a 3-2
split decision that bannering is protected speech under federal labor
law. In his dissent, Board Member Brian Hayes argued that bannering was
nothing more than ``stationary picketing,'' and should be considered
``secondary coercion,'' as originally intended by Congress in Section
8(b)(4)(ii) of the National Labor Relations Act.
\3\ U.S. Department of Labor, Bureau of Labor Statistics, Economic
News Release: Union Members Summary, Jan. 21, 2011; available at:
http://www.bls.gov/news.release/union2.nr0.htm.
---------------------------------------------------------------------------
The Board also has made it easier for construction unions to engage
in so-called ``salting'' abuse, in which they apply for work with merit
shop contractors without being genuinely interested in performing that
work, solely to provoke unfair labor practice charges and disrupt merit
shop workforces.\4\ Endorsing the hiring of individuals whose
motivation for seeking employment is the disruption of the workplace
runs directly contrary to the Obama administration's efforts to grow
our economy and improve working conditions for the American people.
---------------------------------------------------------------------------
\4\ See KenMor Electric Co.; 355 NLRB No. 173 (2010).
---------------------------------------------------------------------------
I understand the Board also is looking at whether employers can be
forced to allow non-employee union agents to trespass on their premises
for the purpose of harming their businesses if the employer has allowed
access to other non-employee individuals or groups that have no
intention of harming the business (such as the United Way or the Girl
Scouts).\5\ This decision will have an enormous impact on employers'
ability to shield customers, clients and employees from interference
and harassment by union agents.
---------------------------------------------------------------------------
\5\ See Roundy's vs. Milwaukee Building and Construction Trades
(Case No. 30-CA-17185).
---------------------------------------------------------------------------
In yet another recent case, the NLRB determined that threats of
violence made by pro-union employees were acceptable because those
threats did not meet the Board's vague, undefined standard of creating
a ``general atmosphere of fear and reprisal.\6\ Lone Sun's policy is to
not tolerate any threats of violence among our employees. It is
disturbing that the Board does not share my view.
---------------------------------------------------------------------------
\6\ See Mastec Direct TV; 356 NLRB No. 110 (2011).
---------------------------------------------------------------------------
Regrettably, the NLRB's actions have been wholly consistent with
the agenda set by the Obama administration, which has regularly put the
interests of its union supporters ahead of fiscal responsibility and
job growth. Through interpretations, regulations and executive orders,
the administration has repealed union transparency requirements and
consistently promoted union-backed policies, including flawed wage
mandates under the Davis-Bacon Act and discriminatory project labor
agreements (PLAs) on federal construction projects. The
administration's policies cost taxpayers billions of dollars,
negatively impact business opportunities for small businesses and limit
employment opportunities for workers. PLAs, for example, discriminate
against the vast majority (87 percent) of the construction workforce
that chooses not to join a union by denying them an opportunity to work
on federal projects.
The NLRB remains the main offender, as far as Lone Sun is
concerned. Just recently, the Board took unprecedented steps to mandate
where and how a company can operate and expand its business. As I'm
sure many of you would agree, the federal government has no right to
dictate where a company can or cannot create jobs or to prevent
companies from speaking about costs related to union actions.
Conclusion
The Obama administration and the NLRB continue to pursue a labor
agenda that stifles job creation and economic growth. With a current
unemployment rate of nearly 18 percent in our industry, there is simply
no place for corporate campaigns' disruptive and destructive
practices.\7\ It is unfortunate that the Board has chosen to turn the
clock back more than 60 years to a time when secondary boycotts
threatened to paralyze the industry and stifle job growth. Regardless
of the Board's behavior, ABC members like me will not be deterred from
their dedication to the merit shop philosophy.
---------------------------------------------------------------------------
\7\ U.S. Department of Labor, Bureau of Labor Statistics,
Construction Sector at a Glance: Employment, Unemployment, Layoffs, and
Openings, Hires, and Separations, April 2010; available at: http://
www.bls.gov/iag/tgs/iag23.htm.
---------------------------------------------------------------------------
On behalf of Lone Sun Builders and ABC, I'd like to again thank the
Education and the Workforce Committee for holding today's hearing. I am
pleased to see the Committee take a renewed interest in the problems
that corporate campaigns--bannering in particular--can cause for
honest, responsible contractors, and I look forward to working with you
on this issue. Mr. Chairman, this concludes my formal remarks. I am
prepared to answer any questions you may have.
______
------
Chairman Roe. Thank you, Mr. Karnas.
Ms. Fisk?
STATEMENT OF CATHERINE L. FISK, ESQ., LAW PROFESSOR, UNIVERSITY
OF CALIFORNIA IRVINE SCHOOL OF LAW
Ms. Fisk. My name is Catherine Fisk. I am the Chancellor's
Professor of Law at the University of California at Irvine.
Thank you for inviting me to testify today.
Corporations adopt codes of social responsibility for good
reasons, and unions play an important role in helping companies
adhere to their principles. A union corporate social
responsibility campaign is designed to provide information to
consumers, the public, and regulatory agencies about a
company's labor practices. Thus, corporate social
responsibility campaigns and union representation help protect
good jobs for all workers--a goal endorsed by the House
Committee on Education and Labor in 2007 in a pair of hearings
on strengthening America's middle class.
I will address two questions today: First, should the
National Labor Relations Board protect the rights of employees
and unions to publicize their concerns about labor practices?
And, second, is the NLRB appropriately exercising its statutory
power to enforce the Federal labor law? The answer to both
questions is ``yes.''
As to the first question, the First Amendment to the United
States Constitution protects the right to speak out on matters
of public concern, including a company's labor record.
Displaying banners and picketing is one way to do this.
Generally speaking, the National Labor Relations Board's
past efforts to prohibit peaceful bannering and street theater
have been rejected by the Federal courts. Quite rightly,
therefore, the NLRB has now concluded that peaceful bannering
and street theater cannot be prohibited by the National Labor
Relations Act.
In a number of cases in 2010, the Board exhaustively
canvassed the law on leafleting, banners, and picketing in
light of the Supreme Court's evolving First Amendment
jurisprudence. The Board quite reasonably concluded that the
display of a banner is closer to the leafleting protected by
the Supreme Court in the DeBartolo case than it is to the
picketing prohibited by the Supreme Court in the 1950 Teamsters
case.
The Board's decisions on banners are entirely reasonable.
As the Supreme Court has emphasized for decades, the National
Labor Relations Act gives the Board the responsibility to
regulate and protect both worker and employer speech in the
context of its labor relations setting.
The First Amendment does, however, allow the government to
prohibit threats. In deciding when a statement constitutes a
threat, the court has held that the NLRB should consider the
power employers have over employees who fear for their jobs.
Thus, Federal law can and does prohibit statements like,
``Sleep with me or you are fired,'' or, ``If you join a union
or if you go on strike, I will fire you or eliminate your
job.'' Thus, the Boeing case does not break new ground in the
law and is entirely consistent with a half-century of labor law
prohibiting employers from threatening to move or eliminate
jobs, or from actually doing so, in retaliation for employees
having exercised their statutory rights.
Moreover, the mere fact of a corporate campaign does not
coerce a company in violation of the Federal racketeering law.
Several Federal courts have rejected RICO challenges to union
efforts to organize through card check and neutrality
agreements.
Let me now turn to the second question: Is the NLRB
appropriately exercising its powers to interpret and enforce
the NLRA?
There is no basis for suggesting that the decision of the
acting general counsel to issue a complaint in Boeing and the
Board's request for amicus briefs in the Specialty Healthcare
case is evidence that the Board is somehow exceeding its
statutory authority.
While it is not unheard of for Members of Congress to
criticize the Board when its decisions on important matters of
labor law and policy are contrary to the Members' own
preferences, it is important not to allow criticism of past
decisions or concerns about the general direction of Board law
to become efforts to coerce or intimidate the Board into
resolving disputed issues of law and fact in pending cases.
As an independent agency that exercises powers to
adjudicate cases subject to deferential review in the United
States court of appeals, the NLRB is obligated by the National
Labor Relations Act to decide cases based on evidence adduced
in an evidentiary hearing. Due process, a constitutional right,
requires any entity that formally adjudicates cases based on
law and fact, including the NLRB and Federal and State trial
courts, to have a degree of independence from legislative
intervention.
The Board's recent decisions in the area of labor protests
are entirely consistent with the trend in the United States
Supreme Court's First Amendment jurisprudence. They are,
moreover, a reasonable agency response to the fact that the
agency's prior and less speech-protective approach to
leafleting, bannering, and other speech was inappropriate.
Whatever the views of the current congressional majority
about the trend in the NLRB's case law on labor protests or
other areas, there will be time enough for the losing party in
those cases to seek review in the Federal courts of appeals.
Congress should allow the Board to continue its work without
intervention.
Thank you.
[The statement of Ms. Fisk follows:]
Prepared Statement of Catherine L. Fisk, Chancellor's Professor of Law,
University of California, Irvine
My name is Catherine L. Fisk. Thank you for the opportunity to
testify before the House of Representatives Subcommittee on Health,
Employment, Labor and Pensions on the way in which the NLRB has
regulated corporate (also known as comprehensive or corporate social
responsibility) campaigns.
Since 2008, I have been the Chancellor's Professor of Law at the
School of Law, University of California, Irvine. Previously, I was the
Douglas Blount Maggs Professor of Law at Duke University School of Law,
where I taught from 2004 to 2008, and was on the faculty of a number of
other law schools since 1991. I am the co-author of a casebook, Labor
Law in the Contemporary Workplace (West Publishing Co. 2009), as well
as two other books on labor and employment law (Labor Law Stories
(Foundation Press 2005) and Working Knowledge: Employee Innovation and
the Rise of Corporate Intellectual Property (UNC Press 2009). I have
published dozens of articles on labor and employment law in leading law
reviews. I regularly teach Labor Law, Employment Law, Employment
Discrimination Law, and a course on the legal profession, and
previously have taught Civil Procedure, Legislation, and specialized
courses on the law of the workplace, labor markets, and employee
intellectual property. I am admitted to the bar in California and in
the District of Columbia (inactive in DC), and have briefed and/or
argued cases in state and federal trial and appellate courts.
I. The Benefits of Corporate Social Responsibility Campaigns in a Free
Society with a Market Economy
The topic of this hearing raises significant issues at the
intersection of labor law and the United States Constitution. A union
corporate social responsibility campaign is designed to provide
information to consumers, the public, and relevant regulatory agencies
about a company's labor practices, including its wages, health and
safety record, and environmental practices. Thus, at the heart of a
corporate social responsibility campaign is the right to speak on
matters of public concern and to petition government for the redress of
grievances. See James J. Brudney, Collateral Conflict: Employer Claims
of RICO Extortion Against Union Comprehensive Campaigns, 83 Southern
California L. Rev. 731, 733 (2010). Corporate social responsibility
campaigns are thus within the First Amendment's protections of freedom
of association and the right to petition government for the redress of
grievances, as well as freedom of verbal and written speech, including
the dissemination of handbills and other written texts, the use of hand
gestures, picketing, the display of placards and banners, symbolic
conduct, and the expenditure of money to support or oppose political
candidates and issues.
The Court's recent and strong protection for the First Amendment
rights of companies (Citizens United v. Fed. Election Comm'n, 130 S.
Ct. 876, 908 (2010), organizations (Boy Scouts of America v. Dale, 530
U.S. 640 (2000) (First Amendment protects right of Boy Scouts to
discriminate against gays)), and individuals (United States v. Stevens,
130 S. Ct. 1577 (2010) (individual right to create, possess and sell
offensive depictions of animals)) is based on a longstanding belief
that in a democratic society with a market economy, the best protection
for both liberty of conscience and robust economic growth lies in the
electorate, consumers, and citizens having access to a full range of
information on which to base their political, social and economic
choices. As the Court recently emphasized: ``The First Amendment
confirms the freedom to think for ourselves.'' Citizens United, 130 S.
Ct. at 908. Each of these decisions strikes some as wrong as a matter
of policy and constitutional interpretation, but for the moment they
are the law.
The purpose of corporate social responsibility campaigns is to
provide workers, consumers, and citizens with the information we need,
as the Court put it in Citizens United, ``to think for ourselves''
about which products to buy, which businesses to patronize, and where
to work. Corporations adopt codes of corporate responsibility for a
reason, and there is no basis to restrict the ability of workers and
their unions to hold companies to the policies and values they
announce. There is no evidence that providing workers and consumers
information about companies' labor practices and safety records has any
adverse effect on the economy. Indeed, to the extent that workers and
consumers are empowered by information to choose jobs and to patronize
businesses that pay good wages and have strong safety and environmental
records, the economy is strengthened. Elementary principles of
economics show that information facilitates efficient transactions,
prevents negative externalities, and prevents a race to the bottom in
which companies gain a competitive advantage by driving down wages and
externalizing the environmental or other safety costs of their
operations.
Corporate social responsibility campaigns are designed to
strengthen the middle class, a goal which the House Committee on
Education and Labor in the 100th Congress endorsed in a pair of
hearings on ``Strengthening America's Middle Class'' in 2007. See H.
Rep. No. 110-23, text accompanying notes 25-43 (2007). As the House
Report produced from those hearings found, the decline of unionization
and the associated decline in wages and rise in economic insecurity
have had devastating effects on the size and security of the American
middle class, even as corporate profits have soared. Id. Employees who
are paid well are more likely to have money to spend, which bolsters
the economy. Indeed, Congress specifically found when it enacted the
Wagner Act 1935, at the depth of the Great Depression, that promoting
the rights of workers to unionize would eliminate the bargaining and
wage inequality that ``tends to aggravate recurrent business
depressions, by depressing wage rates and the purchasing power of wage
earners in industry and by preventing the stabilization of competitive
wage rates and working conditions within and between industries.'' 29
U.S.C. Sec. 151. Employees with decent wages and benefits are more able
to pay taxes to support education and infrastructure. They are less
likely to depend on public assistance. Employees with decent wages and
benefits are more likely to have health care for themselves and their
children and are less likely to have to work two jobs. Decent wages
support strong families and strong communities. See Steven Greenhouse,
The Big Squeeze: Tough Times for the American Worker (2009).
Workers and their unions perform a valuable role when they
publicize the labor records of companies and urge those sympathetic to
their view to support their efforts to ensure that people work for good
wages in safe conditions. It is well known that unionized workplaces
are generally better paid. In 2010, the median usual weekly earnings of
full-time workers who are union members is $917, whereas for nonunion
workers it is $717. That is not a lot of money: it works out to $47,684
for a 52 workweek year, as compared to $37,284 for a nonunion worker,
but the difference could be huge for a family struggling to make ends
meet. Unionized workplaces are more likely to provide employee health
insurance. Unionized workplaces are more likely to provide defined
benefit pension plans, which (like Social Security benefits) provide a
more secure retirement by placing the risk of economic downturn on the
plan rather than on the individual. Union workers are more likely than
nonunion workers to enjoy freedom from wage discrimination based on
gender, race, or ethnicity. See U.S. Department of Labor, Bureau of
Labor Statistics, Union Members in 2010, Jan. 21, 2011; U.S. Department
of Labor, Bureau of Labor Statistics, National Compensation Survey:
Employee Benefits in Private Industry in the United States, March 2008,
August 2008.
II. The First Amendment and Worker Free Speech Rights
The First Amendment protects speech that most people value,
including the right of people and political candidates to speak on
political issues (Brown v. Hartilage, 456 U.S. 45 (1982) (political
candidate has a right to promise in an election campaign to work for a
lower salary)), the right to take out advertisements in newspapers
criticizing government officials for failing to protect civil rights
(New York Times v. Sullivan, 376 U.S. 254 (1964)), the right to display
flags, Stromberg v. California, 283 U.S. 359 (1931), and the rights of
both workers and employers to speak on issues relating to unionization,
wages, and working conditions, NLRB v. Gissel Packing Co., 395 U.S. 575
(1969). The First Amendment also protects speech that many appreciate
but some find problematic in some circumstances, such as the right of
companies to advertise. Central Hudson Gas v. Public Serv. Comm'n, 447
U.S. 557 (1980). And, in a free society, the First Amendment
necessarily also protects speech that many people find offensive,
including picketing at women's health clinics and military funerals,
Snyder v. Phelps, 131 S. Ct. 1207 (2011); Schenck v. Pro-Choice
Network, 519 U.S. 357 (1997); Madsen v. Women's Health Center, Inc.,
512 U.S. 753 (1994), the burning of crosses and flags, Texas v.
Johnson, 491 U.S. 397 (1989); United States v. Eichman, 496 U.S. 310,
318 (1990), and burning a cross on a person's lawn, RAV v. City of St.
Paul, 505 U.S. 377, 391 (1992).
A. The Contemporary First Amendment Protection for
Picketing and Protest
In recent years, the Court has made clear that picketing--including
displaying signs and people patrolling--is protected speech under the
First Amendment that enjoys the highest level of constitutional
protection when it addresses any matter of political, social or other
concern to the community. Thus, the Court upheld picketing at a
military funeral, Snyder v. Phelps, 131 S. Ct. 1207 (2011), and
picketing outside clinics that provide family planning services,
Schenck v. Pro-Choice Network, 519 U.S. 357 (1997); Madsen v. Women's
Health Center, Inc., 512 U.S. 753 (1994). Even offensive and
intimidating speech and symbolic conduct is protected by the First
Amendment. Snyder, 131 S. Ct. at 1216 (``The arguably `inappropriate or
controversial character of a statement is irrelevant to the question
whether it deals with a matter of public concern' '' and is thus
entitled to the highest level of First Amendment protection), quoting
Rankin v. McPherson, 483 U.S. 378, 387 (1987)).
The First Amendment protection generally means that government
cannot prohibit or regulate speech or symbolic conduct expressing a
political message based on content unless the regulation is narrowly
tailored to a compelling governmental interest. Turner Broadcasting
System, Inc. v. Federal Communications Comm'n, 520 U.S. 180 (1997). The
government can prohibit threats, Virginia v. Black, 538 U.S. 343
(2003), and can consider the coercive power employers have over
employees in deciding which employer statements to employees are
threats (``sleep with me or you're fired'' or ``if you join a union,
I'll fire you''). See NLRB v. Gissel Packing Co., 395 U.S. 575 (1969);
NLRB v. Exchange Parts Co., 375 U.S. 405 (1964). But saving the targets
of offensive speech from psychological or economic harm is usually not
a compelling governmental interest. Thus, the Court struck down
prohibitions on flag burning, Texas v. Johnson, 491 U.S. 397 (1989);
United States v. Eichman, 496 U.S. 310, 318 (1990), on burning a cross
on a person's lawn, RAV v. City of St. Paul, 505 U.S. 377, 391 (1992),
on shouting at women entering a medical clinic seeking family planning
services, Schenck, 519 U.S. 357; Madsen, 512 U.S. 753, and on picketing
at a military funeral blaming the soldier's death on God's vengeance
for American tolerance for gays and lesbians, Snyder, 131 S. Ct. 1207.
The Court has struck down prohibitions on picketing directed at
individuals in residential neighborhoods when the prohibition
discriminated on the basis of subject matter. Carey v. Brown, 447 U.S.
455, 465 (1980). Thus even when it is alleged that the picketing
infringes the rights of the targets of the protest by making it harder
for them to run their business without disruption, the Court has
rejected regulation.
B. The Older Rules Applicable to Labor Picketing
Given the robust contemporary First Amendment protection for
picketing and protest, the treatment of labor picketing is anomalous.
In International Brotherhood of Teamsters v. Vogt, the Court upheld a
state law prohibiting peaceful picketing by union members at a work
site because picketing ``involved more than just communication of ideas
* * * since it involves patrol of a particular locality and since the
very presence of a picket line may induce action of one kind or
another, quite irrespective of the nature of the ideas which are being
disseminated.'' 354 U.S. 284, 289 (1957). Since then, the Court has
upheld against constitutional challenge the application of federal
labor law to picketing encouraging a strike by employees other than
those employed by an entity with whom the picketing employees have a
labor dispute. NLRB v. Denver Building & Construction Trades Council,
341 U.S. 675 (1951). The implicit rationale of these cases is that
labor picketing is a uniquely persuasive form of speech that induces
union members to refuse to work regardless of their views on the merits
of the labor dispute. In upholding a prohibition on picketing calling
for a consumer boycott of a business if a successful boycott would
threaten the business with ruin or substantial financial loss, the
Court emphasized the harm that picketing can cause when consumers are
persuaded of the union's message. NLRB v. Retail Store Employees Union,
Local No. 1001 (Safeco Title Ins. Co.), 447 U.S. 607 (1980).
Under current First Amendment doctrine, these decisions are
difficult, if not impossible, to justify. In the first place, they
allow Congress to treat picketing engaged in by employees affiliated
with a labor union more harshly than other picketing. Today, such a
distinction would fail, inasmuch as the Court has struck down bans on
worksite picketing and worksite calls for consumer boycotts when
engaged in by civil rights activists. Police Department of the City of
Chicago v. Mosley, 408 U.S. 92 (1972); NAACP v. Claiborne Hardware Co.,
458 U.S. 886, 912 (1982). The Court recently affirmed that the First
Amendment prohibits differential regulation of speech depending on the
identity of the speaker: ``[T]he Government may commit a constitutional
wrong when by law it identifies certain preferred speakers. By taking
the right to speak from some and giving it to others, the Government
deprives the disadvantaged person or class of the right to use speech
to strive to establish worth, standing, and respect for the speaker's
voice. The Government may not by these means deprive the public of the
right and privilege to determine for itself what speech and speakers
are worthy of consideration.'' Citizens United v. Fed. Election Comm'n,
130 S. Ct. 876, 899 (2010). Second, the old labor picketing cases allow
government to proscribe speech based on its content: picketing
requesting workers to withhold their labor is prohibited; picketing
urging workers to work or requesting consumers to withhold their
patronage is not. Today, of course, this sort of content-based or
viewpoint-based regulation is unconstitutional, as content-based
restrictions are invalid unless strict scrutiny is met. Mosley, 408
U.S. 92; Carey, 447 U.S. 455. Finally, the notion that labor picketing
can be prohibited because it is so persuasive to workers and consumers
sympathetic to labor's causes is simply impossible to square with the
rest of free speech jurisprudence, which does not allow government to
prohibit speech simply because some find it persuasive.
The anomalous treatment of labor picketing can be understood as an
historical artifact when we recall that the Supreme Court developed the
law of labor picketing before it developed its modern robust
protections for picketing and other forms of symbolic speech. Thus, it
made sense to the Court in the 1950s to hold that picketing was not
pure speech because it involves conduct (walking). Although there was
some judicial protection for symbolic speech before 1950, it was not
until the late 1960s that the Court clearly articulated a test for
First Amendment protection for symbolic speech and increased the
constitutional protection for it. Once the Court expanded First
Amendment protection for symbolic conduct in the 1960s and 1970s,
United States v. O'Brien, 391 U.S. 367 (1968) (burning draft cards);
Spence v. Washington, 418 U.S. 405 (1974) (hanging a United States flag
upside down with a peace symbol affixed to it), the differential
treatment of labor picketing lost its conceptual moorings.
As First Amendment protection for picketing by civil rights and
other groups has expanded in recent decades, the Court has begun to
accord greater First Amendment protection to non-picketing labor
protest. In essence, the Court distinguishes between labor picketing
(still subject to the old cases) and other forms of peaceful labor
protest, which enjoys constitutional protection more akin to that
enjoyed by civil rights and other protest. Thus, the Court held that
labor handbilling at a work site is not prohibited by federal labor
law. DeBartolo Corp. v. Florida Gulf Coast Trades Council, 485 U.S. 568
(1987). The Court reasoned that the distribution of handbills is
``expressive activity'' and that ``legislative proscription of such
leaflets would pose a substantial issue of validity under the First
Amendment.'' 485 U.S. at 576. Similarly, in holding that the NLRA does
not prohibit picketing urging a consumer boycott of a product, the
Court reasoned that its construction of the statute ``reflect[s]
concern that a broad ban against peaceful picketing might collide with
the guarantees of the First Amendment.'' NLRB v. Fruit and Vegetable
Packers, Local 760 (Tree Fruits), 377 U.S. 58, 63 (1964). Similarly,
the Court has read the federal labor laws to protect the rights of
employees to distribute newsletters and leaflets in the workplace
urging workers to support legislation and political candidates
protective of workers' rights. Eastex, Inc. v. NLRB, 437 U.S. 556
(1978).
In attempting to reconcile the older cases upholding regulation of
labor picketing with recent cases affording expansive protection for
picketing, handbilling, and other forms of verbal and symbolic speech,
the Court has emphasized that the federal labor laws strike a
``delicate balance between union freedom of expression and the ability
of neutral employers, employees, and consumers to remain free from
coerced participation in industrial strife.'' NAACP v. Claiborne
Hardware Co., 458 U.S. 886, 912 (1982). The NLRB is obligated to
construe the NLRA so as to maintain that delicate balance in the facts
of each case. Its decisions are entitled to deference if the factual
determinations are supported by substantial evidence on the record as a
whole, its interpretation of the statute is rational, and ``its
explication is not inadequate, irrational, or arbitrary.'' 29 U.S.C.
Sec. 159(e); Allentown Mack Sales and Serv., Inc. v. NLRB, 522 U.S.
359, 364 (1999).
The continuing vitality of the Supreme Court's labor picketing
cases may be doubtful given the Court's expansive protection for
picketing on myriad other topics, including issues pertaining to fair
treatment at work. Police Department of the City of Chicago v. Mosley,
408 U.S. 92 (1972). Nevertheless, the law of labor picketing and
protest draws two crucial distinctions: (1) whether the speech is
picketing or is instead handbilling, or other comparably expressive and
non-coercive communication, and (2) whether the speech is at a worksite
and is directed at workers or whether it is directed at consumers or
the public. The law with respect to two categories of labor speech is
settled under Supreme Court law: picketing directed at workers can be
regulated, and handbilling directed at consumers cannot. DeBartolo
Corp. v. Florida Gulf Coast Trades Council, 485 U.S. 568 (1987). The
Supreme Court has not addressed the outer limits of regulation of labor
picketing directed only or primarily at the public, nor has it
addressed the constitutional permissibility of prohibiting non-
picketing speech directed only or primarily at workers, at least when
the speech occurs at the worksite and when it does not call for an
immediate work stoppage.
This leaves two categories of labor protest of uncertain status:
peaceful picketing directed at the public (which is generally protected
by the statute, but whose constitutional status has not been addressed)
and dissemination of leaflets, display of banners, and other comparable
forms of pure speech or non-coercive conduct directed at workers
(which, similarly, is generally protected by the statute but whose
constitutional status has not been addressed by the Court). It is these
two categories of speech that the Board has recently held entitled to
First Amendment protection.
C. The Lower Court and NLRB Approaches to Labor Protest
In the absence of Supreme Court precedent, the NLRB and the federal
courts of appeals have reached an array of conclusions on the statutory
and constitutional protection for picketing directed at the public and
leafleting and other non-coercive protest directed at workers. Although
the cases are not entirely consistent, overall they have found
protection for such expression. Three types of protest activity have
drawn the most litigation: display of banners; distribution of
handbills; and various forms of street theater, including the
appearance at a worksite of employees dressed up in rat costumes and
the staging of mock funerals. As will be explained below, generally
speaking the NLRB's past efforts to prohibit peaceful bannering and
street theater have been rejected by the federal courts. It is entirely
appropriate--indeed, it is explicitly contemplated by the statutory
scheme--that the Board has now concluded that peaceful bannering and
street theater cannot be prohibited by the NLRA.
1. BANNERS AND LEAFLETS
The courts of appeals have held that the display of a banner may
not be prohibited by the NLRA unless the message on the banner would
lead consumers and passersby to conclude that the worksite is dangerous
or unhealthful. In Overstreet v. United Brotherhood of Carpenters, 409
F.3d 1199 (9th Cir. 2005), on public sidewalks some distance from
retailers that contracted with contractors using non-union labor and
paying low wages, the Carpenters Union displayed banners reading
``Shame on [name of retailer]'' in large letters, with the words
``Labor Dispute'' in smaller letters underneath. The NLRB General
Counsel issued a complaint against the Carpenters Union and sought an
injunction against the activity under section 10(l) of the NLRA. The
court of appeals rejected the General Counsel's interpretation of the
statute and held that the bannering was protected by the First
Amendment and could not be equated with signal picketing prohibited
under the Supreme Court's labor picketing jurisprudence. The court
explained:
[T]he reliance on the physical presence of speakers in the vicinity
of the individuals they seek to persuade * * * is no basis for lowering
the shield of the First Amendment or turning communication into
statutory ``coercion.''
Nor are the union members' activities ``coercive'' for any reason
other than their physical presence. The union members simply stood by
their banners, acting as human signposts. Just as members of the public
can ``avert [their] eyes'' from billboards or movie screens visible
from the public street, they could ignore the Carpenters and the
union's banners. If anything, the Carpenters' behavior involved less
potential for ``coercing the public than the handbilling in DeBartolo,
as there was no one-on-one physical interaction or communication.'' 409
F.3d at 1214.
When the message on the banner would lead consumers to conclude
that the targeted business is dangerous or unhealthful (as where the
union displayed a banner saying ``This Medical Facility is Full of
Rats''), a divided panel of the Ninth Circuit, over the dissent of
Judge Kozinski, held the banner was defamatory. San Antonio Community
Hospital v. Southern California District Council of Carpenters, 125
F.3d 1230 (9th Cir. 1997). Distinguishing other cases in which unions
had referred to employers as ``rats'' on the ground that the audience
would know that rat is a slang term of art for an employer paying
substandard wages, the court found that passersby might think that the
hospital in this case had a rodent problem. Id. at 1235. Alternatively,
if a union distributes handbills to workers (rather than to consumers
and the public) and a work stoppage immediately ensues, a divided panel
of the D.C. Circuit held that the handbilling was tantamount to
picketing urging a strike and could be prohibited. Warshawsky & Co. v.
NLRB, 182 F.3d 948 (D.C. Cir. 1999).
2. STREET THEATER AND THE RAT
In labor disputes across the country, workers and their unions have
engaged in a variety of forms of street theater as protest. In a few
cases, workers staged a mock funeral accompanied by signs proclaiming
that patronizing the target business ``should not be a grave
decision.'' Sheet Metal Workers' International Association, Local 15 v.
NLRB, 491 F.3d 429 (D.C. Cir. 2007); Kentov v. Sheet Metal Workers,
Local 15, 418 F.3d 1259 (11th Cir. 2005). In another few cases,
employees dressed up in rat costumes and strolled around public
sidewalks near job sites with leaflets complaining that targeted
businesses were rats because they paid substandard wages. Construction
& General Laborers Local Union 4 (Quality Restorations), Case 13-CC-
2006, Advice Memorandum (January 19, 1996) (individual dressed as a rat
who patrolled in front of association confronted customers or employees
and thus was not engaged in protected free speech). Northern California
Regional Council of Carpenters, Cases 32-CC-1469-1; 32-CC-1480-1; 32-
CC-1482-1; 32-CC-1483-1; 32-CB-5451-1, Advice Memorandum (October 31,
2002) (person in rat costume who patrolled in front of employer
premises was confrontational and coerced employers and thus violated
section 8(b)).
At least one protest involved inflating a 16-foot-tall balloon in
the shape of a cartoon rat. Sheet Metal Workers' Int'l Assn, 491 F.3d
at 432. In other cases, janitors have conducted sing-alongs on the
sidewalk outside of commercial office buildings or paraded around with
mops and brooms. Service Employees Union Local 87, 312 NLRB 715 (1993).
And in at least one instance which appears never to have resulted in a
published agency or judicial decision, hotel room cleaners supported
their demand for better wages by wheeling a bed onto a public sidewalk
outside a hotel and demonstrated the physically arduous labor of
changing the sheets on hotel beds.
There have been only a few court of appeals decisions on the
permissibility of worker street theater, and they have reached
conflicting conclusions. The D.C. Circuit, in an extensive and
scholarly opinion by Chief Judge Douglas Ginsburg, held that the mock
funeral could not constitutionally be prohibited, Sheet Metal Workers'
Int'l Assn, 491 F.3d at 439. The Eleventh Circuit, in an opinion by
Judge Kravitch, held that the mock funeral was more like picketing than
it was like leafleting and thus could be prohibited. Kentov, 418 F.3d
at 1266. Because review may be had in the D.C. Circuit in any case
decided by the NLRB, 29 U.S.C. Sec. 159(f), it is not unreasonable for
the Board to follow the D.C. Circuit's guidance and hold that banners
and street theater cannot constitutionally be prohibited under section
8(b).
The NLRB's recent efforts to reconcile its own jurisprudence on the
distinction between picketing, leafleting, bannering, and street
theater are entirely reasonable. In Eliason & Knuth, 355 NLRB No. 159
(2010), the Board exhaustively canvassed the Supreme Court's and its
own prior treatment of picketing and other labor protest in light of
the Court's historical and evolving First Amendment treatment of the
various forms of symbolic speech. The Board quite reasonably concluded
that the display of a banner is closer to the leafleting protected by
the Court in DeBartolo than to the picketing prohibited in Vogt and its
progeny. See also Carpenters Local Union No. 1506 (Marriott), 255 NLRB
No. 219 (2010) (following Eliason & Knuth). The Board concluded in
Southwest Regional Council of Carpenters, 356 NLRB No. 88 (2011), that
the display of banners is not prohibited by the statute even if the
banners are at construction sites rather than at places frequented by
the general public. The Board concluded that the bannering cannot be
prohibited in the absence of evidence that the display of a banner is
intended as a covert signal to engage in an illegal secondary work
stoppage (as might be the case if the employees picket) rather than as
an effort to persuade workers, consumers, and other friends of labor
about the harm caused by the employers paying substandard wages.
These recent efforts to reconcile the First Amendment rights of
workers to publicize the nature of their labor dispute with the Supreme
Court's treatment of labor picketing are entirely reasonable. As the
Supreme Court has emphasized for decades, the National Labor Relations
Act gives the Board the responsibility to regulate and protect both
worker and employer speech ``in the context of its labor relations
setting.'' NLRB v. Gissel Packing Co., 395 U.S. 575 (1969). See also
NLRB v. Exchange Parts Co., 375 U.S. 405 (1964). In both Gissel and
Exchange Parts the Court deferred to the Board's determination of
whether particular speech was protected or prohibited by the NLRA. The
Board has for 75 years attempted to decide, based on the evidence in
cases and its expertise in labor relations, which speech by employees
and by employers should be protected by the NLRA, prohibited by the
NLRA, or left unregulated. Given that the weight of court of appeals
decisions have rejected the Board's previous efforts to prohibit
peaceful dissemination of leaflets or display of banners, as discussed
above, and given the Supreme Court's recent unequivocal First Amendment
protection for picketing and other protest, the Board reasonably has
concluded that bannering and leafleting are not prohibited by section
8(b) of the NLRA. The Board would also be reasonable to conclude that
other forms of symbolic speech, including street theater such as the
rat and mock funerals, cannot be proscribed unless the conduct blocks
ingress or egress to the property or contains false and defamatory
statements. Indeed, given the Supreme Court's recent 8-1 decision in
Snyder v. Phelps upholding offensive picketing at military funerals,
the Board's prior jurisprudence allowing extensive prohibitions of
worker protest based on its content and even its viewpoint is
constitutionally suspect. Thus, the Board is well within its broad
statutory authority to interpret the NLRA in light of workplace
realities and to develop a labor policy that grants robust protection
to worker speech. Indeed, its decisions in this area are all but
compelled by the protection courts of appeals and the Supreme Court
have granted to non-picketing labor protest.
D. Corporate Social Responsibility Campaigns Do Not Violate
RICO
The title of this hearing suggests possible concern about whether
union corporate social responsibility campaigns are desirable as a
matter of policy or permissible as a matter of law. Inasmuch as they
are designed to enforce workers' statutory rights to unionize and to
inform consumers and workers about a company's labor, safety, and
environmental practices, they are good policy. Whatever one's views
about their desirability as a matter of policy, however, there is no
basis in law for an outright prohibition. As noted above, to the extent
that a corporate social responsibility campaign involves publicity
about a company's labor, safety, or environmental record, it is
protected by the First Amendment. To the extent that it involves
invoking regulatory proceedings or litigation challenging the legality
of particular practices, the usual rules governing meritorious
litigation apply. But to the extent that the argument is that the mere
fact of a corporate campaign, including an effort to secure recognition
through card-check and a neutrality agreement, coerces a company, the
law is on the unions' side. To date, several federal courts have
rejected RICO challenges to union efforts to organize through card
check and neutrality agreements. Cintas Corp. v. UNITE HERE, 601 F.
Supp. 2d 571 (S.D.N.Y.), aff'd, 355 F. App'x 508 (2d Cir. 2009);
Wackenhut Corp. v. Service Employees Int'l Union, 593 F. Supp. 2d 1289
(S.D. Fla. 2009). See generally Brudney, supra, 83 S. Cal. L. Rev. 731.
III. Congress Should Not Interfere With the NLRB's Adjudication of
Pending Cases
It appears from the public commentary of some Members of Congress
that some of the NLRB's recent decisions on labor protest and other
topics, along with the decision of the Acting General Counsel to issue
a complaint one case, have caused consternation. While it is not
unheard of for Members of Congress to criticize the Board when its
decisions on important matters of labor law and policy are contrary to
the Members' own preferences, it is important not to allow criticism of
past decisions or concerns about the general direction of Board law to
become efforts to coerce or intimidate the Board into resolving
disputed issues of fact in pending cases. There is no basis for
suggesting that the decision of the Acting General Counsel to issue a
complaint in one case and the Board's request for amicus briefs in
another is evidence that the Board is somehow exceeding its statutory
authority. Specialty Healthcare and Rehabilitation Center of Mobile and
United Steelworkers, District 9, 15-RC-8773, and Boeing and
International Ass'n of Machinists District Lodge 751, 19-CA-32431.
As an independent agency that exercises powers to adjudicate cases
subject to deferential review from the courts of appeals under the
substantial evidence standard, Universal Camera Corp. v. NLRB, 340 U.S.
474 (1962), the NLRB is obligated by the National Labor Relations Act
to decide cases based on evidence adduced in an adversary hearing. Its
adjudicatory processes are relatively formal as compared to those of
many agencies. It acts in the place of a United States District Court
in enforcing the statutory rights of individuals and entities. Like any
entity that adjudicates cases based on law and fact, including federal
and state trial courts, principles of separation of powers and due
process necessitate a degree of independence from legislative oversight
as the agency carries out its adjudicatory role.
Although a number of federal court decisions have addressed the
propriety of Congressional interference in agency processes, the most
closely on point is Pillsbury Co. v. Federal Trade Commission, 354 F.2d
952 (5th Cir. 1966). In Pillsbury, a Senate subcommittee interrogated
the Chair of the FTC and members of his staff regarding a pending case
and expressed views on how it should be decided. After the FTC later
decided the case along the lines suggested by the Senators, the court
of appeals found the Senate inquiry to be improper and to have
infringed the due process rights of the litigants to a ``fair trial''
and to be free from the ``appearance of impartiality.'' Id. at 964. The
court of appeals said that when a congressional investigation ``focuses
directly and substantially upon the mental decisional processes of a
Commission in a case which is pending before it, Congress is no longer
intervening in the agency's legislative function, but rather, in its
judicial function.'' Id. Accord: Koniag v. Andrus, 580 F.2d 601, 610
(D.C. Cir. 1978) (holding that a letter sent from a chair of a House
committee to the Secretary of Interior regarding the Secretary's review
of decisions of the Bureau of Indian Affairs created the appearance of
a compromise of the Secretary's impartiality and remanding to the new
Secretary of the Interior for a fair and dispassionate treatment of the
matter).
Later cases that have rejected challenges to Congressional
interference in agency processes have emphasized that the interference
did not express a view on the merits but was instead intended only to
expedite the decision, Gulf Oil Corp. v. Federal Power Commission, 563
F.2d 588 (3d Cir. 1977), or that there was no evidence that the
intervention had an effect on the agency's decision, ATX, Inc. v. U.S.
Dep't of Transp., 41 F.3d 1522, 1529-30 (D.C. Cir. 1994); State of
California v. Federal Energy Regulatory Comm'n, 966 F.2d 1541, 1552
(9th Cir. 1992), or that the agency proceeding was informal, United
States ex rel. Parco v. Morris, 426 F. Supp. 976 (E.D. Pa. 1977). See
generally Morton Rosenberg & Jack H. Maskell, Congressional Research
Serv., RL 32113, Congressional Intervention in the Administrative
Process: Legal and Ethical Considerations (2003).
Conclusion
The Board's recent decisions in the area of labor protest are
entirely consistent with the trend in the United States Supreme Court's
First Amendment jurisprudence. They are, moreover, a reasonable agency
response to the fact that the agency's prior and less speech-protective
approach to leafleting, street theater, and other non-picketing protest
met with hostility from several federal courts. Wholly apart from the
question whether the recent cases upholding worker protest rights are
compelled by the First Amendment, there is no evidence that robust
protection for employee speech has any adverse effect on job creation
or the health of the American economy, and there is some evidence
suggesting that it helps both the economy and the polity by enabling
consumers and workers make informed decisions to support companies that
adopt responsible labor and environmental practices that are consistent
with the consumers' and workers' values.
Whatever the views of the current Congressional majority about the
trend of the NLRB's case law on labor protest or other areas, there
will be time enough for the losing party in those cases to seek review
in the federal courts of appeals and for Members of Congress to call
hearings to criticize the decisions later. To interfere with the
Board's adjudication of pending cases jeopardizes the due process
rights of all the parties to the case and casts doubt on the ability of
the administrative state to fairly adjudicate the statutory and
constitutional rights of the parties that appear before it.
______
Chairman Roe. Thank you, Ms. Fisk.
And Mr. Fritts?
STATEMENT OF JONATHAN C. FRITTS, ESQ., PARTNER, MORGAN, LEWIS &
BOCKIUS
Mr. Fritts. Chairman Roe, Ranking Member Andrews, members
of the subcommittee, thank you for inviting me to testify
today. I am honored to appear before you.
I am a partner in the law firm of Morgan, Lewis & Bockius.
I represent employers in many industries regulated by the
National Labor Relations Act.
The act serves an important function in our national
economy. Its primary purpose is to encourage unions and
employers to resolve their disputes peacefully through the
collective bargaining process. The act protects the right of
employees to strike and the right of employers to lock out, but
the act does not assume that the parties will be engaged in a
constant state of industrial warfare. To the contrary, the act
assumes that the threat of a strike or lockout will provide a
strong incentive for the parties to resolve their disputes at
the bargaining table. Once the parties reach an agreement, the
act assumes that there will be labor peace during the term of
the agreement.
This system of collective bargaining was designed at a time
when the strike was the primary weapon used by labor to exert
pressure on an employer. What has changed in recent years is
that unions increasingly believe that the strike is an
ineffective weapon, so they are abandoning it in favor of the
corporate campaign.
Whereas the act carefully regulates the right to strike,
corporate campaigns are difficult to regulate because they
involve conduct that is arguably protected by the First
Amendment. Strikes also differ from corporate campaigns in that
a strike necessarily entails a loss of pay for the striking
employees, which creates an incentive to resolve their dispute
as quickly as possible. In contrast, corporate campaigns result
in little or no economic harm to the employees, which means
that the union can engage in a prolonged campaign without any
real pressure from the employees to resolve the dispute.
Before I discuss some recent NLRB decisions that involve
corporate campaign tactics, I want to express my respect for
the Board and its many employees who have dedicated their
careers to administering the act. The issues presented to the
Board often do not have easy answers, and there are multiple
interests at stake. The interests of employees, unions, and
employers are often in conflict, but a balance must be reached.
It is said that people who work in labor relations are doing
their job well when everyone is angry with them. I think that
saying holds true for the Board.
Employers seem to be more upset with the Board these days
than unions or employees. The Board has issued a number of
decisions that provide additional weapons for unions and
employees to use against their employer in a corporate
campaign.
One of these cases holds that unions have the right to
display large banners calling for a boycott of a secondary
employer without violating the act's secondary boycott
provisions. Another case held that employees of AT&T had the
right to wear T-shirts that said ``inmate'' on the front and
``prisoner of AT&T'' on the back while they were on the job and
visiting AT&T's customers in their homes. And another recent
case held that off-duty employees of a restaurant located in a
hotel had the right to distribute handbills to hotel customers
while on hotel property.
There has been a lot of publicity surrounding the acting
general counsel's decision to prosecute a complaint against
Boeing based on its decision to locate some additional 787
assembly work in South Carolina rather than at its union-
represented facilities in Washington State and Oregon.
What is remarkable to me about the Boeing case is that the
acting general counsel found that Boeing satisfied its duty to
bargain with the machinists' union over the decision to locate
this work in South Carolina. The Board found that the union had
waived its right to bargain on the issue in its collective
bargaining agreement with Boeing.
In my view, the prosecution of the Boeing case does not
advance the core purpose of the act, which is to promote
industrial peace through the process of collective bargaining.
The Boeing dispute arguably was resolved at the bargaining
table when the union recognized Boeing's right to determine the
location where the work will be performed. Instead, the dispute
has exploded into an intense public relations campaign as a
result of the acting general counsel's prosecution.
Because Board litigation often takes years to resolve, the
dispute is not likely to end anytime soon. This is an
unfortunate outcome for all parties, regardless of who
ultimately prevails in the litigation.
This concludes my prepared testimony. Thank you.
[The statement of Mr. Fritts follows:]
Prepared Statement of Jonathan C. Fritts, Partner,
Morgan, Lewis & Bockius LLP
Chairman Roe, Ranking Member Andrews, and Members of the
Subcommittee, thank you for your invitation to participate in this
hearing. I am honored to appear before you today.
By way of introduction, I am a partner in the law firm of Morgan,
Lewis & Bockius LLP, where I represent employers in many industries
under the National Labor Relations Act, including manufacturing,
construction, maritime, retail food, and higher education. I am also an
Adjunct Professor at Georgetown University Law Center, where I co-teach
a course on labor law with a retired chief counsel of the National
Labor Relations Board. Beginning in September 2011, I will serve as the
management co-chair of the American Bar Association's Committee on
Practice and Procedure under the National Labor Relations Act.\1\
In my testimony today, I will describe the phenomenon of union
corporate campaigns and how they relate to the structure and policies
of the National Labor Relations Act (NLRA or Act).\2\ I will also
discuss recent National Labor Relations Board (NLRB or Board) cases
that relate to union corporate campaign tactics and what effect those
cases have on employers that are the target of a corporate campaign.
Finally, I will address the Boeing case and its relevance to the
subject matter of this hearing.
What Is a Corporate Campaign?
One of the most frequently cited definitions of a corporate
campaign is attributed to the current President of the AFL-CIO, Richard
L. Trumka:
Corporate campaigns swarm the target employer from every angle,
great and small, with an eye toward inflicting upon the employer the
death of a thousand cuts rather than a single blow.\3\
Unions engage in corporate campaigns as an alternative to calling a
strike as a means of applying pressure on employers. This is because
unions increasingly believe that the strike is an ineffective weapon of
industrial warfare.\4\ A strike necessarily entails a loss of pay for
the striking employees, which tends to have a mitigating effect on the
duration of the labor dispute. Because both parties (the employer and
the union-represented employees) suffer economic consequences during a
strike, there is an incentive on both sides of the table to resolve the
labor dispute as quickly as possible.
During a corporate campaign, however, employees generally continue
to work and receive pay. Therefore, employees suffer little or no
economic harm as a result of the union's campaign against their
employer. This means that a union can wage a prolonged corporate
campaign without any real pressure from the employees to resolve the
underlying dispute. Consequently, the dispute may persist for as long
as the employer is willing to resist the union's demands and absorb the
economic damage caused by the campaign.
Corporate campaigns are used in various types of labor disputes.
They are used during an organizing campaign in order to pressure an
employer to remain neutral during the campaign and to recognize the
union without an election. They also can be used as a means of creating
leverage for the union in the context of negotiating a collective
bargaining agreement on behalf of a group of employees that the union
already represents.
The target of the corporate campaign may not be the employer with
which the union has a labor dispute. For instance, the union may engage
in corporate campaign tactics against the employer's customers,
suppliers, lenders, creditors, or investors as a means of creating
secondary pressure against the employer.\5\
The types of tactics employed in a corporate campaign vary widely,
and are limited only by the union's imagination. They typically involve
efforts to generate negative publicity for the employer though print,
radio, or television advertisements or the display of billboards,
banners, or inflatable rats. The union may coordinate these public
relations activities with civic or religious leaders, politicians, or
public interest groups. Corporate campaigns can involve calls for
boycotts of the employer's products, including through picketing,
handbilling, or demonstrations at stores or other retail outlets. The
union also may seek to apply personal pressure against the
corporation's officers and directors, through picketing or
demonstrations at their residences or at social events.
Corporate campaigns may involve other forms of pressure that have
no apparent connection to the labor dispute. For instance, the union
may lobby legislators or regulators to withhold government contracts,
to block zoning approvals, or to deny public financing to the employer
that is the target of the corporate campaign. The union also may file
charges or initiate legal action under a variety of state or federal
laws, such as environmental laws, securities laws, or employment laws.
These claims or charges may then be withdrawn as soon as the labor
dispute is resolved.
Does Federal Labor Law Regulate Corporate Campaign Tactics?
Corporate campaigns must be understood in the context of the
structure and policy of the NLRA. The basic policy objective of the Act
is to promote industrial peace through the process of collective
bargaining.\6\ Somewhat paradoxically, the right to strike (and the
employer's corresponding right to lockout) promotes industrial peace by
creating an incentive for the parties to negotiate and resolve their
differences at the bargaining table.\7\ In most cases, the parties do
not engage in a strike or a lockout, but instead decide to enter into
an agreement that reflects each side's actual or perceived economic
leverage.
Once the parties have entered into a collective bargaining
agreement, the Act assumes that there will be labor peace during the
term of the agreement. Section 8(d) of the Act prohibits the parties
from engaging in a strike or lockout until at least 60 days after they
have provided written notice of their desire to negotiate a new
agreement.\8\ In addition, the party seeking to modify the agreement is
obligated to notify the Federal Mediation and Conciliation Service and
any equivalent state agency, so that these agencies may help the
parties resolve their negotiations peacefully.\9\
To further ensure industrial peace during the term of a collective
bargaining agreement, Congress enacted Section 301 of the Labor
Management Relations Act, which creates a federal cause of action to
enforce the terms of the collective bargaining agreement, including the
duty to resolve disputes through arbitration.\10\ The legislative
history of Section 301 clearly reflects Congress's expectation that
employers should be able to run their businesses without the threat of
economic warfare during the term of a collective bargaining agreement:
The chief advantage which an employer can reasonably expect from a
collective labor agreement is assurance of uninterrupted operation
during the term of the agreement. Without some effective method of
assuring freedom from economic warfare for the term of the agreement,
there is little reason why an employer would desire to sign such a
contract.\11\
Corporate campaigns are designed to ``sidestep the labor laws'' by
creating new forms of economic warfare as an alternative to the
carefully regulated right to strike, either during or after the term of
a collective bargaining agreement.\12\ There is no provision of the
NLRA that regulates ``corporate campaigns.'' To the contrary, unions
typically employ corporate campaign tactics that cannot be regulated
because they fall within the arguable scope of First Amendment speech
or petitioning activity.\13\ Thus, while a corporate campaign may have
a destructive impact on an employer's business, the employer is largely
without a remedy to counteract the union's campaign.
Recent NLRB Cases That Relate to Union Corporate Campaign Tactics
Some recent NLRB decisions provide additional weapons for unions to
use in a corporate campaign. For instance, the Board recently decided
that a union's display of large (3 to 4 feet high and 15 to 20 feet
wide) stationary banners, calling for a boycott of a neutral employer's
business, did not violate the Act's secondary boycott provisions.\14\
The Board held that the display of these banners outside the secondary
employer's facility did not ``coerce'' the secondary employer and
therefore did not constitute an unlawful secondary boycott under the
Act.
As a result of this decision, unions are more likely to utilize
large banners in a corporate campaign. Banners such as these typically
are not directed against the employer with which the union has a labor
dispute. Instead, they are used to pressure companies that do business
with the target employer. Displaying a large, and often provocative,
banner may be as effective, if not more effective, than traditional
picketing, which is regulated by the Act's secondary boycott
provisions. By holding that banners, unlike picketing, constitute non-
coercive speech, the Board has effectively exempted these types of
banners from regulation under the Act.
In another recent case,\15\ the Board held that AT&T could not
prohibit employees from wearing, while on the job and visiting
customers in their homes, t-shirts that said ``INMATE #'' on the front
and ``PRISONER OF AT$T'' on the back. The Board dismissed the
employer's concern that customers would be disturbed by an employee
arriving at their home wearing this t-shirt. The Board found that the
``totality of the circumstances would make it clear that the technician
was one of [AT&T's] employees and not a convict.'' \16\ Member Hayes
dissented, arguing that the Board majority ``failed to give sufficient
weight to the potential for employees wearing these shirts to frighten
customers in their own homes and thereby to cause substantial damage to
[AT&T's] reputation.'' \17\
The AT&T case demonstrates that the current Board will allow unions
and employees to engage in corporate campaign tactics while they are on
the job. This means that employees can work and collect pay from their
employer while they are engaged in a form of economic warfare against
their employer. Such tactics stand in contrast to the traditional
strike, which involves a deliberate withholding of labor (and therefore
a foregoing of pay) by employees who wish to protest their wages,
hours, or working conditions. For this reason, a corporate campaign is
viewed by unions and employees as a superior alternative to a
traditional strike because a corporate campaign is effectively a
``strike with pay.''
In addition to permitting employees to engage in corporate campaign
tactics while on the job, the current Board is inclined to permit
employees to engage in such tactics while on the employer's property.
For instance, in a case arising in the hotel industry, the Board held
that off-duty employees of a restaurant company are entitled to
distribute handbills while on the hotel's property.\18\ Even though the
employees were employed by the restaurant company and not the hotel,
the Board concluded that the hotel violated the Act when it prohibited
the off-duty restaurant employees from distributing handbills to hotel
customers while on hotel property.\19\
The Board is currently considering the extent to which non-employee
union agents should be permitted to distribute anti-employer literature
on the employer's property, even if the union has no labor dispute with
that employer.\20\ On November 12, 2010, the NLRB solicited briefs on
the question of whether the Board should continue to apply its existing
precedent, which holds that an employer may not prohibit non-employee
union agents from soliciting or distributing literature on its property
if the employer allows charitable or civic organizations to solicit on
its property.\21\ Several federal courts of appeals have criticized the
Board's current standard in cases involving non-employee union agents
who seek access to an employer's property in order to persuade
customers to boycott the employer.\22\ It remains to be seen whether
the Board will adhere to its precedent despite the contrary views of
these federal courts of appeals.
How Does the Boeing Case Fit in to All of This?
The Acting General Counsel's much-publicized decision to prosecute
an unfair labor practice complaint against Boeing can be viewed as a
corporate campaign tactic in the sense that it involves an effort by
the International Association of Machinists and Aerospace Workers (IAM)
to obtain an outcome that the union was not able to achieve at the
bargaining table.
The complaint alleges that Boeing violated the Act when it decided
to locate a second production line for its 787 Dreamliner aircraft at a
facility in South Carolina, rather than at its IAM-represented
facilities in Washington State and Oregon.\23\ The theory of the
complaint is that Boeing made this decision in order to retaliate
against the IAM-represented employees based on their past strike
activity at the Washington State and Oregon facilities.
This complaint will be litigated before an NLRB Administrative Law
Judge at a hearing beginning on June 14, 2011. I am not in a position
to comment on the issues and allegations that will be litigated at the
hearing. I am not privy to any of the evidence that will be presented
in the hearing, beyond what has been reported publicly. I will,
however, comment on a significant issue that is not going to be
litigated in that hearing.
According to the ``fact sheet'' published on the NLRB's
website,\24\ the Acting General Counsel decided not to prosecute any
allegation that Boeing violated its duty to bargain with the IAM over
the decision to locate the second 787 production line in South
Carolina. This is because the Board concluded that the IAM ``waived its
right to bargain on the issue in its collective bargaining agreement
with Boeing.'' \25\
The Board's conclusion that Boeing had the unilateral right, under
its collective bargaining agreement, to locate this work in South
Carolina is a significant one. The Board's standard for proving that a
union has waived its right to bargain over an issue is an exceedingly
high one, requiring proof that the union's waiver was ``clear and
unmistakable.'' \26\ In other words, the employer and the union must
``unequivocally and specifically express their mutual intention to
permit unilateral employer action with respect to a particular
employment term, notwithstanding the statutory duty to bargain that
would otherwise apply.'' \27\ This standard ``reflects the Board's
policy choice, grounded in the Act, in favor of collective bargaining
concerning changes in working conditions that might precipitate labor
disputes.'' \28\
In this case, the Board found that Boeing and the IAM negotiated
about Boeing's right to perform work in other locations and
``unequivocally and specifically'' agreed that Boeing was entitled to
make these decisions unilaterally. Boeing exercised that right when it
decided to locate the second 787 Dreamliner production line in South
Carolina. The Board concluded that Boeing had no further obligation to
bargain with the IAM over this decision.
Nonetheless, the Acting General Counsel decided to challenge
Boeing's decision as a violation of the NLRA based on a theory of
discrimination and retaliation under Section 8(a)(3) and (1) of the
Act. If the Acting General Counsel succeeds on this theory, he will ask
the Board to order Boeing to move the second 787 production line from
South Carolina to the IAM-represented facilities in Oregon and/or
Washington State. This remedy, if granted, will override Boeing's
collectively bargained right to decide where it wishes to perform this
work.
In my view, this prosecution does not advance the core purpose of
the Act--promoting industrial peace through the process of collective
bargaining. Certainly, the Acting General Counsel has an obligation to
protect the rights of employees to engage in strikes and other
concerted activity protected by the Act. But this is not a case where
the employees are in the vulnerable early stages of an organizing
campaign. The Boeing employees have been represented for decades by a
powerful and sophisticated union, the IAM. They have a mature
collective bargaining relationship, with an agreement that no doubt
reflects a series of carefully negotiated compromises over time. By
stepping into this dispute, the Acting General Counsel is altering the
delicate balance of power and likely undermining the deal that the
parties negotiated when the IAM agreed to recognize Boeing's right to
determine the location where the additional 787 assembly work will be
performed.
For these reasons, the Acting General Counsel's decision to
prosecute this case does not serve ``the Board's policy choice,
grounded in the Act, in favor of collective bargaining concerning
changes in working conditions that might precipitate labor disputes.''
\29\ Board litigation can be a distraction from the bargaining process.
And because Board litigation often takes years to resolve, it can
disrupt labor relations and the expectation of industrial peace during
the term of a multi-year collective bargaining agreement.
The Board's job is not an easy one, to be sure. There are important
rights and interests on both sides of the table. And in a labor dispute
of this magnitude, a breakdown in the collective bargaining
relationship can have a profound effect on the national economy. In
these circumstances, the aggressive prosecution of unfair labor
practice charges may ultimately disrupt, rather than promote,
industrial peace. A dispute that might otherwise have been resolved at
the bargaining table (and arguably was resolved by virtue of the IAM's
waiver in this case) has exploded into an intense public relations
campaign as a result of the Acting General Counsel's decision to
prosecute. That is an unfortunate and costly result, whatever the
outcome of the litigation may be.
This concludes my prepared testimony. Thank you again for the
invitation to appear today. I would be happy to answer any questions
that Members of the Subcommittee may have.
ENDNOTES
\1\ I am not speaking on behalf of Morgan, Lewis & Bockius, the
Georgetown University Law Center, or the American Bar Association, and
my testimony should not be attributed to any of these organizations. My
testimony reflects my own personal views, although I wish to thank Ross
H. Friedman and David R. Broderdorf for their efforts in helping me
preparing this testimony.
\2\ 29 U.S.C. Sec. Sec. 151 et seq.
\3\ Jarol B. Manheim, THE DEATH OF A THOUSAND CUTS: CORPORATE
CAMPAIGNS AND THE ATTACK ON THE CORPORATION (2001).
\4\ See Cynthia L. Estlund, The Ossification of American Labor Law,
102 COLUM. L. REV. 1527, 1605 (2002).
\5\ See id.
\6\ See Fibreboard Paper Prods. Corp. v. NLRB, 379 U.S. 203, 211
(1964) (``One of the primary purposes of the Act is to promote the
peaceful settlement of industrial disputes by subjecting labor-
management controversies to the mediatory influence of negotiation.'');
Local 24, Int'l Bhd. of Teamsters v. Oliver, 358 U.S. 283, 295 (1959)
(``The goal of federal labor policy, as expressed in the Wagner and
Taft-Hartley Acts, is the promotion of collective bargaining * * * and
thereby to minimize industrial strife.'').
\7\ See NLRB v. Insurance Agents' Int'l Union, 361 U.S. 477, 489
(1960) (``The presence of economic weapons in reserve, and their actual
exercise on occasion by the parties, is part and parcel of the system
that the Wagner and Taft-Hartley Acts have recognized.'').
\8\ 29 U.S.C. Sec. 158(d)(1) & (4).
\9\ 29 U.S.C. Sec. 158(d)(3).
\10\ 29 U.S.C. Sec. 185; see also Textile Workers Union v. Lincoln
Mills of Alabama, 353 U.S. 448, 455 (1957) (finding that Section 301
``expresses a federal policy that federal courts should enforce these
agreements on behalf of or against labor organizations and that
industrial peace can be best obtained only in that way'').
\11\ Lincoln Mills, 353 U.S. at 454 (quoting S.Rep. No. 105, 80th
Cong., 1st Sess., p.16).
\12\ See Estlund, supra note 4, at 1603.
\13\ See Edward DeBartolo Corp. v. Florida Gulf Coast Bldg. &
Constr. Trades Council, 485 U.S. 568, 588 (1988) (holding that union
handbills calling for boycott of shopping mall did not constitute a
secondary boycott in violation of the NLRA because of potential First
Amendment concerns); Linn v. United Plant Guard Workers, 383 U.S. 53,
65 (1966) (holding that employer may pursue defamation action against
union only if the defamatory statements were made ``with knowledge of
their falsity or with reckless disregard of whether they were true or
false'').
\14\ Carpenters Local 1506 (Eliason & Knuth of Arizona, Inc.), 355
NLRB No. 159 (Aug. 27, 2010).
\15\ AT&T Connecticut, 356 NLRB No. 118 (March 24, 2011).
\16\ Id., slip op. at 1.
\17\ Id., slip op. at 3.
\18\ New York New York Hotel & Casino, 356 NLRB No. 119 (March 25,
2011).
\19\ Member Hayes dissented in this case as well. Id., slip op. at
15-19.
\20\ Roundy's Inc, 30-CA-17185.
\21\ Sandusky Mall Co., 329 NLRB 618, 622 (1999). If the employer
has permitted only a few ``isolated'' acts of charitable solicitation
on its property, the Board might permit the employer to exclude non-
employee union agents from its property. Id. at 621.
\22\ See, e.g., Salmon Run Shopping Ctr. LLC v. NLRB, 534 F.3d 108,
114 (2d Cir. 2008); Sandusky Mall Co. v. NLRB, 242 F.3d 682, 685-86
(6th Cir. 2001); Be-Lo Stores v. NLRB, 126 F.3d 268, 284 (4th Cir.
1997).
\23\ The Boeing Company, Case 19-CA-32431 (April 20, 2011),
available at http://www.nlrb.gov/sites/ default/files/documents/443/
cpt--19-ca-032431--boeing----4-20-2011--complaint--and--not--hrg.pdf.
\24\ Boeing Complaint Fact Sheet, available at http://www.nlrb.gov/
boeing-complaint-fact-sheet.
\25\ Id.
\26\ See Provena St. Joseph Medical Center, 350 NLRB 808, 811
(2007).
\27\ Id.
\28\ Id.
\29\ Provena St. Joseph Medical Center, 350 NLRB at 811.
______
Chairman Roe. Thank you, Mr. Fritts.
Mr. Andrews, questions?
Mr. Andrews. Thank you, Mr. Chairman.
I would like to thank the witnesses for their preparation
and their compelling testimony this morning.
Mr. Fritts, thank you for the respect that you showed to
the employees and the board members of the NLRB. It is
appreciated, and I thought it was very appropriate.
You have accomplished a lot in your career as a lawyer
representing parties in labor disputes--right? That is
essentially what you do?
Mr. Fritts. Yes.
Mr. Andrews. Let's assume that you were representing an
employer in a labor dispute and there was controversy around
what the employer did. And let's say that the workers who were
contesting things with your client said that your employer was
engaging in a systematic campaign to coerce the employees, you
know, to avoid their collective bargaining rights. And the
committee decided to write you a letter that said, we want to
see all of the communications that exist between you and your
client, you and that employer, about this alleged coercion
campaign.
Would you comply with that request?
Mr. Fritts. Ranking Member Andrews, there would certainly
be attorney-client privilege issues associated with that. But
your question raises a policy issue that currently is before
the Board----
Mr. Andrews. Well, look, my question was, would you comply
with the request? Is the answer ``no''?
Mr. Fritts. I would not disclose attorney-client privileged
communication.
Mr. Andrews. Okay. And the basis of your refusal to
disclose that would be what, would be the attorney-client
privilege? And could you explain to us why you think that would
be an invasion of that privilege?
Mr. Fritts. Well, to the extent the communications
reflected advice of counsel or efforts by me as counsel to
prepare for litigation, they would be privileged.
I would also say that to the extent, in preparing for any
type of litigation, the employer had collected statements from
witnesses, employee witnesses, and there was a promise of
confidentiality, that employer would seek to refuse to disclose
those statements to the Board or to any third party prior to
any litigation, just as the Board----
Mr. Andrews. So the basis of your refusal to turn it over
would be the attorney-client privilege and I guess what we
would call the attorney-work-product privilege?
Mr. Fritts. Right.
Mr. Andrews. I am going to read to you from a letter from
this committee to the acting general counsel of the NLRB of May
5th in which the committee directs the acting general counsel
to turn over, quote, ``all documents and communications between
NLRB Region 19,'' which is where the Boeing complaint
originated, ``and the NLRB national office addressing the
Boeing complaint.''
Do you think that that request violates the attorney-client
privilege?
Mr. Fritts. Well, I think, to the extent there is
privileged communications, the general counsel might be
entitled to withhold those. But I think----
Mr. Andrews. Let's examine that extent. If the general
counsel has said to the people in the field office, ``What
material facts might exist that would show a violation of the
National Labor Relations Act, and give me your opinion as to
whether you think these facts are credible and whether they
rise to that level,'' would that be within the attorney-client
privilege?
Mr. Fritts. Well, I think what you are referring to is what
the Board, historically, zealously defends, and those are
statements of witnesses who have provided affidavits in the
course of investigating the complaint.
Mr. Andrews. Right. And do you agree the Board should
zealously defend that privilege?
Mr. Fritts. I agree that they do, and I agree that they
should. And I think they also should----
Mr. Andrews. So, do you agree that this characterization
that I have given in this letter of May 5th would require those
communications to be turned over?
Mr. Fritts. Well, it depends on, I think, the scope of what
is in the acting general counsel's file----
Mr. Andrews. Well, let's say if there were statements from
witnesses that would be material witnesses that were in those
documents, you believe they shouldn't be turned over, right?
Mr. Fritts. I believe that is consistent with the Board's
longstanding position. And I think the Board's longstanding
position----
Mr. Andrews. Okay. I agree with you. I agree with you that
this request from the committee was inappropriate.
And I would yield back the balance of my time.
Chairman Roe. I thank the ranking member.
Dr. DesJarlais?
Mr. DesJarlais. Thank you, Mr. Chairman.
And thank you to all our witnesses for being here today.
I wanted to start a little bit off-topic and ask if any of
you are aware of a draft Executive order that has been brought
forth by President Obama requiring companies who contract with
the Federal Government to disclose any campaign contributions
in advance of receiving a contract. Are any or all of you
familiar with that Executive order?
Mr. Bego, yes.
Ms. Fisk, no.
Okay. Well, Mr. Bego, you had mentioned that when the SEIU
had come to you that they had asked that you give a list of all
your employees and homes and addresses. So you are familiar
with the draft Executive order.
And for those of you who are not, it is an order where any
company seeking a government contract must supply, in advance
of being awarded the contract, disclosure of all financial
contributions, not only for themselves but also for their
employees.
And we discussed that in the Oversight Committee. And,
basically, one of the glaring exemptions was that unions were
not required to give the same information.
And I thought, maybe, Ms. Fisk, you would have an opinion
on that. But you have no knowledge of that draft Executive
order?
Ms. Fisk. No, I haven't seen the draft Executive order.
Mr. DesJarlais. Okay.
Mr. Bego, you have. Does that particular order bother you
in the same way?
Mr. Bego. Well, I have not had the opportunity to read the
whole thing, but I am familiar with it. And I----
Mr. DesJarlais. Okay. All right. Well, let me move on.
And as we discussed here already today, that unions use
diverse tactics to disrupt an employer's business, including
legislation, political/religious appeals, assaulting complaints
to regulatory agencies, et cetera, negative publicity
campaigns, such as banners and as we spoke of.
How many unfair labor practice charges were filed against
your company during SEIU's corporate campaign?
Mr. Bego. Well, initially, in the first 11 or 12 months, we
had 36 them filed against us. By the time it was over, it was
close to 50.
Mr. DesJarlais. How much did it cost to defend these
charges?
Mr. Bego. Well, just our attorney fees alone were close to
a million dollars in defending ourselves.
Mr. DesJarlais. And, obviously, that had a great impact on
your company?
Mr. Bego. Well, it did. And the thing is, we are fortunate
enough that we could withstand it. The problem is that, today,
most employers can't or aren't willing to go through what I
call the psychological and financial warfare that these
corporate campaigns entail.
And I can tell you categorically that some of the other
cleaning contractors that were being attacked in our area gave
in because psychologically they couldn't take it, financially
they couldn't take it. One case of one contractor I know, it
got so bad, his wife told him that, ``Look, sign the neutrality
agreement. If you don't, I am going to divorce you.''
Mr. DesJarlais. Okay.
Mr. Karnas, the same line of questioning to you. What
tactics did the carpenters use against your company?
Mr. Karnas. Well, they started with bannering, and they
have done a lot of active pickets on job sites. They have gone
to our office complex and have picketed in front of our office
complex.
During one event, they blocked the ingress and egress to
our office property. I had painted the property line with a
utility paint in front of the property, and when they came
there, they promptly kicked all the utility paint away and
violated our private property rights. The next day, we did the
same thing, and they also kicked away the paint. There was some
minor vandalism.
So my biggest concern is that, the rulings allow bannering
but, quite often, they overstep their bounds and they do
illegal acts.
Mr. DesJarlais. How much did it cost your company?
Mr. Karnas. Well, it has cost me tens of thousands of
dollars in legal fees, and it has cost me in business volume, I
would say, probably $100,000 in contracts.
Mr. DesJarlais. Any layoffs of employees?
Mr. Karnas. Well, yes, I have had a tremendous amount of
layoffs. I mean, it is in conjunction with the economy as well
as the union bannering. I basically have very minimal work in
my hometown of Albuquerque.
Mr. DesJarlais. All right.
Thank you all.
I am about out of time, so I will go ahead and yield back,
Mr. Chairman.
Chairman Roe. Thank you.
Mr. Kucinich?
Mr. Kucinich. Thank you very much, Mr. Chairman.
In looking at this hearing, which I appreciate the chairman
calling, we are really looking at some deeper constitutional
questions and questions of labor law, as to whether or not the
intention of the National Labor Relation Act can actually be
satisfied anymore. Because if you see attempts to destructively
undermine the principles underpinning the National Labor
Relations Act and to further attack those who are trying to
work together to settle their disputes, then you have to ask
questions of whether or not the rule of law can prevail when it
comes to the insistence, in this case, of certain corporate
interests to have their way notwithstanding what the law is.
Case in point, we know that the situation at Boeing, in
brief, was a question of unlawful retaliation against union
workers and that it was a retaliation for previous strikes.
This is what the NLRB essentially found, that a new plant was
being located in South Carolina because machinists had gone on
strike and Boeing had determined and made no secret that they
were going to relocate to South Carolina because of these
strikes. However, what Boeing overlooked and what the NLRB
determined is that there was a violation of the National Labor
Relations Act because of retaliation for protected labor
activity. And that is really what we are talking about here:
what is protected and what is not protected.
I am not aware, Mr. Chairman, Ranking Member Andrews, I am
not aware that Boeing filed a counterclaim here to say that
there was a violation on the other side, because the Labor
Relations Act gives rights to both parties, as we know.
So we have here at issue whether or not Congress should be
intervening even more deeply in this dispute by upending the
position of the National Labor Relations Board.
Now, Ms. Fisk, do you see any problems with the violation
of due-process rights of workers if a congressional committee
goes in and tries to get the work product of the NLRB, which
basically made the decision advancing a case saying that there
was a violation of the Labor Relations Act which resulted in
work being moved out of an area, in a sense, in retaliation?
Is there a question, not just of what the Board's rights
are--we got the attorney-client privilege--but is there a
question of an undermining of the due-process rights of the
workers?
Ms. Fisk. Yes, Representative Kucinich, there is.
The Board induces witnesses to testify about the
circumstances in a workplace under promises of confidentiality.
And the Board stands in the shoes of the individual workers in
enforcing their statutory rights.
An individual can't file a lawsuit in Federal court
claiming that his rights were violated under the National Labor
Relations Act. Only the Board decides which cases to prosecute.
And so, when Congress interferes in the Board's processes to
try and sway the outcome, it violates the rights of the
individual workers that the Board is trying to protect.
Mr. Kucinich. Thank you very much, Ms. Fisk.
Mr. Chairman and members of the committee, what we are
looking at here is a double violation of workers' rights. On
one hand, workers are told that their jobs are going to be
moved simply because they took up the right to strike, which is
a protected right under the National Labor Relations Act. And
there is a further violation by attacking their due-process
rights, when, in fact, they have had a decision in their favor
at the National Labor Relations Board.
Now, we have to put this in context. The right to strike
met a corporate response, which was replacement workers.
Corporate campaigns, which were the only other way that unions
defending their workers could appeal to the community in which
they live--it is a free-speech right--appeal to the community
in which they live to look at the corporate conduct and see if
this is the kind of conduct you want to obtain in the
community, now that is under attack.
So we have the right to organize under attack, the right to
collective bargaining, the right to strike, and the First
Amendment right to free speech all under attack here. And we
have to look at this in a larger context, because what is
happening in this country right now, as you look at the State
areas, where unions are under attack at the State level, this
is really an attack on free speech, the right to organize, the
right to collective bargaining.
I thank the chair for calling this hearing because it gives
us a chance to discuss these things. Thank you very much.
Chairman Roe. I thank the gentleman.
Mr. Wilson?
Mr. Wilson. Thank you, Mr. Chairman.
And thank you, witnesses, for being here.
Over the decades, I have had the extraordinary privilege of
working in a bipartisan manner, Democrats and Republicans, to
recruit industry to South Carolina. We work together--
municipal, county, regional, State, Federal--to recruit
industry, and we have been very, very successful. But it has
become a real shock to the people of our State, our region, the
recent attack by the NLRB, a threat to job creation in our
State.
I go back--I served on the board of the State Department of
Commerce with Governor Jim Edwards to recruit Michelin to South
Carolina. We have the North American headquarters of Michelin
in South Carolina, five plants across the State, two in the
district that I represent. It has been very successful. Just 2
weeks ago, an expansion was announced for Earthmover tires to
be developed and built in the district I represent.
We are very grateful that the late Governor Carroll
Campbell recruited BMW to locate in South Carolina. It has been
phenomenally successful. Every X5, X6, Z3, Z4 in the world is
made in South Carolina. In fact, they just announced an
expansion of the plant 2 years ago--it has been completed--to
increase production from 160,000 cars to 240,000 cars.
Now we have Boeing. I want to give credit to our Secretary
of Commerce, Joe Taylor; the chairman of the State Senate
Finance Committee, Hugh Leatherman. They worked with Boeing to
bring--and it has even been agreed to in Politico today for a
new production line. Not moving a line, not moving jobs, it is
a new production line, the second line.
Significant portions of 787s are already being made in
South Carolina.
It is particularly a shock because just 2 months ago--I was
there for the groundbreaking a year and a half--2 months ago, I
was there; the building is complete. A million square feet. The
American people need to know this building is there. A thousand
people have been employed. In fact, they announced 2 months ago
solar panels to provide for the energy to be used at that plant
be one of the largest investments in the world to produce solar
power.
And then out of the blue, the reckless decision by NLRB. It
is not a shift of jobs from the Washington State. It is very
clear that new jobs have been created in Washington State since
this announcement.
With that background, Mr. Fritts, if you could tell us, in
2009, there was 16,000 unfair labor practices filed in our
country, and what has been your experience--how many years have
you worked in this field and your experience and then what
recommendation, or do you have any, for Members of Congress to
stop a frivolous complaint?
Mr. Fritts. In my practice, I try very hard to avoid a
client having a charge filed against them, and if the charge is
filed, I work very hard to either have it dismissed or settled
in some fashion, and the vast majority of unfair labor practice
charges filed are ultimately either dismissed and settled in
some fashion. But in that process of determining whether a
charge has merit through the general counsel's investigation,
there is a lot of work that goes into that, a lot of cost for
the employer that goes into that, and unfortunately, because of
the politicization of the board and the policies of the act and
the shift in precedent, an employer can often be in the
position of having to defend the charge that is a vehicle for
changing the law. And so that is what I try to work to avoid
and avoid being in the position of having an unfair labor
practice trial.
Mr. Wilson. And I want to congratulate Mr. Bego and Mr.
Karnas for surviving.
It was Samuel Gompers, the father of the American labor
movement, who indicated the greatest threat for American labor
is a failed business. And so I want to thank you for
succeeding.
And Mr. Bego, your positive attitude, about $1 million in
attorney's fees, as an attorney myself, I am startled that you
have such a positive attitude. But I was a real estate
attorney, not litigation.
With that, do you have a recommendation to other
businesses, either one of you, as to how to face these type of
charges.
Mr. Bego. Well, it is very difficult. Like I said, they
filed 36 of them against us and most of them are very, very
frivolous. I will give you a couple of real quick. We weren't
allowing them to wear union buttons, which we were. We just
wouldn't allow them to wear them over our logo because we have
to be identified when we are in the buildings at night. But
they put them there on purpose so that they get stract from our
supervisors that you have got to move them. Then they would go
down and file an unfair labor practice that they were told to
remove them, which was not the case.
Another one was that one of our supervisors walked--put his
hand in the pocket of an employee to get out union information.
They do these because they know it is his word against her word
or vice versa, and they know it is hard for the company to
prove. In most cases, the NLRB will uphold these. So,
unfortunately, in those types of cases, the business is
spending money to defend themselves.
Mr. Wilson. Again, thank you very much.
Our State is very grateful to have a right-to-work law.
Thank you.
Chairman Roe. Thank you.
Mr. Tierney.
Mr. Tierney. Thank you very much.
Mr. Bego, in your testimony, you asserted that you had no
problem basically with unions. In fact, at one point, you said,
well, if you want to have a union, fine.
I see that, but when I look at your Executive Management
Services, Inc., employee manual for hourly employees, you make
these statements: Indeed, we believe that a union would serve
only to hurt our profitability and, thus, our job security.
Unions can adversely affect production by narrow work
classifications, silly grievances, strikes and inflexibility.
It is our positive intention to oppose unionism at every proper
and lawful means.
It goes on and on and on that basis. Do you consider that a
popular attitude towards unionism?
Mr. Bego. I don't believe that is our manual, sir, but
anyway.
Mr. Tierney. We can send it down for you to look at it so,
yeah.
Mr. Bego. Okay. Our intent is to stay nonunion unless our
employees come to us.
Mr. Tierney. Okay. It is interesting to note that you----
Mr. Bego. I haven't seen the latest one, okay, that is
fine.
Mr. Tierney. But you are the CEO?
Mr. Bego. Yes, I am, sir.
Mr. Tierney. You wrote this book as well, ``The Devil at My
Doorstep,'' on that, and you mention in your testimony as well.
In that book, you contended that the Obama administration was
under pressure from the Service Employee International Union,
and under that pressure, they weighed in with the National
Labor Relations Board's general counsel to urge him to take an
appeal of an administration decision that you had won.
What you say is, despite your attorney's belief that the
appeal by the NLRB on the union's behalf made no sense, it was
not unexpected and very clear to me, in my mind--and I am not a
conspiracy theory believer--Stern and the SEIU were introducing
their proclaimed persuasion of power via their association with
the White House. I believe that the SEIU contacted the Obama
administration when they learned of the decision, who in turn
made a call to the general counsel of the NLRB in Washington,
D.C., and demanded an appeal of the case.
Mr. Bego, were you aware that Ron Meisberg, who was then
the NLRB general counsel, was in fact appointed by the Bush
administration?
Mr. Bego. Yes, I am, sir.
Mr. Tierney. And you are aware that the Bush administration
board had favored generally employers in a lot of different
instances, right?
Mr. Bego. Well, that is true.
Mr. Tierney. And you ultimately prevailed in front of the
Obama-appointed National Labor Relations Board in June of 2010;
isn't that right?
Mr. Bego. Yes. Are you going to let me answer?
Mr. Tierney. Well, I just asked you, was that right, yes or
no?
Mr. Bego. Yes, but I would like to----
Mr. Tierney. Okay. And do you believe that that was a fair
decision?
Mr. Bego. We won after going through 2 years----
Mr. Tierney. Do you believe it was a fair decision?
Mr. Bego. We won after 2 years with appeals hearings and
waiting on a decision that was appealed. We won the appeals
hearing, okay.
Mr. Tierney. Do you believe it was fixed?
Mr. Bego. Which the administrative law judge overwhelmingly
found in our favor and said that the union's testimony was
contrived and unbelievable, and yet despite that, the National
Labor Relations Board appealed the decision----
Mr. Tierney. And you won, correct?
Mr. Bego. And the reason we won----
Mr. Tierney. And do you think that in the board deciding
that you were correct, that you got a fair resolution by that
board?
Mr. Bego. Only because we kept meticulous records. Most
companies can't afford or take the time to do that.
Mr. Tierney. Do you think that the fact that the President
has the CEO of Boeing on his Export Council in any way means
that Boeing has undue influence on National Labor Relations
Board decisions?
Mr. Bego. I have no comment on that. I don't know the
situation there.
Mr. Tierney. You had a theory here that Andrew Stern----
Mr. Bego. Well, Andrew Stern had been in the White House at
that point about 27 times and we know that----
Mr. Tierney. How about Jeffrey Immelt, the CEO of General
Electric, who is now on the President's Economic Jobs Council;
do you think he has undue influence on National Labor Relations
Board decisions?
Mr. Bego. I wouldn't have any idea.
Mr. Tierney. Mr. Fritts, you testified that the company has
a right to relocate where it wants, and they had settled that
matter on the negotiating table on that issue. But I want to
ask, that is correct, right?
Mr. Fritts. That is the finding of the acting general
counsel.
Mr. Tierney. Now, Ms. Fisk, do you see any distinction at
all between the labor union and the company deciding that it
would be the company's right to decide where to locate and a
distinguishable issue of whether or not the company can violate
the National Labor Relations Act in discriminating in having
conduct?
Ms. Fisk. Yes. There is a huge distinction. It is common
for collective bargaining agreements to give the employer the
right to make certain kinds of entrepreneurial or business
decisions, but a collective bargaining agreement cannot waive
the individual statutory rights of the members of the union to
be free from discrimination on the basis of Section 7 rights.
Mr. Tierney. Thank you.
I yield back, Mr. Chair.
Chairman Roe. I thank the gentleman.
Mr. Rokita.
Mr. Rokita. Thank you, Mr. Chairman.
I want to again thank all the witnesses for their time here
today and remind them and the audience that the witnesses
aren't under trial here today.
This isn't some kind of trial. In fact, the duty of this
committee is to have oversight jurisdiction on the NLRB, and
each of you are helping in doing that today. So thank you.
Mr. Bego, in light of that, do you want to add anything to
your previous answers from questions from Member Tierney?
Mr. Bego. The fact is, and you know, we have always been an
employee-friendly employer. And yes, we have our employee
handbook, and we do believe that workers, if given the
opportunity to work on their own and their free choice, perform
very well under that atmosphere. Now that doesn't mean we are
anti-union.
As I said during the introduction, we gave the SEIU many,
many opportunities to hold an election. In fact, I took out a
half page ad in the ``Indianapolis Star,'' I believe in the
summer of 2007, where we asked the union to have an election,
and they refused to do it. My guess on that is, is you only
need 30 percent to petition for election. I don't think they
had anywhere close, and that is probably drawn out by the fact
that they finally held a strike against our company in 2008
where they got 10 of our employees out of 400 to go on strike.
That is less than 3 percent.
Mr. Rokita. I will follow up on that point, Mr. Bego. Did
the SEIU provide you any evidence that employees of EMS invited
them to begin unionization proceedings?
Mr. Bego. None at all. In fact, I have never received any
information on that.
Mr. Rokita. And then following up on my comment at the
beginning of this questioning that we have a constitutional
duty on this committee and as Members of Congress to oversee
the Federal Government, specifically here the NLRB, and
understanding that one of the two primary functions of the NLRB
is to prevent and remedy unlawful acts by either employers or
unions--so the idea is and as the law that created the NLRB
contemplated--that was supposed to be an arbiter, and an
unbiased one and given the fact that you must be one of the few
people in America that have had this many cases before the
NLRB, do you care to comment at all as to whether the NLRB has
been a fair arbiter of your cases, and can you give any
specific examples?
Mr. Bego. Well, I believe that, you know, the playing field
at this point is unlevel, and I think that is seen in the 36
unfair labor practices they filed against us, initially about
10 or 11 of them were upheld, ones like the buttons and the guy
putting his hand in the employee's pocket. And these continued
to be upheld until we finally filed 33 unfair labor practices
against the SEIU in 1 day.
Mr. Rokita. That is what I thought; you went on the
offensive at one point.
Mr. Bego. Yeah, and that was the only way for us to have an
opportunity. Otherwise, we would have continued to be under
assault.
Mr. Rokita. Thank you.
Mr. Karnas, hearing that testimony, and I couldn't
remember, do you--did you have cases before the NLRB?
Mr. Karnas. I do not, no, sir.
Mr. Rokita. Okay. Thank you.
Mr. Bego, you spoke of the neutrality agreement which you
chose not to sign. Do you know of companies that have chosen to
sign these agreements, and if so, can you explain to the
committee the outcome once those agreements were in place? You
mentioned something about companies that did sign them being
sorry. Do you have specific examples?
Mr. Bego. The interesting thing is that the law firm that
represented us during the corporate campaign by the SEIU also
represented another company in town. That company did, in fact,
sign a neutrality agreement. We did not. We were the only major
company that did not. When they sat down for negotiations, we
had national companies, regional companies, and companies from
the Indianapolis area there, and from what my attorney says,
almost to a man, they all wished they would have not signed the
neutrality agreement.
Mr. Rokita. All right.
Mr. Karnas, anything to add to that?
Mr. Karnas. Just to reflect on, I have tried to always keep
an open mind. I would like to see some bipartisanship here in
Congress and between unions.
I am a former union member of two unions, household Workers
Union 1199 and the International Brotherhood of Laborers. My
wife is currently in a teachers union.
So I am not anti-union. I have always tried to keep an open
dialogue and conversation with the union members, of course,
under the premise or the mandate that the conversations that we
have are not to be construed as bargaining agreements, and we
try to be very transparent, ethical and honorable.
And what bothers me when I talk to somebody man on man, I
have been told multiple times, it is just my job. But it is
never just your job to spit upon somebody or to disparage a man
or a woman or to threaten their reputation. So I feel that the
playing field is unlevel.
Mr. Rokita. Thank you, Mr. Chairman.
I yield back.
Chairman Roe. I thank the gentleman.
Mr. Holt.
Mr. Holt. Thank you.
Clearly, these matters that come before the NLRB are
complicated matters.
Ms. Fisk, you have stated quite strongly and clearly that
workers cannot and should not be penalized for exercising their
existing rights, whether they be civil rights or rights, such
as on the basis of race or sex, or rights that derive from the
NLRA.
And, Mr. Fritts, in your conversation with Mr. Andrews, I
think it was established pretty well that it is inappropriate
to interfere with the orderly process before an administrative
law judge for establishing whether workers have been penalized
and whether these are, indeed, established rights.
So, as someone who always tries to simplify things so I can
understand them, I would like to get really to the basis for
this, and my question is for you, Ms. Fisk. Why are these
established? I mean, I go back to the time when the Wagner Act,
these protections, were established. These were tough economic
times. Clearly, this was not to make it hard for employers. It
was not to try to make disadvantageous economic decisions. Why
is it important to protect these rights for economic reasons?
In your testimony, you talked about preventing a race to the
bottom. Could you elaborate on that, please?
Ms. Fisk. Yes, of course.
The reason why Congress enacted the National Labor
Relations Act in 1935 at the depths of the Great Depression was
because Congress found that collective bargaining would improve
working conditions, that it would raise labor rates and
increase the rates of employment. And that, in fact, proved
true.
From the time that the statute was enacted through the
1970s, America enjoyed enormously expanding productivity, a
vibrant middle class, and that was made possible and still is
sometimes made possible by union representation. Median weekly
wages for union workers average $917 a week; that is about
$47,000 a year. Median weekly wages in a nonunion workplace,
about $800--$700 a week which is about $37,000 a year. Union
workplaces are more likely to respect safety protections. These
are the kinds of the things that the National Labor Relations
Act was enacted.
My brother was trained in a union apprenticeship program as
a machinist. He now lives in Arizona, works nonunion, because
it is a right-to-work State, and makes less in real terms than
he made when he was a young man.
Moreover, last summer he was working in Phoenix, in a shop,
with no air conditioning. It was about 125 degrees inside that
machine shop on a daily basis. I said to him, why don't you
file a complaint with the Occupational Safety and Health
Administration? That is unsafe. It is dangerous. They didn't
even provide water.
And he said, because I need my job. If I ban together with
my coworkers to complain about this or Lord knows if I go down
to some government agency, I will get fired like that.
And I said, yes, but then you could file a claim and get
your job back.
He said, I can't afford to wait 6 or 8 months and be
unemployed. I have to pay my mortgage. I will lose my house.
Mr. Holt. Well, would you say that in our efforts to ensure
that due process is followed, that the administrative law judge
is able to operate in a fair and efficient way, still is useful
today as it was in yesteryear that you are describing? Is it
still true that by providing for good wages and a strong safety
record and communications about a company's practices actually
benefits the consumer and the economy at large?
Ms. Fisk. Of course, because it enables workers to demand
their rights to be respected, and it enables consumers to urge
companies to respect the legal rights of employees.
Mr. Holt. Thank you.
Chairman Roe. I thank the gentleman.
Dr. Bucshon.
Mr. Bucshon. Thank you, Mr. Chairman.
A question for Mr. Karnas. The carpenters, they claim I
guess that you didn't provide benefits to your employees. Can
you kind of provide a brief overview of what you provided?
Mr. Karnas. Yes, sir.
We pay about 85 percent of our employees' health and dental
plan. We also will pay 100 percent of a life insurance plan. We
have a 401(k), a public works pension plan. We have safety
training that we pay for.
And Ms. Fisk mentioned safety. We are a member of three
OSHA--Federal OSHA partnership programs and our rating for
workmen's comp is a .81, which is a testament to what our
safety in our culture--in our company is. So we are very proud
of those things.
Mr. Bucshon. As you should be. How would you think that
benefits program compares to other companies in your area?
Mr. Karnas. Oh, I think it is probably--we set the bar for
subcontractors. There might be some general contractors. We are
a small company, truly are, 55 employees. I am not trying to be
the richest guy in the graveyard. My employees are my family,
and we set the bar for subcontractors.
Mr. Bucshon. Great.
Ms. Fisk, I want to ask you, you were commenting on the
1970s, and I just wanted to give a background. My dad was a
United Mine Worker for 37 years. I grew up in that atmosphere.
Could you comment on maybe how Federal law has changed and
responded to workplace conditions in that--probably I would
imagine it is tremendously different now the protections that
the government has for workers and everything compared to the
1960s and 1970s. Would you think that there has been a big
change in that?
Ms. Fisk. Well, let's see, since the 1970s, Congress
prohibited discrimination on the basis of disability, but the
Occupational Safety and Health Act was enacted in the 1960s.
The National Labor Relations Act has not been amended in
substance really since the 1950s, except it was applied to the
health care industry in 1974. So there has not been huge
statutory expansion.
Mr. Bucshon. I guess my question would be is that, would
you think today's work climate--is today's work climate in 2011
significantly different from the 1970s, when my dad was in the
United Mine Workers, to enough of an extent where it is
difficult to justify this aggressive activity that we have been
describing today on behalf of the unions, claiming that there
are continuing ongoing safety issues and other unfair practices
going on, compared to historically why unions were valuable to
our society in the past?
I mean, is there a difference because in my mind, there is
a significant difference in our climate, in our country today,
compared to when I grew up, when my dad was--and what I
experienced when I was a kid.
Ms. Fisk. Work still remains difficult and dangerous. Coal
mines still have massive explosions, killing dozens of people.
I think that----
Mr. Bucshon. I want to clarify that. Dozens of explosions
killing many people. There has been--we had one coal mine
explosion, and I know that that is what you are talking about.
My dad worked in the coal mine at Peabody Mine No. 10, Pawnee,
Illinois, 37 years, didn't lose 1 day for a work-related
injury, and during that time frame, they had no explosions, and
they had a few injuries based on rooftop problems. So I think
you are over generalizing and sensationalizing that particular
aspect. I know the coal industry very well.
So what I am trying to get at is, is there ongoing
justification for this type of aggressive activity in the
workplace against businesses today compared to when unions
were, you could argue, very, very necessary in the history of
our country? Because, in my view, this type of activity that is
overly aggressive, that what goes outside of people's
constitutional rights or what the labor law has in place, isn't
necessary.
Ms. Fisk. I didn't say dozens of explosions. I said
explosions that kill dozens of people. Work still remains
dangerous in many sectors. Construction still has high rates of
injuries.
Mr. Bucshon. I have a limited time so I want to ask you
this question then. How would what these people are doing
impact that? How would that make it better?
Chairman Roe. If you will hold that question. His time has
expired.
Mr. Bucshon. My time has expired.
Chairman Roe. Mr. Hinojosa.
Mr. Hinojosa. Thank you, Mr. Chairman.
I thank the panelists for coming before our committee, and
I would like to make a statement and then ask some questions.
While Congress' oversight of the NLRB is important, I
strongly urge my colleagues on this committee to refrain from
pointing to the NLRB and refrain from linking them to our
Nation's unacceptable unemployment rate.
Instead, we must do what Congressman Rob Andrews said in
his opening statement: We must focus on working together to
create jobs and provide much-needed relief to American workers.
Dr. Fisk, in your testimony, you indicate that corporate
social responsibility campaigns are designed to strengthen the
middle class, a goal which the House Committee on Education and
Labor in the last 110th Congress endorsed in a pair of
congressional hearings which I attended. They were on
strengthening America's middle class in 2007. In your opinion,
how do corporate social responsibility campaigns accomplish the
goal of strengthening the working middle class?
Ms. Fisk. Union corporate social responsibility campaigns
are designed to provide information to workers, to enable them
to assert their rights, in particular, rights to decent wages,
to benefits, to safe workplaces, and to consumers so that
consumers can choose to patronize those companies that have
strong labor practices and safety records and environmental
records, and not patronize those companies that have dangerous
workplaces or pay low wages. It is information that allows all
of us as consumers, as workers, and as citizens to hold
companies accountable and to make sure that they treat their
workers fairly.
Mr. Hinojosa. Dr. Fisk, in your testimony, you conclude
that the board's recent decisions in the area of labor protests
are entirely consistent with the trend in the United States
Supreme Court's First Amendment jurisprudence. Can you
elaborate on that point?
Ms. Fisk. Yes, of course. The United States Supreme Court
has recently decided a number of cases protecting rights to
picket and protest in various ways. Sometimes people find those
protests deeply offensive.
Depending on your point of view, Operation Rescue protests
outside of women's health clinics is deeply offensive, but it
happens to be constitutionally protected, as the Supreme Court
has twice held.
Depending on your point of view, protests at military
funerals accusing the death of the serviceperson on America's
attitudes with respect to sexual orientation are outrageously
offensive, but just this spring, by an 8-1 vote, the United
States Supreme Court held that that kind of protest is
constitutionally protected.
In a free society, we have to protect speech that we don't
like.
Mr. Hinojosa. Thank you for that clarification.
My next question is to Chet Karnas, Lone Sun Builders.
In your testimony you state that you fought back against
the Carpenters Union by engaging in your own public campaign
through presentations to local groups and the press, creating a
blog, producing a brochure, and even creating your own banners
that said, in part, shame on Carpenters Union; honesty and
integrity are the American way; stop the lies.
Do you believe that the First Amendment protects your
rights to free speech?
Mr. Karnas. Yes, I do.
Mr. Hinojosa. If yes, in your testimony, you state you were
disappointed with the board's recent bannering decision because
it protected this coercive practice. Do you believe your
actions were coercive?
Mr. Karnas. I do not because I believe the recent decision
on Carpenters Union 1506 was on the Carpenters Union, and I
consider the Carpenters Union's tactics to be a rogue union
with rogue tactics. The AFL-CIO construction unions----
Mr. Hinojosa. If that is how you feel, did you file a
complaint or charge against the NLRB?
Mr. Karnas. No, sir. Due to the litigation costs and due to
counsel--just due to the environment, the business environment,
it is not cost-effective. It didn't pass the cost-benefit
analysis, and I really thought I had a dialogue with the
carpenters' representative. I am very transparent, tried to
communicate multiple times. I tried that. I tried to be
bipartisan and honest and communicate first.
Mr. Hinojosa. My time has expired.
Chairman Roe. I thank the gentleman.
Mr. Gowdy.
Mr. Gowdy. Thank you, Mr. Chairman.
Mr. Fritts, can Boeing factor in South Carolina's financial
incentives in their decision to relocate.
Mr. Fritts. There is certainly nothing unlawful with Boeing
considering what financial benefit the State of South Carolina
may be willing to provide them, and that will be one of the
issues I am sure that they will argue in the hearing.
Mr. Gowdy. You will be doing a pretty sorry job for your
shareholders if you didn't factor in the fact that a State was
willing to incentivize your relocation there, wouldn't you?
Mr. Fritts. I would think that is an important business
consideration.
Mr. Gowdy. Are you familiar with the case of First National
Maintenance Corp. v. NLRB?
Mr. Fritts. Yes.
Mr. Gowdy. Am I stating this correctly: Congress had no
expectation that the elected union representative would become
an equal partner in the running of the business enterprise?
Mr. Fritts. Yes, that is accurate.
Mr. Gowdy. Is that a fair quote from either the holding or
dicta in that case?
Mr. Fritts. Yes, that is an accurate quote.
Mr. Gowdy. All right. So Boeing has to make what is the
best decision for them, correct? They can factor in the fact
that South Carolina provides financial incentives to locate to
that State?
Mr. Fritts. Yes.
Mr. Gowdy. All right. Is there any evidence that Boeing
negotiated in bad faith?
Mr. Fritts. I don't know what evidence the acting general
counsel has or collected----
Mr. Gowdy. That is not part of the complaint.
Mr. Fritts. But what I do know is the acting general
counsel has determined that there was no violation of Boeing's
duty to bargain in good faith. They did, in fact, satisfy their
duty to bargain with the union by negotiating language in their
collective bargaining agreement that gave them the right to
place new work wherever they wanted to.
Mr. Gowdy. All right. And this case is going to turn on
whether or not it was a new line of work or a transfer of
existing work, correct?
Mr. Fritts. I believe so, but again, I am not privy to all
of the evidence that is----
Mr. Gowdy. Are you privy to the fact that Boeing added
2,000 jobs in Washington State even after the transfer of work
to North Charleston?
Mr. Fritts. My understanding is that the work in the Puget
Sound area has grown, and that no IAM representative or
employee is going to be laid off as a result of this decision.
Mr. Gowdy. Are you familiar with the quote from the
spokesperson for the NLRB?
Mr. Fritts. I am sorry, which quote?
Mr. Gowdy. We are not telling Boeing they can't build
planes in South Carolina; we are talking about one specific
piece of work, three planes a month. If they keep those three
planes a month in Washington, then there is no problem. Beyond
the 10 planes, Boeing can build whatever it wants in South
Carolina.
Have we gotten to the point where the NLRB is going to tell
a company how many widgets or planes or anything else they can
build in any particular State? Is that how you read this? The
NLRB is going to tell a company precisely the number of a
product it can build in a State?
Mr. Fritts. That is the essence of the complaint, yes.
Mr. Gowdy. Let me ask you about another quote.
Mr. McNerney, who is the CEO of Boeing, said that one of
the considerations in where to place the new work was strikes.
Is it inappropriate, legally, for him to say that one of the
considerations for where they are going to place a new line of
work is whether or not they will have a consistent source of
labor?
Mr. Fritts. There is a certain level of candid dialogue
that occurs when you have an established bargaining
relationship. I know based on what has been reported that there
were concerns about customers who were unwilling to tolerate
interruption in production.
Mr. Gowdy. Let's be very clear on that because there was a
customer who said we are going to have to reevaluate our
business relationship with you because of the unpredictability
of your work, correct? A customer is threatening to take its
work somewhere else because there have been four strikes,
correct?
Mr. Fritts. That is what I understand, yes.
Mr. Gowdy. Am I to be led to believe by the NLRB that that
cannot be considered?
Mr. Fritts. Ultimately, the issue in the case is would
Boeing have made this decision for business reasons other than
the strike activity of the employees in the plant, and
ultimately, that is the issue for the board.
Mr. Gowdy. Well, let me ask you this. Is it okay for him to
think it but just not say it? Would he have been fine to just
think to himself, we better look for a consistent workforce,
instead of saying it? Was that the sin he committed, that he
actually said it?
Mr. Fritts. I think as a result of this case, employers are
going to be cautious about what they say publicly about their
business decisions.
Mr. Gowdy. Well, my time is almost up. I find it an
abomination that you can wear a prison uniform and represent
yourself as a prisoner while you are at work, but a CEO of
Boeing cannot say we can't survive with these continued work
stoppages.
That is an abomination, and I will yield back my time, Mr.
Chair.
Chairman Roe. I thank the gentleman.
Mr. Scott.
Mr. Scott. Thank you, Mr. Chairman.
Ms. Fisk, are you aware that our committee has requested
documents from the NLRB?
Ms. Fisk. Yes, I am.
Mr. Scott. Are those documents accessible under the normal
discovery process or Freedom of Information?
Ms. Fisk. I imagine that documents about pending cases that
reflect attorney-client privilege, as Mr. Fritts said, work
product, or strategic decisions of the general counsel are not
available either through the ordinary board processes or
through a FOIA request.
Mr. Scott. Can a litigant benefit if the secret internal
communications of NLRB are made public?
Ms. Fisk. Yes, of course. That is what the Supreme Court
held in Hickman v. Taylor in the 1930s.
Mr. Scott. Thank you. We have heard a lot of complaints,
but do any of the witnesses have legislative recommendations?
Mr. Bego. As far as unfair labor practices in the corporate
campaigns?
Mr. Scott. Right.
Mr. Bego. Well, in our experience with all corporate
campaigns run against us. It is called death by a thousand
cuts. So not only were they filing unfair labor practices but
OSHA complaints, EEOC complaints. We had people in my
neighborhood on Halloween trick-or-treating, handing out fliers
to people in my company. We had clergy people involved. It goes
on and on and on. Daily, you wake up and say, what is next.
One thing I do believe that is necessary is, on the unfair
labor practice side, is there has to be some type of loser pay
law, that if people, unions or employers, either one, file
complaints that are frivolous and they lose, they need to be
held accountable for them.
Mr. Scott. Ms. Fisk, is there a prohibition against
frivolous claims?
Ms. Fisk. Yes, of course.
Well, explicitly in the statute, no, but any adjudicative
entity, whether it is a court or the National Labor Relations
Act, has a way of dealing with nonmeritorious complaints.
The challenge is protecting the right of people to file
claims that later turn out not to be successful with
prohibiting complaints that are filed for harassing or other
purposes. That is a complicated line to draw for Federal
courts. It is a complicated line to draw for an agency.
But as long as we are committed to the constitutional right
of people to petition government for redress of grievances, we
have to have a regime that allows people to file complaints
that turn out, upon investigation, not to be well based either
in the fact or the law.
Mr. Scott. And are there limitations on freedom of speech
as to what legislative response we can have? Ms. Fisk?
Ms. Fisk. I am sorry?
Mr. Scott. Are there limitations on freedom of speech under
the Constitution or right to freedom of speech as to what we
can do to some of these complaints?
Ms. Fisk. Yes, of course. I mean, you can't defame somebody
by standing around in public and shouting falsehoods that harm
their reputation unless they are a public figure and you lack
malice, but in terms of just filing litigation documents, there
is a First Amendment right to make allegations in litigation
documents, including allegations of fact that later turn out
not to be true.
Chairman Roe. I thank the gentleman.
Mr. Walberg.
Mr. Walberg. Thank you, Mr. Chairman.
And before I ask the question, I just feel compelled to let
off some steam as well.
It is absolutely frustrating to even have to have a hearing
like this. I come from Michigan, that led this country into
recession, and I am hopeful that we don't ultimately be the
last one out.
But the impact of what the NLRB is doing indicates to me
and I think it ought to indicate to people of goodwill and
belief in what capitalism and what this country is all about,
it ought to lead them to fear as well, that what either the
bureaucrats and this NLRB board are doing is either out of
ignorance of what it takes to move a country forward or it is
just malice aforethought, to change this country from what it
is, what it has been, what it can be.
Having said that, I thank the panel for being here, and Mr.
Bego, I thank you for being here. I see you are from Michigan,
that you have operations in Michigan, that you are providing
jobs in my State, and I thank you for that, in tough times.
Mr. Bego. I thank you.
Mr. Walberg. I come from a county that has a 14 percent
unemployment rate still to this day. So jobs are important to
us, and I thank you for taking the risk and taking the abuse
that I read and I hear is going on here.
You said that it costs about $1 million to defend yourself
from the corporate campaign. How many jobs could have been
created, to your guesstimate, with that kind of investment?
Mr. Bego. Forty, 50 jobs or more, and you know, that is the
problem when you go into these, and that is why a lot of
employers don't fight them because they don't have the
resources to do it. We are fortunate we do, that we are big
enough, and we stretch across the country, and we can withstand
it.
Mr. Walberg. From a financial and personal standpoint, I
say relational standpoint even, in the case of your employees,
what kind of a toll did it take on your employees?
Mr. Bego. Well----
Mr. Walberg. Marriages, whatever.
Mr. Bego. It was difficult for everybody, and the ones that
I felt the worst for were our cleaners who are out in the
buildings because the organizers would be out there at night,
waiting for them to come out of the buildings to try and force
them to sign union cards while they were doing all the other
things to me and my customers. And I saw some of the affidavits
that they wrote when we were in the hearing, and it just--I am
sorry, I get emotional--it just was appalling what they did to
some of our employees.
And then, you know, that is what hurt the most, but the
bright spot was is that when I met with the employees, they
understood what was going on, and they didn't want any part of
what the union had to sell, and that kept me going.
Mr. Walberg. Well, I appreciate that.
Mr. Karnas, how has the NLRB's September 2010 bannering
decision affected your business? And a follow-up question for
your consideration, what cost did it have on your businesses
and your employees?
Mr. Karnas. Well, first of all, the bannering decision,
September 2010, again, was not endorsed by all the construction
trade unions.
In New Mexico, we have the New Mexico Construction Building
and Trades Council, and they have had an editorial in our local
paper saying that they don't endorse those kind of tactics
because those kind of tactics are divisive. It is a visual
blight. It is bad for tourism. It is bad for business. It is
bad for the construction profession, for its reputation, and it
is a job killer, and it is not a job creator by any means.
And I believe that bannering decision was made for the
minority of the construction trade groups. Most construction
trade groups do not agree with those tactics, and they have
openly stated that.
So, again, I believe the Carpenters Union is a rogue union,
and I believe their tactics are unethical and reprehensible,
and I would like the National Labor Relations Board to take
that into consideration and make sure that the bannering
decision is enforced. We all have free speech rights, but they
have violated those rights every time.
Mr. Walberg. It is a chilling effect on those rights?
Mr. Karnas. I am sorry.
Mr. Walberg. This is a chilling effect on all of those
rights, even for a majority of the trades people?
Mr. Karnas. Yes, and our employees, they have no--after
their abhorrent behavior, they are with us 100 percent, and
again, we are not anti-union. You talk about collective
bargaining. Our employees are involved in our processes. I
mentioned our benefits programs before. On top of our health
benefits, we also include an has for employee savings accounts
when they have the larger deductibles, and this is all from
employee input. And we have a lot of buy in, but it has had a
chilling effect on our employees. There has been some fear of
some safety, some threats. Of course, even the threats have
been loud, and so we have had a negative impact, but we
continue on. I think we are closer for it, and we still keep an
open mind, and we wish to have dialogue.
Mr. Walberg. I thank you, and Mr. Chairman, I thank you for
the time and I also thank you for letting the time go so we
could hear that employees get it, in many cases, even though
their leadership doesn't.
Chairman Roe. Mr. Miller.
Mr. Miller. Thank you, Mr. Chairman.
Mr. Fritts, in your submitted testimony, you suggested that
in the discussions about the movement of the plant, that the
employees had waived their right to Boeing making this
decision?
Mr. Fritts. That is what the acting general counsel found.
Mr. Miller. And Ms. Fisk, in your statement, I think in
responding to Mr. Andrews you suggested that that may be so,
but they did not waive their rights against being discriminated
against under the law?
Ms. Fisk. That is correct.
Mr. Miller. And that would be what right?
Ms. Fisk. The right under Section 8(a)(3) of the NLRA to be
free from discrimination in regard to having exercised
statutory rights.
Mr. Miller. So when various officers and the CEO of Boeing
make a series of public statements that they made this decision
and will continue to make these decisions because of the
strikes at the Washington facility, one of the units of the
Washington facility, what choice does the general counsel have
here given that retaliatory actions against legal union
activities are prohibited under the law?
Ms. Fisk. The general counsel is appointed to enforce the
National Labor Relations Act. It is important to distinguish
that there may not have been a violation under 8(a)(5), which
imposes a duty to bargain, but that has nothing to do with
whether there was a violation under Section 8(a)(3) of the
statute, which prohibits discrimination in regard to union
activity.
Mr. Miller. So if Boeing, if these same corporate officers
had said, well, we are going to move our planet because there
are too many African-Americans in Seattle, would those African-
American workers have lost their right because Boeing and the
machinists decided that they could move this facility prior to
the knowledge of that reason?
Ms. Fisk. Of course not. The African-Americans have rights
under Title VII of the Civil Rights Act of 1964, as does
everybody, to be free from discrimination in regards to race as
companies make decisions about how to run their operations.
Mr. Miller. And to date, we have this complaint--we haven't
heard from the administrative law judge yet, correct?
Ms. Fisk. That is correct. We have no idea what the
evidence is ultimately going to show about why Boeing decided
to move its operations.
Mr. Miller. You don't know whether or not the board will
agree with that finding or whether it will be appealed to the
board or whether the board will disagree with that finding; is
that not correct?
Ms. Fisk. That is correct.
Mr. Miller. And we don't know in fact whether that will be
appealed?
Ms. Fisk. That is correct.
Mr. Miller. But the allegation here is that this decision
was based in part on an illegal activity?
Ms. Fisk. That is correct. It is an allegation based on the
board's investigation of the facts, but those facts have not
been proven.
Mr. Miller. So the idea that somehow this decision--I find
it rather ironic that we would say that this decision somehow
is going to change America for what it could be, when, in fact,
what you have is the protection of rights of workers, under the
law, clearly stated. You have on videotape comments by these
individuals saying that that is the reason why they are
continuing to move the facility or move the facility, and the
question is whether or not the law will be allowed to work or
whether this committee and the oversight committee will be able
to reach in and tamper and interfere with that process, which
is essentially a judicial process.
Ms. Fisk. That is correct.
Mr. Miller. Have you ever asked--Mr. Fritts, have you ever
asked the Congress to defund a case against one of your
clients?
Mr. Fritts. I am not a lobbyist. I am a lawyer.
Mr. Miller. No, I am just asking as a lawyer. This is one
of the tools that is in apparently now available if you come to
the Congress and ask them to defund the agency bringing the
case, prior to any little bit of, you know, presentation of
evidence.
Mr. Fritts. Congressman, all I can tell you is my client's
pay me to litigate cases. They don't pay me to lobby.
Mr. Miller. It is not a question of lobbying. It is a
question of whether or not you think that is a proper tool.
Mr. Fritts. I am not here to comment on what is appropriate
for Congress or for the purposes of congressional oversight. I
am here to testify about the National Labor Relations Act and
practice before the board.
Mr. Miller. Ms. Fisk, you also state in your testimony
that, in fact, the Supreme Court has found the board to be too
restrictive on the issues of free speech in union campaigns; is
that accurate?
Ms. Fisk. That is correct.
Mr. Miller. It wasn't on initiation by the board. In fact,
the board was going the other direction until the Supreme Court
spoke.
Ms. Fisk. It wasn't the Supreme Court. It was the Federal
Courts of Appeals. What happens is the board interprets the
statute one way and then tries to get enforcement, either by
going into a district court to get an injunction or it issues a
decision, and then one of the parties appeals it or seeks
review in the Federal Courts of Appeals. And the board was
losing its cases in which it was holding that bannering is
coercive, and ultimately, therefore, the board decided that it
had to change its position because the Federal Courts of
Appeals, including the D.C. Circuit in the Sheet Metal Workers
case, in an opinion by Chief Judge Douglas Ginsburg, who is
nobody's liberal, found that bannering is protected by the
First Amendment.
Chairman Roe. The gentleman's time has expired.
Mr. Kline.
Mr. Kline. Thank you, Mr. Chairman.
Thank you to the panel for being here.
Mr. Fritts, earlier in the discussion today, there were
questions raised regarding attorney-client privilege. In
inquiries that this committee has made of the National Labor
Relations Board, I have got to admit up front I am not an
attorney, but it is my understanding that attorney-client
privilege is not an absolute, that in some circumstances, the
parties can be compelled to provide information. Is that
correct?
Mr. Fritts. That is correct. Certainly----
Mr. Kline. Thank you. More to the point raised earlier,
this committee is authorized, indeed obligated, to conduct
oversight of the agencies and entities within its purview and
the actions those agencies and entities take. And that is an
obligation that we take seriously.
And I would point out that both parties have taken this
obligation seriously. It is fundamental, fundamental to the
role of Congress.
I want to be clear that inquiries this committee has made
of the NLRB have been made in connection with our authority and
obligation to conduct congressional oversight, and that
authority has been exercised consistent with House Rules.
Now, would you say, Mr. Fritts, that if there are concerns
regarding the information requested, wouldn't you agree that it
would fall to Congress and the board to discuss and resolve any
disagreement over what can be produced consistent with
congressional responsibilities and rules?
Mr. Fritts. I agree.
Chairman Kline. Thank you.
We have had this discussion back and forth many times, the
members of this committee. Oversight is a tough business. With
the National Labor Relations Board, it is absolutely
indisputable--and I am ready to argue with anybody here--that
the nature, and I would argue, the bias, of that board shifts.
Typically when it is a Republican administration, the Democrats
claim that workers' rights are being denied and it is too pro-
business. And when it is a Democrat's administration,
Republicans complain. When it is a Republican administration,
this committee has called for hearings and brought board
members here to testify, and I have complained about it, and
now in this administration, I think we have an outrageous
overreach of the board, and I am doing what I can do to provide
the oversight to that board.
It is very powerful. It is powerful beyond what we imagined
that it could be, and we need to exercise checks and balances
that the legislative branch, Congress, and the executive branch
and this board to watch for overreach both ways.
So I would just say to my colleagues, to the panel, and to
those here in the room that we are going to continue to
exercise our authority as both parties have done and provide
oversight to this board and to all agencies and departments in
the executive branch.
I yield back.
Chairman Roe. I thank the gentleman for yielding. I will
now exercise my time for questions, and I would start out by
saying that--well, first of all, Mr. Bego and Mr. Karnas, thank
goodness there are people like you out there who have the deep
pockets, and you, Mr. Karnas, are a very small business, and I
am very familiar with the backbone to not be intimidated. And I
think you are absolutely right. I grew up in union households.
As a matter of fact, I have also belonged to a union, and I
think it is inherent on all of us to allow and make sure that
workers are treated properly and make sure that employers are
treated properly.
Jobs are the single most important because, as Mr. Andrews
brought up in the very beginning, and I have got a news flash
for you. We don't have an income tax from Tennessee. We are a
right-to-work State, and we would love to have your business.
That is the way our Governor feels, and that is the way I feel
about this.
When you see a company like Boeing, a great company--I have
been through part of their company in Washington State, great
employees. That business competes around the world, and they
have a lot of factors. Part of it is labor, a huge part, and
any business--I heard both of you all say that. And absolutely,
I am aware of it myself. The most important person in my shop
are my employees, who work with me every day. They didn't work
for me. They worked with me in a small business.
And Mr. Karnas, I heard you say that, too. You are very
proud of your people.
And the same thing, Mr. Bego.
And I would like to know why in the world in American
business, we have got jobs going overseas, and you see losing
jobs and jobs and especially our manufacturing jobs, why in the
world we would have a situation where you could go to a non--a
shop or an employer who is not even involved in a conflict, a
discussion, and have someone show up with a rat out there as an
inflatable rat or a banner, how that creates a job or helps a
worker. I am sort of slow, but I don't understand that.
And the other thing I can't understand is, when you have a
business--Mr. Bego, I want you to speak to this--is when you
have a business out there, and you have hundreds or you, in
case, thousands of employees, who haven't asked for a union, no
one in your shop asks, and if you want to have a vote, that is
the way America votes. You have an election. We now have a
process for that, but these corporate campaigns are a way to
avoid any pain on the side of the person asking for it
completely, and you used the same tactics as you can with a
strike, except you don't feel, as Mr. Fritts pointed out, the
pain of losing your paycheck.
So, in your case, you didn't have anyone asking for a
union. They stepped in to ask, and then you went through
essentially $1 million worth of litigation to protect yourself
from something you didn't ask for or your employees asked for.
Can you speak to that?
Mr. Bego. Well, that is correct, and I think people have to
understand what a corporate campaign is versus what is going on
with Boeing right now.
In a corporate campaign, the union, as I said before, has
come in and looked at as a business model. And in our case,
they came went out to about 10 janitorial firms in the Midwest,
okay. And the thing about this is, if they could follow the
law, the National Labor Relations Act, and get 30 percent of
the people to sign cards, they could petition for an election.
They didn't do that. My guess is because they couldn't get
enough people to sign the cards.
So what they did then is start this campaign that would
force unionize my people, and I said, no, because it wasn't
right for my people.
And it continues, and the board today is trying to
promulgate rules that will help them process these corporate
campaigns easier, and one simple example real quick is, they
are trying to get one where you have to post the National Labor
Relations Act, specifically the part of it that says you can
unionize. Sounds good, but they also want to attach fines to
it, like $10,000 every time you are found guilty of not
posting.
That is not the real goal. The real goal is, is not to
inform the people. The real goal is they go in. They don't have
it up. The organizer goes back to the union hall, and he says,
we will file an unfair labor practice. All of the sudden, the
business has two or three of those sitting there, and the union
comes in and says, I can make your pain go away; here is what I
will do. You sign this neutrality agreement, we will withdraw
the charges. And they have got what they want because now they
have got card check; they have got the people's home addresses
and their names. That is what the game is.
Chairman Roe. I am going to ask Mr. Fritts very quickly, is
a private employer subject to oversight by a Member of
Congress?
Mr. Fritts. Is it proper----
Chairman Roe. Private citizen, they are not. We are not.
Mr. Fritts. No.
Chairman Roe. And is a private employer subject to the
oversight of this committee?
Mr. Fritts. I am not an expert on oversight.
Chairman Roe. The answer is no, and is a private employer
subject to oversight of this Congress?
Mr. Fritts. I assume not, no.
Chairman Roe. Well, is the National Labor Relations Board
subject to oversight by this Congress?
Mr. Fritts. Yes.
Chairman Roe. And by this committee?
Mr. Fritts. Yes.
Chairman Roe. I think that is the point Mr. Kline was
trying to make. My time has expired.
Any closing statements from the ranking member.
Mr. Andrews. Yes. I would like to again thank the witnesses
and our colleagues for what I think was a very interesting and
instructive exchange.
I think the record of the hearing establishes four
propositions: The first is that in a boisterous and exuberant
democracy, when people express their opinions, sometimes people
are troubled and find them offensive. I hope we always find
opinions offensive because that means people are free to speak
their minds.
The second proposition established is that the Boeing
decision is very controversial and hasn't been decided yet. So
I guess we are a little ahead of our time in that regard that
we are discussing a decision that hasn't been made yet, and
someday it will be made, and we will assess the impact of it.
The third proposition I think is clearly established is
that asking the general counsel of the National Labor Relations
Board for his work product and his privileged communications
with his client in a pending matter or any matter is wrong and
should not have been done.
And the fourth proposition is that this is yet another
example of how we could have focused on the issue of creating
an environment where businesses and entrepreneurs could
actually address the number one problem in this country, which
is creating jobs, instead of talking about cases that haven't
been decided, asking people for information to which we are not
entitled, and sort of remarking on the fact that in a free
speech democracy, people sometimes say things that offend other
people.
I appreciate--I think the witnesses did contribute in a
meaningful and important way, and I appreciate their time and
their preparation, but I would, frankly, again urge that the
committee refocus our attention on the number one issue that we
hear about in our district, which is working together to create
jobs for the American people.
I yield back.
Chairman Roe. I thank the gentleman.
I agree with the gentleman that jobs are the single biggest
issue facing this country right now. I went back and reviewed
all of the recessions that have occurred, major recessions that
have occurred since 1945, and all--the four steepest ones when
we have come out of recession--and this is essentially 13
months past that time--we have come out, the GDP, about 7
percent higher than we went in and jobs about 4 percent, 4.7
percent higher than when we went in. So we came out pretty
steep after the deepest recessions.
And the two I remember, the first was 1973. I was in the
Army and Korea, and I got heat 3 hours a day. People here stood
in gas lines in this country. In 1981, we had a very steep
recession, and the same thing occurred then. This particular
recession, our GDP is up about a 10th of a percent. That is why
when you ask people, is this recession over--go ask when you
get home to your constituents, is this recession over, and no
one will raise their hand. And the reason is because they can't
find a job, and the reason they can't find a job is that our
job creation is 5 percent lower than where it was. We are 7
million jobs below when we started this recession.
And for the life of me, I am trying to figure out how
harassing Mr. Bego for 3 years when he said it cost him $1
million and he could have created potentially 20, 30, 40, 50
jobs, how that helps with job creation, and that is my
situation here and my concern here, I mean. I think certainly
workers need to be protected, no doubt. I put on a uniform and
left this country so that you would have a right to a secret
ballot.
My wife claims she voted for me in the election, but I
don't know that for sure because it is a secret ballot, and
that is the way it should be. The President is elected that
way. The Congress is elected that way. The union members are
elected that way. And that is exactly the right we want to
protect.
And I think you all so much for coming today. It was a
great hearing. You all did a wonderful job. Without any further
comments, this meeting is adjourned.
[Additional submissions of Chairman Roe follow:]
Prepared Statement of Bill Ritsema, President, Ritsema Associates
Chairman Roe, Ranking Member Andrews and members of the
Subcommittee on Health, Employment, Labor and Pensions: Thank you for
the opportunity to submit my testimony today to your subcommittee. My
company has been adversely impacted by the Michigan Regional Council of
Carpenters (MRCC) union as they have singled-out our small business for
no concrete reason and use methods such as letters, picket lines and
``bannering'' at several of our high profile job sites. Congress needs
to put an end to the currently allowed harassment practices on small
businesses that are based on no merit.
My name is Bill Ritsema, and I am the President of Ritsema
Associates which is a second generation merit shop specialty contractor
that has been in business since 1955. We are a family owned business
that has a strong reputation in Michigan for providing a quality
product and providing quality benefits and pay to our employees.
On July 13, 2010, we received a letter that stated the carpenters'
union had investigated our wages and benefits and deemed that they were
lower than the area standard. Coincidentally, our business did not
provide them with any wage and benefit information nor have our
employees submitted a survey to them directly. They are attempting to
blackmail us into providing them with proprietary information intended
to be used for their own benefit with the threat of harassment to our
customers and business. They requested that we fill out our wage
structure and send it back to them within seven days. See exhibit 1.
Instead of filling out their forms, we sent them a response letter on
July 23, 2010 asking to see the results from their investigation of our
wages and benefits. See exhibit 2. Interestingly, they did not send us
the results of their investigation of our own wages and benefits.
To date, the union has no recorded complaint filed with the
National Labor Relations Board (NLRB). However, the union began a
harassment campaign by sending letters to more than one dozen of
Ritsema Associates' customers claiming a ``Notice of Labor Dispute.''
The letter requests of customers, ``[W]e are asking that you use your
managerial direction to not allow these non area standard contractors
to perform any work on any of your projects unless and until they
generally meet area labor standards for all their carpentry craft
work.'' The MRCC is attempting to remove our carpenters off the job
site even though they do not represent our carpenters or have
legitimate cause. While this was couched as a request from the MRCC,
the union also informed the customers that there would be adverse
impacts if they continued using the employees of Ritsema Associates.
``We want you to be aware that our new and aggressive public
information campaign against this company will unfortunately impact all
parties associated with projects where they are employed,'' the notice
warns. The impact is defined as ``highly visible'' banner displays and
``distribution of handbills'' at the job sites of Ritsema Associates'
customers. Shortly thereafter, large banner displays manned by teams of
demonstrators did begin to appear outside of several job sites where
employees of Ritsema Associates were working.
When asked, the banner holders denied being employed by Ritsema
Associates, the customer or any of the other contractors on the job
site. They stated that they were not carpenters and not members of the
MRCC union. They would only state that they had been hired by the MRCC
to ``hold the banner.'' Additionally, video interviews done by the
Mackinac Center for Public Policy confirm that the union hired homeless
individuals from a shelter in downtown Grand Rapids. Committee members
can view the videos at the following web addresses:
http://www.youtube.com/watch?v=JUwy_Ot1d4I and
http://www.youtube.com/watch?v=Ndb_xGkZY5w
The union has been ``bannering'' and picketing many of our
construction sites claiming that we do not pay the area standard wages,
health benefits and pension to all of our employees. What they say on
our job sites essentially mirrors what their letters say and are
patently false. The union was actually picketing right outside a cancer
center where cancer patients were resting and, according to the
hospital's lawyer, were doing so illegally.
The MRCC has also sent letter to our customers' clients that are
filled with lies, approximately 60 letters have been sent. See exhibit
3 (Standard letter). Nearly every statement they claim as a fact is in
reality fiction. Additionally, Kathy Hoekstra from the Mackinac Center
for Public Policy has a union representative on video accusing us of
hiring illegal aliens, which is also false.
Customers have stopped using Ritsema Associates in order to make
the MRCC demonstrations stop. Demonstrations that are unfounded and
based on no proof. To be clear, I have never spoken with anyone from
the MRCC union. The dispute that they have with our small business is
based on ulterior motivations rather than facts.
Congress needs a legislative solution to stop the currently legal
practice of harassment and lies. These current practices allowable by
the National Labor Relations Board (NLRB) are destroying business and
have given the unions the right to harass good long-standing companies
such as our own.
Ritsema Associates pays a superior package of wages and benefits to
our employees. We are also very competitive and, accordingly, are able
to provide the kind of job security that allows our employees to earn
fair wages and benefits on a consistent basis. We provide our employees
with a quality benefit package that includes a financially sound health
plan and a 401(k) plan where every dollar that goes in belongs to our
employees. Our company and customers have been needlessly harmed by the
acts of harassment by the Michigan Regional Council of Carpenters.
These acts have no merit or basis other than to damage our reputation
and therefore harm our workers.
______
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[Additional submissions of Mr. Andrews follow:]
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INDIANAPOLIS CLERGY COMMITTEE
A Project of Interfaith Worker Justice
In accordance with our various faith traditions, we believe that
dignity and just compensation are essential human rights for all
workers. As religious leaders, God has called us to share a vision of
reconciliation and economic equality. We invite business, labor, and
political leaders to work together to make this vision a reality for
the workers in our city.
STATEMENT OF PRINCIPLES
Therefore, we call upon business leaders to enact polices and
practices for janitors and all low-wage workers, whether they are
direct employees or contracted out, which will:
Pay a living wage that allows workers to meet the basic
needs of their families.
Provide full health care benefits for workers and their
families at an affordable rate.
Prevent tactics which intimidate workers who want to join
a union.
Negotiate in good faith. We call upon labor leaders to:
Make the needs of low-wage workers their primary concern.
Be honest about services provided.
Negotiate in good faith.
It is our prayer that the economic inequality in our city can be
overcome through cooperation. It is our commitment to stand up for the
rights of all low-wage workers. It is our calling to keep before this
city a vision of God's justice and mercy.
Bishop Michael J. Coyner,
Indiana Area of The United Methodist Church;
Rev. Stephen Gray, Regional Minister,
Indiana-Kentucky Conf., United Church of Christ;
Rev. Dick Hamm, former Genl Min & Pres.,
Christian Ch, Disciples of Christ, US, Canada;
Rev. Richard L. Spleth, Regional Minister,
Christian Church (Disciples of Christ) Indiana;
Bishop Catherine Waynick,
Episcopal Diocese of Indianapolis;
Rev. Mmoja Ajabu,
Light of the World Christian Church;
Rev. Chad Abbott,
Lockerbie Central United Methodist Ch.;
Rev. Michael Alexander,
Aldersgate United Methodist Church;
Rev. Laurie Adams,
Christian Church (Disciples of Christ);
Rev. Dr. Ronald J. Allen,
Christian Theological Seminary;
Dr. Preston Adams, III,
Light of the World Christian Church
Rev. Kevin R. Armstrong,
North United Methodist Church;
Rabbi Jon Adland,
Indianapolis Hebrew Congregation.
INDIANAPOLIS CLERGY COMMITTEE
A Project of Interfaith Worker Justice
Rev. Sharon Baker, Lockerbie Central United Methodist
Rev. Louise Baldwin Rieman, Northview Church of the Brethren
Rev. Phil Baldwin Rieman, Northview Church of the Brethren
Pastor Stan Banker, Indianapolis First Friends (Quaker)
Minister Oscar E. Banks, IV, Light of the World Christian Church
Rev. Robert S. Bates, Christian Church (Disciples of Christ)
Rev. Dr. John Bean, Downey Ave. Christian Church
Rev. Johnson A. Beaven III, Citadel of Faith Church of God in Christ
Fr. Carlton Beever, St. Philip Neri Catholic Church
Fr. Justin Belitz, O.F.M., Archdiocese of Indianapolis
Bishop T. Garrott Benjamin, Light of the World Christian Church
Rev. Jeffrey Bessler, Christ Church Cathedral (Episcopal)
Mr. J. Brent Bill, Religious Society of Friends (Quakers)
Rev. Howard Boles, Roberts Park United Methodist Church
Rev. Rayford Brown, Rock of Faith Missionary Baptist Church
Rev. Kent Burcham, Edgewood United Methodist Church
Rev. Larry Bush, Amity United Methodist Church
Rev. Audrey Borschel, Christian Church (Disciples of Christ)
Rev. Bob Cannon, Danville United Methodist Church
Rev. Dr. James M. Capers, Lamb of God Church (ELCA)
Rev. Patricia Case, Christian Church (Disciples of Christ)
Fr. Tom Clegg, Sacred Heart Catholic Church
Rev. Richard Clough, First Congregational Church
Rev. Clarinda Crawford, Bradley United Methodist Church
Fr. Larry P. Crawford, St. Gabriel the Archangel Catholic Ch.
Rev. Darrel Crouter, Central Christian Church
Rev. Canon Kate Cullinane, Christ Church Cathedral (Episcopal)
Rev. Darren Cushman-Wood, Speedway United Methodist Church
Rev. Clement T. Davis, St. Bartholomew Catholic Church
Rev. Garnett Day, Downey Ave Christian Church
Rev. Jean Denton, St. Paul's Episcopal Church
Rev. Brian Durand, St. Luke's United Methodist Church
Rabbi Sandy Eisenberg-Sasso, Congregation Beth-El Zedeck
Rev. Pat Engel, Epworth United Methodist Church
Rev. Ed Fischer, Trinity United Methodist Church
Fr. Tom Fox, O.F.M., Archdiocese of Indianapolis
Rev. Joseph Freeman, Sr., Christ the Savior Lutheran Church
Rev. Carol Fritz, Sheridan United Methodist Church
Rev. Dr. Daniel Gangler, Indiana Area, United Methodist Church
Rev. James Gentry, Indiana Area Fdtn., United Methodist Ch.
Rev. Henry Gerner, United Methodist Church
Rev. John Gibson, United Methodist Church
Rev. Betty Gilbert-Griffin, Immanuel Presbyterian Church
Fr. Jeffrey Godecker, Immaculate Heart Catholic Church
Rev. Ronald Goldfarb, St. Timothy's Episcopal Church
Fr. Todd Goodson, St. Ambrose Catholic Church
Rev. C. Mac Hamon, Castleton United Methodist Church
Rev. Dr. Adolf Hansen, St. Luke's United Methodist Church
Rev. Holly Hardsaw, Horizons of Faith United Methodist
Rev. Charles Harrison, Barnes United Methodist Church
Rev. C.J. Hawking, United Methodist Church
Rev. Rosella Helms, St. Mark's Carmel United Methodist Ch.
Rev. Dr. James Higginbothham, Earlham School of Religion
Rev. Aaron Hobbs, New Market United Methodist Church
Rev. James P. Hollis, Westview Christian Church
Rev. Jonathan Hutchinson, St. David's Episcopal Church
Rev. Bill Johnson, Avon United Methodist Church
Rev. William Keith, Indianapolis East, United Methodist Ch.
Rev. Karen King, Trinity Episcopal Church
Rev. Keith Kriesal, Our Redeemer Lutheran Church
Rev. Douglas Kriz, Speedway Christian Church
Rev. Thomas M. Kryder-Reid, Trinity Episcopal Church
Sr. Mary Ann Lechner, S.P., Sisters of Providence
Rev. Meredith Loudon, United Church of Christ
Rev. Zoila Manzanares, Christ Church Cathedral (Episcopal)
Rev. Mike Mather, Broadway United Methodist Church
Fr. John McCaslin, St. Anthony, Holy Trinity Catholic Ch.
Rev. Linda McCrae, Central Christian Church
Rev. Greg McGarvey, Carmel United Methodist Church
Rev. Linda McKiernan-Allen, First Christian Church, New Castle
Rev. Kent Millard, St. Luke's United Methodist Church
Rev. Jack Miller, Epworth United Methodist Church
Rev. Dr. Richard Moman, Christian Theological Seminary
Pastor James Mulholland, Irvington Friends Meeting
Rev. Wayne Nichols, Faith United Methodist Church
Rev. William Nottingham, Disciples of Christ, United Ch. of Christ
Rev. Bill Novak, Bethlehem Lutheran Church
Fr. Arturo Ocampo, O.F.M., St. Patrick Catholic Church
Fr. Michael E. O'Mara, St. Mary Catholic Church
Rev. David Penalva, Vida Nueva United Methodist Church
Rev. Mark J. Powell, Christian Theological Seminary
Fr. Marty Peters, Archdiocese of Indianapolis
Rev. Bonnie Plybon, Victory United Methodist Church
Rev. Steve Rasmussen, Union Chapel United Methodist Church
Rev. Robert Reister, Allisonville Christian Church
Fr. Joseph G. Riedman, Holy Spirit Catholic Church
Rev. Leon Riley, Central Christian Church
Rev. Gwendolyn Roberts, Metro Ministries, United Methodist Ch.
Imam Michael Saahir, Nur-Allah Islamic Center
Rabbi Dennis Sasso, Congregation Beth-El Zedeck
Rev. Michael Scaife, New Light Christian Church
Rev. Lisa Schubert, North United Methodist Church
Rev. Steven C. Schwab, St. Thomas Aquinas Catholic Church
Rev. Canon David I. Shoulders, The Episcopal Church
Rev. David J. Smith, Abundant Grace Evangelical Lutheran
Rev. Dr. L. Wayne Smith, Abundant Harvest United Methodist Ch.
Rev. Diane Spleth, Franklin Central Christian Church
Rev. Ned Steele, Indianapolis West, United Methodist Ch.
Rev. Kevin Stiles, Cumberland United Methodist Church
Rev. Dan Strobel, St. Andrew's Lutheran Church
Rev. George Sullivan-Davis, Christian Church (Disciples of Christ)
Rev. John Thomas, New Palestine United Methodist Church
Rev. Edgar A. Towne, emeritus, Christian Theological Seminary
Rev. Randall Updegraff, Spleth Geist Christian Church
Rev. Laurin Vance, Salem Lutheran Church
Rev. Art Vermillion, Christian Theological Seminary
Rev. Doug Walker, Rosedale United Methodist Church
Rev. Reid Walker, Zionsville United Methodist Church
Rev. Rodger Ward, Mace/New Ross United Methodist
Rabbi Lewis Weiss, Indianapolis Jewish Community
Fr. Christopher Weldon, All Saints Catholic Church
The Rev. William D. Wieland, St. Andrew's Episcopal Church
Rev. Kirsteen Wilkinson, St. Alban's Episcopal Church
Rev. Canon Alfredo Williams, Christ Church Cathedral (Episcopal)
Rev. Richard Willoughby, Promise Land Christian Church
Rev. David Wise, Otterbein United Methodist Church
Rev. Cynthia Wolfe, Bethel African Methodist Episcopal Ch.
Rev. Kevin Wrigley, Plainfield United Methodist Church
Rev. Amanda Yoder Schrock, First Mennonite Church
______
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[Questions submitted for the record and their responses
follow:]
U.S. Congress,
Washington, DC, August 5, 2011.
Mr. Jonathan C. Fritts,
Morgan Lewis, 1111 Pennsylvania Avenue, NW, Washington, DC 20004-2541.
Dear Mr. Fritts: Thank you for testifying at the May 26, 2011,
Subcommittee on Health, Employment, Labor, and Pensions hearing
entitled, ``Corporate Campaigns and the NLRB: The Impact of Union
Pressure on Job Creation.'' I appreciate your participation.
Enclosed are additional questions submitted by Committee members
following the hearing. Please provide written responses no later than
August 19, 2011, for inclusion in the official hearing record.
Responses should be sent to Benjamin Hoog of the Committee staff who
may be contacted at (202) 225-4527.
Thank you again for your contribution to the work of the Committee.
Sincerely,
Phil Roe, Chairman,
Subcommittee on Health, Employment, Labor, and Pensions.
QUESTIONS FROM REPRESENTATIVE ROBY
Representing a district that is in a Right-To-Work State, the
current activist agenda of the National Labor Relations Board greatly
concerns me. Congress has a responsibility to ensure the NLRB
objectively applies the law written by the people's elected
representatives. Congress must also work to ensure labor interests are
not undermining an employer's efforts to create jobs. At a time when
more than 14 million individuals are unemployed and searching for work,
public officials in Washington should look to provide greater certainty
to America's employers so they can grow their businesses and create new
jobs, not hinder them. Unfortunately, the recent rulings and
proceedings of the NLRB have demonstrated otherwise.
1. In your testimony you highlighted the controversial Boeing case
before the NLRB. In your opinion, does this case threaten Right-To-Work
states and their ability to compete with states that are Non-Right-To-
Work states?
2. If the NLRB rules in favor of the International Association of
Machinists & Aerospace Workers, do you foresee business owners less
likely to open or expand their businesses into Right-To-Work states?
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[Whereupon, at 11:58 a.m., the subcommittee was adjourned.]