[House Hearing, 116 Congress] [From the U.S. Government Publishing Office] PROTECTING THE RIGHT TO ORGANIZE ACT: MODERNIZING AMERICA'S LABOR LAWS ======================================================================= HEARING before the SUBCOMMITTEE ON HEALTH, EMPLOYMENT, LABOR, AND PENSIONS COMMITTEE ON EDUCATION AND LABOR U.S. HOUSE OF REPRESENTATIVES ONE HUNDRED SIXTEENTH CONGRESS FIRST SESSION __________ HEARING HELD IN WASHINGTON, DC, JULY 25, 2019 __________ Serial No. 116-37 __________ Printed for the use of the Committee on Education and Labor [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Available via the World Wide Web: www.govinfo.gov or Committee address: https://edlabor.house.gov ______ U.S. GOVERNMENT PUBLISHING OFFICE 37-329 WASHINGTON : 2020 COMMITTEE ON EDUCATION AND LABOR ROBERT C. ``BOBBY'' SCOTT, Virginia, Chairman Susan A. Davis, California Virginia Foxx, North Carolina, Raul M. Grijalva, Arizona Ranking Member Joe Courtney, Connecticut David P. Roe, Tennessee Marcia L. Fudge, Ohio Glenn Thompson, Pennsylvania Gregorio Kilili Camacho Sablan, Tim Walberg, Michigan Northern Mariana Islands Brett Guthrie, Kentucky Frederica S. Wilson, Florida Bradley Byrne, Alabama Suzanne Bonamici, Oregon Glenn Grothman, Wisconsin Mark Takano, California Elise M. Stefanik, New York Alma S. Adams, North Carolina Rick W. Allen, Georgia Mark DeSaulnier, California Lloyd Smucker, Pennsylvania Donald Norcross, New Jersey Jim Banks, Indiana Pramila Jayapal, Washington Mark Walker, North Carolina Joseph D. Morelle, New York James Comer, Kentucky Susan Wild, Pennsylvania Ben Cline, Virginia Josh Harder, California Russ Fulcher, Idaho Lucy McBath, Georgia Van Taylor, Texas Kim Schrier, Washington Steve Watkins, Kansas Lauren Underwood, Illinois Ron Wright, Texas Jahana Hayes, Connecticut Daniel Meuser, Pennsylvania Donna E. Shalala, Florida William R. Timmons, IV, South Andy Levin, Michigan* Carolina Ilhan Omar, Minnesota Dusty Johnson, South Dakota David J. Trone, Maryland Fred Keller, Pennsylvania Haley M. Stevens, Michigan Susie Lee, Nevada Lori Trahan, Massachusetts Joaquin Castro, Texas * Vice-Chair Veronique Pluviose, Staff Director Brandon Renz, Minority Staff Director ------ SUBCOMMITTEE ON HEALTH, EMPLOYMENT, LABOR, AND PENSIONS FREDERICA S. WILSON, Florida, Chairwoman Donald Norcross, New Jersey Tim Walberg, Michigan Joseph D. Morelle, New York Ranking Member Susan Wild, Pennsylvania David P. Roe, Tennessee Lucy McBath, Georgia Rick W. Allen, Georgia Lauren Underwood, Illinois Jim Banks, Indiana Haley M. Stevens, Michigan Russ Fulcher, Idaho Joe Courtney, Connecticut Van Taylor, Texas Marcia L. Fudge, Ohio Steve C. Watkins, Jr., Kansas Josh Harder, California Ron Wright, Texas Donna E. Shalala, Florida Dan Meuser, Pennsylvania Andy Levin, Michigan Dusty Johnson, South Dakota Lori Trahan, Massachusetts (VACANT) C O N T E N T S ---------- Page Hearing held on July 25, 2019.................................... 1 Statement of Members: Walberg, Hon. Tim, Ranking Member, Subcommittee on Health, Employment, Labor, and Pensions............................ 5 Prepared statement of.................................... 6 Wilson, Hon. Frederica S., Chairwoman, Subcommittee on Health, Employment, Labor, and Pensions.................... 1 Prepared statement of.................................... 4 Statement of Witnesses: Alvarez, Mr. Josue I., Misclassified Truck Driver for XPO Logistics.................................................. 27 Prepared statement of.................................... 29 Garden, Ms. Charlotte, J.D. LL.M, Co-Associate Dean for Research and Faculty Development and Associate Professor, Seattle University School of Law........................... 8 Prepared statement of.................................... 11 Griffin, Mr. Richard F. Jr., J.D. Counsel, Bredhoff and Kaiser, P.L.L.C............................................ 49 Prepared statement of.................................... 51 King, Mr. G. Roger, Senior Labor and Employment Counsel, HR Policy Association......................................... 32 Prepared statement of.................................... 34 Additional Submissions: Foxx, Hon. Virginia, a Representative in Congress from the State of North Carolina: Article: Big Labor's Big Shrink.......................... 73 Mr. King: Citation: 105 Cong. Rec. 5361 (1959)..................... 95 Prepared statement....................................... 150 Norcross, Hon. Donald, a Representative in Congress from the State of New Jersey: Chart: Productivity Growth and Hourly Compensation Growth, 1948-2015...................................... 78 Mr. Walberg: Letter dated April 12, 2019 from Congress of the United States................................................. 165 Letter dated May 16, 2019 from the Chamber of Commerce of the United States of America........................... 146 Letter dated June 10, 2019 from Coalition for a Democratic Workplace................................... 134 Letter dated July 24, 2019 from the International Franchise Association (IFA)............................ 139 Letter dated July 24, 2019 from the National Association of Home Builders (NAHB)................................ 141 Letter dated July 24, 2019 from the Internet Association. 174 Letter dated July 24, 2019 from TECHNET.................. 176 Letter dated July 24, 2019 from the Coalition for Workforce Innovation (CWI)............................. 182 Article: A Record Expansion's Surprise Winners: The Low- Skilled................................................ 184 Letter dated July 25, 2019 from the American Hotel and Lodging Association (AHLA)............................. 143 Letter dated July 25, 2019 from the Associated Builders and Contractors (ABC).................................. 144 Article: Faster Growth Is Paying Off for Low-Skilled Workers................................................ 188 Chart: Right To Work States Benefit From Faster Growth, Higher Real Purchasing Power - Winter 2019 Update...... 191 Report: Did right-to-work laws impact inequality?........ 193 Article: The 99% Get a Bigger Raise...................... 229 Article: The Link Between Wages and Productivity Is Strong................................................. 231 Chairwoman Wilson: Letter dated July 15, 2019 from Amalgamated Transit Union 106 Letter dated July 22, 2019 from LiUNA.................... 243 Letter dated August 7, 2019 from International Brotherhood of Teamsters............................... 107 Prepared statement from United Steelworkers (USW)........ 129 Questions submitted for the record Responses to questions submitted for the record by: Ms. Garden............................................... 248 Mr. Griffin.............................................. 252 PROTECTING THE RIGHT TO ORGANIZE ACT: MODERNIZING AMERICA'S LABOR LAWS ---------- Thursday, July 25, 2019 House of Representatives, Subcommittee on Health, Employment, Labor, and Pensions, Committee on Education and Labor, Washington, D.C. The subcommittee met, pursuant to call, at 10:15 a.m., in Room 2175, Rayburn House Office Building, Hon. Frederica Wilson [chairwoman of the subcommittee] presiding. Present: Representatives Wilson, Norcross, Morelle, Wild, McBath, Underwood, Stevens, Courtney, Harder, Shalala, Levin, Trahan, Scott Walberg, Roe, Allen, Fulcher, Taylor, Wright, Meuser, Johnson, and Keller.. Also Present: Representatives Foxx and Kennedy Staff Present: Tylease Alli, Chief Clerk; Jordan Barab, Senior Labor Policy Advisor; Ilana Brunner, General Counsel; Kyle deCant, Labor Policy Counsel; Emma Eatman, Press Assistant; Mishawn Freeman, Staff Assistant; Eli Hovland, Staff Assistant; Eunice Ikene, Labor Policy Advisor; Stephanie Lalle, Deputy Communications Director; Andre Lindsay, Staff Assistant; Jaria Martin, Clerk/Assistant to the Staff Director; Kevin McDermott, Senior Labor Policy Advisor; Richard Miller, Director of Labor Policy; Max Moore, Office Aide; Veronique Pluviose, Staff Director; Banyon Vassar, Deputy Director of Information Technology; Katelyn Walker, Counsel; Courtney Butcher, Minority Director of Coalitions and Members Services; Akash Chougule, Minority Professional Staff Member; Cate Dillon, Minority Staff Assistant; Rob Green Minority Director of Workforce Policy; Bridget Handy, Minority Communications Assistant; John Martin, Minority Workforce Policy Counsel; Hannah Matesic, Minority Director of Operations; Audra McGeorge, Minority Communications Director; Carlton Norwood, Minority Press Secretary; Brandon Renz, Minority Staff Director; and Ben Ridder, Minority Professional Staff Member. Also Present: Representatives Kennedy and Keller. Chairwoman Wilson. Good morning. The Subcommittee on Health, Employment, Labor, and Pensions will now come to order. Welcome, everyone. I note that a quorum is present. I note for the subcommittee that Representative Fred Keller of Pennsylvania be permitted to participate in today's hearing. I also note for the subcommittee that Representative Joseph Kennedy of Massachusetts will be participating in today's hearing with the understanding that his questions will come only after all members of the HELP Subcommittee, and any members of the full committee on both sides of the aisle who are present have had an opportunity to question the witnesses. Thank you for joining us. The subcommittee is meeting today in a legislative hearing to receive testimony on Protecting the Right to Organize Act: Modernizing America's Labor Laws. We call it the PRO Act. Pursuant to Committee Rule 7(c), opening statements are limited to the Chair and the Ranking Member. This allows us to hear from our witnesses sooner, and provides all members with adequate time to ask questions. I recognize myself now for the purpose of making an opening statement. Today, we are gathered for a legislative hearing on how the Protecting the Right to Organize Act, or PRO Act, would protect workers' rights to organize unions in the modern economy. We had a hearing on the PRO Act just a few months ago. It is rare to have a second hearing so soon. But here we are today, making this issue, that is so important. This is a fight that we must engage in together on behalf of our hard-working Americans. They are our constituents, and they are counting on us to fight for them so that they can, in turn, fight for themselves and their families; fight to earn decent wages and benefits that enable them to care for their families, extended families, and for themselves. And I want to implore all of my colleagues on the committee to become co-sponsors of this legislation, and then encourage all of the members of their respective delegations to sign on so that we can get this bill to the floor. Talk about this legislation during the August recess. I recently made a presentation before the Teamsters so we can get the word out to workers that we are on their side. This is a fight that we must fight in a consistent manner; and if we have to hold a third hearing on why the PRO Act is so urgently needed, we will do that. So, let's do everything we can to keep the public, our congressional colleagues, the National Labor Relations Board, and others, informed until everyone understands just how important this legislation is. Unions are essential for there to be dignity in and on the job. Protecting the right to organize is critical for reversing decades of wage stagnation and income inequality. Yet, the rapidly changing relationship between employers and employees is undermining workers' ability to negotiate for better wages, benefits, and working conditions. Today's workers are increasingly hired not as full-time employees with middle-class jobs, but as independent contractors and permatemps. As our witnesses will testify today, employers exploit ambiguities and loopholes in the NLRA to prevent their employees from organizing unions, even though those employers control the terms and conditions of employment for their subcontracted employers. Rather than working to strengthen the right to organize in this changing economy, corporate interests and their allies in the Trump administration are exploiting weaknesses in this outdated law to aid their assault on workers' rights. For example, under the Trump administration, the National Labor Relations Board has further enabled employers to misclassify their employees. Earlier this year, the NLRB denied SuperShuttle drivers employee status because of their alleged entrepreneurial opportunity, even though SuperShuttle prohibited workers from using their vehicles to work for any competitor. And what if a worker has multiple employers? As our witnesses will testify, for many workers, the name on the door of the building where they work is not the name of the company that signs their paycheck. Thanks to the 2015 NLRB decision, known as Browning-Ferris, both the user of permatemps and the supplier of permatemps can have a responsibility to collectively bargain with employees, since they jointly control directly and through contractual provisions. These terms and conditions of employment for permatemps, that joint control, makes them joint employers. However, despite an appeals court ruling that affirming this decision on the definition of a joint employer, the Trump administration is continuing its efforts to obliterate the court's direction through rulemaking. As the workplace becomes increasingly splintered, we must protect employees' First Amendment rights to free speech and protests, in addition to preventing employers from invading their legal obligations. The NLRA currently impairs workers' First Amendment rights by barring them from protesting for their right to unionize, and from standing in solidarity with workers from other employers, which would be otherwise constitutionally protected. These laws prevent workers from peacefully protesting companies that do business with unscrupulous employers. As work relationships become more complicated, the First Amendment becomes even more essential for those workers to advocate for better pay and better conditions. But the Trump administration is seizing upon current law to further undermine workers' rights. The Republican General Counsel of the NLRB recently argued that workers break the law when they use balloon animals while peacefully protesting. This makes a mockery of our First Amendment. The organization of the workplace becomes even more splintered, and employers are able to exploit these arrangements to eviscerate workers' rights. The Federal government has a responsibility to ensure that labor law continues to protect workers. The PRO Act would help achieve this goal by modernizing labor law to meet the challenges facing today's workers. The PRO Act would prevent the misclassification of employees by codifying a clear standard for when a worker is an employee or an independent contractor. The PRO Act also clarifies the standard for determining joint employment so that employers cannot evade their obligations under labor law. By codifying the NLRB's current standard, workers can hold each of their employees accountable under the law, and the PRO Act protects workers' First Amendment rights by repealing prohibitions on peaceful union picketing to guarantee organizing workers the same freedom of speech to which all Americans have a right. By passing the PRO Act, Congress and this committee would modernize our Nation's foundational labor law to ensure that all workers can join together and bargain with employers for better pay and working conditions. I look forward to hearing from our witnesses and the discussion that will ensue. I now recognize the Ranking Member, Mr. Walberg, for an opening statement, the esteemed Mr. Walberg. [The statement of Ms. Wilson follows:] Prepared Statement of Hon. Frederica S. Wilson, Chairwoman, Subcommittee on Health, Employment, Labor, and Pensions Today, we are gathered for a legislative hearing on how the Protecting the Right to Organize Act, or PRO Act, would protect workers' rights to organize unions in the modern economy. Unions are essential for there to be dignity in the on the job. Protecting the right to organize is critical for reversing decades of wage stagnation and income inequality. Yet, the rapidly changing relationship between employers and employees is undermining workers' ability to negotiate for better wages, benefits, and working conditions. Today's workers are increasingly hired--not as full-time employees with middle class jobs-- but as independent contractors and permatemps. As our witnesses will testify, employers exploit ambiguities and loopholes in the N-L-R-A to prevent their employees from organizing unions--even though those employers control the terms and conditions of employment for their subcontracted employees. Rather than working to strengthen the right to organize in this changing economy, corporate interests and their allies in the Trump administration are exploiting weaknesses in this outdated law to aid their assault on workers' rights. For example, under the Trump Administration, the National Labor Relations Board, or N-L-R-B, has further enabled employers to misclassify their employees. Earlier this year, the N-L-R-B denied SuperShuttle drivers employee status because of their alleged ``entrepreneurial opportunity,'' even though SuperShuttle prohibited workers from using their vehicles to work for any competitor. And what if a worker has multiple employers? As our witnesses will testify, for many workers, the name on the door of the building where they work is not the name of the company that signs their paycheck. Thanks to a 2015 N-L-R-B decision, known as Browning-Ferris, both the user of permatemps and the supplier of permatemps would have a responsibility to collectively bargain with employees, since they jointly control-- directly and through contractual provisions--the terms and conditions of employment for permatemps. That joint control makes them ``joint employers.'' However, despite an Appeals Court ruling that affirming this decision on the definition of a joint employer, the Trump administration is continuing its efforts to obliterate the court's direction through a rulemaking. As the workplace becomes increasingly fissured, we must protect employees' First Amendment rights to free speech and protest, in addition to preventing employers from evading their legal obligations. The N-L-R-A currently impairs workers' First Amendment rights by barring them from protesting for their right to unionize and from standing in solidarity with workers from other employers, which would be otherwise constitutionally protected. These laws prevent workers from peacefully protesting companies that do business with unscrupulous employers. As work relationships become more complicated, the First Amendment becomes even more essential for those workers to advocate for better pay and conditions. But the Trump administration is seizing upon current law to further undermine workers' rights. The Republican General Counsel of the N-L-R- B recently argued that workers break the law when they use balloon animals while peacefully protesting. This makes a mockery of our First Amendment. The organization of the workplace becomes even more fissured and employers are able to exploit these arrangements to eviscerate workers' rights. The federal government has a responsibility to ensure that labor law continues to protect workers. The PRO Act would help achieve this goal by modernizing labor law to meet the challenges facing today's workers. The PRO Act would prevent the misclassification of employees by codifying a clear standard for when a worker is an employer or an independent contractor. The PRO Act also clarifies the standard for determining joint employment so that employers cannot evade their obligations under labor law. By codifying the N-L-R-B's current standard, workers can hold each of their employers accountable under the law. And, the PRO Act protects workers' First Amendment rights by repealing prohibitions on peaceful union picketing, to guarantee organizing workers the same freedom of speech to which all Americans have a right. By passing the PRO Act, Congress and this Committee would modernize our nation's foundational labor law to ensure that all workers can join together and bargain with employers for better pay and working conditions. I look forward to hearing from out witnesses today and the discussion that will ensue. I now recognize the Ranking Member, Mr. Walberg, for an opening statement. ______ Mr. Walberg. I thank the gentlelady. And I thank you for this hearing. I think this is going to be a good hearing, and I appreciate the opportunity for the give and take that will go on. Thanks to a skyrocketing economy -- and I think that is evident all across the board -- propelled by recent tax cuts, innovation, regulatory reform, and American enterprise with great workers throughout the country doing the jobs that only they can do, workers throughout this country are experiencing record-breaking success and opportunity. While workers' lives are improving, union membership rates have steadily plummeted, suggesting what Democrats refused to acknowledge, that strong workers, strong union workers, as well, and not strong union bosses lead to economic prosperity. Workers' disenchantment with union representation has created a real crisis for union leaders who, instead of increasing transparency and accountability to serve their members better, continued to exert their political influence by demanding radical national labor laws. Union bosses and the Democrats who have their support want to use the power of government to further consolidate control, coerce workers, and bolster their personal agendas; and as evidenced by steadily declining union membership rates, that doesn't sit well with American workers. The bill we are here to discuss today, H.R. 2474, the Protecting the Right to Organize Act, or the PRO Act, is a sweeping labor union boss wish list designed to appeal to liberal Democrat primary voters, rather than American workers in a modern workplace. This legislation is based not on the innovative 21st century economy we are fortunate enough to enjoy today, but on the economic and workplace realities of the 1930s when my father was helping to organize labor at steel mills in Chicago. It increases the coercive power of big labor at the expense of workers and business owners. Among the list of dangerous one-sided provisions, the bill contains a card check scheme, the same undemocratic concept that was rejected by Congress the last time Democrats were in power. If a union loses an election, the legislation requires employers to prove they did not interfere in the election's results, a nearly-impossible standard to demonstrate, which defies our nation's long-held principle that you are innocent until proven guilty. If an employer is unable to prove that it didn't interfere, a union is automatically ushered into the workplace without ever winning a secret ballot election. Americans select their representation in Congress by secret ballot, and congressional Democrats select their own leadership by secret ballot. But today, they seek to deny the same right to Americans in the workplace. Where is the logic in that? Remarkably, the bill also requires employers to turn over workers' personal information. I wouldn't want that. The workers I know don't want that. They don't want me to know their personal information, or call their personal phone cells. This information includes their home addresses, cell phone and land line numbers, personal email addresses, and more without workers ever having a say in the matter. It also bans state right-to-work laws, enacted by state legislators and/or citizens to allow workers to decide for themselves whether to join and pay a union, laws that have resulted in more jobs and higher incomes for workers since being enacted in 27 states, including my home state of Michigan. The radical and coercive policies in this legislation are blatantly anti-worker and blatantly pro-union boss. Democrats are claiming that this bill will modernize labor law. In reality, H.R. 2474 amounts to little more than forcing more workers into one-size-fits-all union contracts, and returning to a stale and old-fashioned 1930s-era view of the American economy and workforce. Unlike this antiquated, anti-growth special interest viewpoint, Republicans believe that true modernization means expanding entrepreneurial opportunity and embracing flexible work arrangements and ensuring that union bosses are truly accountable to the workers they claim to represent. There is nothing progressive or modern about what Democrats are proposing in this bill. History has shown us that individual opportunity, innovation, and economic growth are what lead to real progress and prosperity for American workers. Americans are benefiting from the strong economy ushered in by Republican-led tax and regulatory reform. Wages are rising, unemployment is at near-record lows, and millions of jobs have been created since President Trump took office. But the anti-worker freedom bill being discussed today would threaten this progress. Instead of more freedom and opportunity, it promises more coercion and red tape. Republicans on this committee will continue to stand with workers and promote individual freedom and pro-growth economic policies as the best path forward for workers, the best workers in the world, and job seekers for increased jobs throughout this country. As I said, Madam Chairwoman, I appreciate this hearing. It will be good discussion, even with disagreement; but we have to recognize the reality of what we are doing. And I yield back. [The statement of Mr. Walberg follows:] Prepared Statement of Hon. Tim Walberg, Ranking Member, Subcommittee on Health, Employment, Labor, and Pensions Thanks to a skyrocketing economy propelled by recent tax cuts, innovation, and American enterprise, great workers throughout the country are experiencing record-breaking success. While workers' lives are improving, union membership rates have steadily plummeted, suggesting what Democrats refuse to acknowledge: that strong workers- strong union workers as well- and not strong union bosses, lead to economic prosperity. Workers' disenchantment with union representation has created a real crisis for union leaders, who instead of increasing transparency and accountability to serve their members better, continue to exert their political influence by demanding radical national labor laws. Union bosses--and the Democrats who have their support--want to use the power of government to further consolidate control, coerce workers, and bolster their personal agendas. And as evidenced by steadily declining union membership rates, that doesn't sit well with American workers. The bill we're here to discuss today, H.R. 2474, the Protecting the Right to Organize Act (PRO Act), is a sweeping labor union boss wish- list designed to appeal to liberal Democrat primary voters rather than American workers in a modern workplace. This legislation is based not on the innovative 21st century economy we are fortunate enough to enjoy today, but on the economic and workplace realities of the 1930's, when my father was helping organize labor at the steel mills in Chicago, and it increases the coercive power of Big Labor at the expense of workers and business owners. Among a list of dangerous one-sided provisions, the bill contains a ``card-check'' scheme, the same undemocratic concept that was rejected by Congress the last time Democrats were in power. If a union loses an election, the legislation requires employers to prove they did not interfere in the election's results--a nearly impossible standard to demonstrate, which defies our nation's long-held principle that you are innocent until proven guilty. If an employer is unable to prove that it didn't interfere, a union is automatically ushered into the workplace, without ever winning a secret ballot election. Americans select their representation in Congress by secret ballot, and Congressional Democrats select their own leadership by secret ballot, but today they seek to deny that same right to Americans in the workplace. Where is the logic in that? Remarkably, the bill also requires employers to turn over workers' personal information. I wouldn't want that. The workers I know don't want that. This information includes their home addresses, cellphone and landline numbers, personal email addresses, and more--without workers ever having a say in the matter. It also bans state right-to- work laws, enacted by state legislators and/or citizens, that allow workers to decide for themselves whether to join and pay a union--laws that have resulted in more jobs and higher incomes for workers since being enacted in 27 states, including my home state of Michigan. The radical and coercive policies in this legislation are blatantly anti-worker, and blatantly pro-union boss. Democrats are claiming that this bill will ``modernize'' labor law. In reality, H.R. 2474 amounts to little more than forcing more workers into one-size-fits-all union contracts and returning to a stale and old-fashioned 1930s-era view of the American economy and workforce. Unlike this antiquated, anti- growth, special interest viewpoint, Republicans believe that true modernization means expanding entrepreneurial opportunity and embracing flexible work arrangements and ensuring that union bosses are truly accountable to the workers they claim to represent. There is nothing ``progressive'' or ``modern'' about what the Democrats are proposing in this bill. History has shown us that individual opportunity, innovation, and economic growth are what lead to real progress and prosperity for American workers. Americans are benefiting from the strong economy ushered in by Republican-led tax and regulatory reform. Wages are rising, unemployment is at near-record lows, and millions of jobs have been created since President Trump took office. But the anti-worker bill being discussed today would threaten this progress. Instead of more freedom and opportunity, it promises more coercion and red tape. Republicans on this Committee will continue to stand with workers and promote individual freedom and pro-growth economic policies as the best path forward for workers and job-seekers throughout the country. ______ Chairwoman Wilson. Thank you, Mr. Walberg. Without objection, all other members who wish to insert written statements into the record may do so by submitting them to the committee clerk electronically in Microsoft Word format by 5:00 p.m. on August 7, 2019. I will now introduce our witnesses. Welcome to you, and thank you so much for coming. Ms. Charlotte Garden is a Professor of Labor and Constitutional Law at Seattle University School of Law. Welcome. Mr. Josue Alvarez is a truck driver for XPO Logistics from Bell Gardens, California. Thanks for traveling so far. Mr. Roger King is a Senior Labor and Employment Counsel with the HR Policy Association. Thank you. Mr. Richard F. Griffin, Jr., is of counsel at the law firm of Bredhoff & Kaiser, PLLC. He also served as a Board Member and as General Counsel for the National Labor Relations Board. Welcome. We appreciate all of the witnesses for being here today, and we all look forward to your testimony. Let me remind the witnesses that we have read your written statements, and they will appear in full in the hearing record. Pursuant to committee rule 7(d) and committee practice, each of you is asked to limit your oral presentation to a five- minute summary of your written statement. Let me also remind the witnesses that pursuant to Title 18 of the U.S. Code, Section 101, it is illegal to knowingly and willfully falsify any statement, representation, writing, document, or material fact presented to Congress, or otherwise conceal or cover up a material fact. Before you begin your testimony, please remember to press the button on the microphone in front of you so that it will turn on and the members can hear you. As you begin to speak, the light in front of you will turn green. After 4 minutes, the light will turn yellow, to signal that you have one minute remaining. When the light turns red, your five minutes have expired; and we ask that you please wrap it up so I will not have to gavel you. We will let the entire panel make their presentations before we move to member questions. When answering a question, please remember to, once again, turn your microphone on. I will first recognize Ms. Garden. STATEMENT OF CHARLOTTE GARDEN, J.D., LL.M, CO-ASSOCIATE DEAN FOR RESEARCH & FACULTY DEVELOPMENT AND ASSOCIATE PROFESSOR, SEATTLE UNIVERSITY SCHOOL OF LAW Ms. Garden. Thank you. Madam Chair Wilson, Ranking Member Walberg, and members of the subcommittee, thank you for the opportunity to testify today about the need to expand the protections of labor law, and to ensure that workers and unions can robustly exercise their First Amendment rights to engage in collective action. My name is Charlotte Garden. I am an associate professor at Seattle University School of Law, where I teach labor law and constitutional law. My testimony today focuses on two reasons that the NLRA falls short of its promise to restore to workers equality of bargaining power and full freedom of association. First, the NLRA curtails workers' and unions' rights of free speech, association, and assembly, by prohibiting certain secondary protests. Second, it doesn't do enough to respond to workplace fissuring, including through subcontracting and misclassification. I want to make two points regarding the NLRA's ban on certain secondary activity, which generally covers strikes and picketing, aimed at persuading businesses or consumers not to do business with an employer with whom a union has a labor dispute. First, in fissured workplaces, this restriction can force workers to act irrationally, focusing their attention on the small entities that are technically their employers, rather than the larger entities that exercise the most effective control over their working conditions. Second, this restriction on how workers and unions can protest is in tension with modern First Amendment case law. Both points are illustrated by a recent NLRB decision in Preferred Building Services. In Preferred, a group of janitors supported by a labor union picketed and passed out literature detailing bad treatment they had faced at work including, sexual harassment by their supervisor. Naturally, they did this outside the place they went to work every day. That was an office building managed by a company called Harvest, but Harvest didn't employ the janitors directly. Instead, it contracted with Preferred Building Services, which, in turn, contracted with a smaller janitorial company called OJS. It was OJS that signed the workers' paychecks, and it was OJS that fired the workers shortly after they sought to draw attention to harassment and the other problems they faced at work. An administrative law judge found that the workers should get their jobs back and other relief; but the NLRB disagreed, concluding that the workers picketing lost NLRA protection because it sought to coerce Harvest or building tenants. To say the least, it is counterintuitive that labor law would not protect workers picketing at their job site to improve fundamental working conditions, such as the right to work free of sexual harassment. But in the modern economy, large companies often contract out parts of their operations, including their janitorial services, sometimes to small firms that work for a small number of clients or maybe just one client. In this scenario, the large companies maintain effective control over wages and working conditions. So, if you imagine a small janitorial firm that squeezed between workers demanding higher pay, and a main client demanding lower overhead, I know which side will win every time. Yet, labor law expects workers to keep their picketing focused on their small employer, and not the large company that employer contracts with. In short, law allows employers to strategically manage their operations through interconnected contractual relationships. It shouldn't then limit how workers respond to the effects of those relationships. Second, the NLRA's prohibition on secondary activity raises serious First Amendment problems. Those problems are especially apparent in recent cases. For example, the Board's General Counsel's office has recently argued that unions' use of inflatable rats and other animals either qualifies as picketing or is otherwise coercive, and that these balloons violate the NLRA when used for a secondary purpose. In one recent case, the General Counsel's office argued that a, quote, ``huge, menacing inflatable rat placed near a business entrance . . . inherently conveys a threatening and coercive message that will restrain a person.'' But even more restrained interpretations of the NLRA's secondary activity ban raised serious First Amendment problems that have only deepened in recent years. The Supreme Court has struck down limits on other forms of protest, including civil rights boycotts, picketing at funerals, and anti-abortion sidewalk counseling. It has increasingly found that legal restrictions on the speech of corporate entities are suspect. Yet, the secondary activity ban limits what unions can say on picket signs, ignoring the reality that today, union pickets rely on moral persuasion rather than coercion. The PRO Act appropriately responds to these problems by excising limits on secondary and recognitional protests under the NLRA, and it blunts some forms of workplace fissuring by adopting a more straightforward and predictable method of distinguishing employees from independent contractors and retaining the current definition of joint employer. Thank you for the opportunity to testify. [The statement of Ms. Garden follows:] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Chairwoman Wilson. Thank you, Ms. Garden. We will now recognize Mr. Alvarez. Welcome, Mr. Alvarez. STATEMENT OF JOSUE ISRAEL ALVAREZ, MISCLASSIFIED TRUCK DRIVER FOR XPO LOGISTICS Mr. Alvarez. Thank you, Chairwoman Wilson and Ranking Member Walberg. My name is Josue Alvarez from Bell Gardens, California. I am 26 years old, and I am a misclassified truck driver at XPO Logistics. I am honored to speak with you today about the Protecting the Right to Organize Act. My parents came to the United States from El Salvador in search of a better future. Growing up, my father had many jobs, but struggled to make ends meet. We lived in a cramped one-bedroom apartment shared with other families. It was difficult. My dad and I worked for a $15 billion global corporation called XPO Logistics. We know that these companies have scams to hide their responsibilities to the workers. One scam is calling drivers who own or lease trucks independent contractors, but then controlling them just like any employee. This is known as misclassification. The other scam is completely avoiding any responsibility to a driver who works for them and drive someone else's trucks, usually at the nightshift. They call this driver a second sheet driver. Whatever they call us, at the end of the day, we are all experienced employees, while XPO gets away with wage theft and union busting. I didn't always want to be a truck driver. I tried to finish my degree in aviation administration, and have a dream of becoming a pilot, but those dreams are becoming more difficult. I became my dad's second seat driver in hope that my extra income would not only help my family, but also further my education. That has not been the case. With the income I bring home, I cover costs like cell phone and Internet, so my two younger brothers can focus on their education. I am slowly trying to finish my degree, but it is hard when you have to work 14 hours a day and at the company's mercy. I cannot say now just how much misclassification has badly impacted not just my life, but also the thousands of other misclassified drivers and their families. As a second seat driver, you are paying cash per load. You have no access to benefits, work nights often, and receive the worst dispatches. Whenever an issue arises, we bring them to XPO management. They turn us away and tell us that the truck owner is our boss but XPO controls our work. They dispatch us. They tell us when to go and where, and they decide how much we get paid. Controls all relations with customers, including the type of service provided, how much the customer is charged, and the appointments when to pick up the container. My truck says XPO on it. I wear an XPO vest every day. It is clear who the boss is here. It is XPO. If something happens while we are on the road, we immediately have to report it to dispatch and wait for instructions. One time I was passing through a scale for an inspection. I was issued a citation from DOT and given a report to return to dispatch. This citation falls into XPO since it is XPO's DOT member, but XPO has their own internal point system used to discipline us. For this instance, I received 55 points. Once you hit 75 points, you are terminated. Last year, I purchased my own truck. You may be wondering why, knowing the struggle involved. The answer is that XPO misled me. They told me that they were going to get a bunch of new accounts and work was going to pick up significantly. That ended up not being the case. We haven't seen these new accounts, and work has not picked up. Now I am stuck with this truck. XPO does what it can to fool workers into buying into this business. They try to sell you a dream. My paycheck comes with a statement attached, telling me how much I make per load, and then a list of deduction of insurance and miscellaneous administration fees. I have no idea what some of these administration costs really are, or if they are legitimate. And because I am misclassified, XPO is able to push operation costs like taxes, diesel, tags, and more onto me. My dad and his coworkers tried to organize back in 2015, but XPO's misclassification made it impossible to organize. Workers were met with intimidation and retaliation against and were told that they were independent contractors. An administrative law judge issued her decision, finding us to be employees in 2018, but XPO filed an appeal in the case and still it is still unresolved. The law needs to be changed so it will be easier to be recognized as an employee. My dad tried to bring me around organizing meetings at first. I wanted no part of it. I believed XPO and their antiunion messaging. I was wrong. XPO is wrong. I realize that things at XPO need to be changed. I don't have health insurance. We don't have sick days or vacation days. We should be able to go to a bargaining table and negotiate higher pay and benefits, sick days, vacation days, and agreement procedures. We are not asking for a lot. We are asking for what is just and fair. Being properly classified at XPO will mean that we can finally form our union and bargain for the employee benefits and protections that we have been denied. Our community, which has long been exploited by this industry, could finally live the middle-class life they came to this country for. My family could finally make ends meet and even thrive. I could finally go back to school and fulfill my dream of becoming a pilot. We could finally achieve the American dream. Thank you, and I am looking forward to your questions. [The statement of Mr. Alvarez follows:] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Chairwoman Wilson. Thank you so much, Mr. Alvarez. We will now recognize Mr. King. STATEMENT OF G. ROGER KING, SENIOR LABOR AND EMPLOYMENT COUNSEL, HR POLICY ASSOCIATION Mr. King. Thank you, Chair Wilson, Ranking Member Walberg, members of the Subcommittee. Thank you for having me back. Mr. Roe, nice to see you again. Ms. Foxx, nice to see you. And Committee Chair Scott, nice to see you also. I am testifying here today on behalf of the Coalition for Democratic Workplace. I am the Senior Labor Employment Counsel for the HR Policy Association, and the association is a member of CDW. CDW represents literally hundreds of thousands of employers throughout the country, and millions of workers. The HR Policy Association represents a good number of the major companies in this country and their chief human resource officers. We are opposed to this bill. When I went through it the other evening, I counted at least 30-plus negative provisions that are biased, as mentioned by Mr. Walberg, toward not only employers, but also employees. Also at least four Supreme Court cases are overruled by this legislation. After reading the professor's testimony the other day, I added another one because, as she suggests, secondary boycotts would now be illegal and would be overruled by the Supreme Court decision in question. This is a disturbing act. It amends the National Labor Relations Act to radically change the definition of joint employers. This body recently took the opposite direction. It passed, on a bipartisan basis, a bill that went exactly the other way and protected small business entities, particularly franchisors and franchisees. I think many people in this country will remember that vote, and this bill clearly is repugnant to what this body did in that legislation. Second, the bill radically changes the definition of employee status under our Nation's labor laws, and blindly accepts a perhaps California approach known as the ABC test. I would note in passing, even California now is having trouble with this proposal. The General Assembly in Sacramento is not sure how to go. The courts are not sure how to go. They just accepted another remand on this case. This is a bad proposal that will hurt American workers. The bill also mandates that arbitrators decide in initial negotiations, if the parties can't agree, the terms of the agreement if, in fact, a majority of employees in the unit have signed cards. This is backdoor card check. This is something this body, as Mr. Walberg mentioned, rejected. This is very controversial, not a good idea, not favored by the public, not favored by workers. Under this provision, the workers don't even get a chance to vote on whether they would accept or reject what the arbitrators come up with. Not a good idea. Further, the bill without any premise or predicate whatsoever would permit intermittent strikes. Why that is a good idea, I have yet to hear anybody give me a good explanation. Intermittent strikes cripple companies and businesses. They are not good for workers. The bill also would overrule, as mentioned, the right-to- work legislation that has been enacted, Michigan, been mentioned by Mr. Walberg, and other states. Let me give you a practical consequence of that. An employee in one of those states that refuses because of her or his very solid thinking that they do not want to pay fees or dues to a union could be ousted from employment because in that state now, a condition of employment could be made to pay fees or dues. The premise for this bill is wrong. The nation's labor laws are not broken. The National Labor Relations Board is functioning quite well. If you look at the stats I have in my testimony, unions have failed to organize. We are at a 75-year low for petitions being filed in this country by unions, and the stats and the papers speak for themselves. What really is interesting, when you compare the number of potential workers in this country for unionization in the private sector to the number of petitions filed by unions in this country, it is less than one tenth of one percent. Let me emphasize it again. Unions are not devoting any material resources to organizing. Before they come to this body and ask for a lifeline, they should do their own work. They are simply not doing that. That is a startling statistic, and even labor union leaders are criticizing that fact. The AFL-CIO's budget is devoting less and less resources to organizing, but yet, they want you to bail them out. Not a good idea. We oppose this bill and we think it is a very bad proposal, not only for employers, but for employees and for our nation's economy, because it is going to be a formula for disruption. Thank you. [The statement of Mr. King follows:] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Chairwoman Wilson. Thank you, Mr. King. We will now recognize Mr. Griffin. STATEMENT OF RICHARD F. GRIFFIN, JR., J.D. OF COUNSEL, BREDHOFF & KAISER, P.L.L.C. Mr. Griffin. Madam Chair Wilson, Ranking Member Walberg, and members of the committee, my name is Richard F. Griffin, Jr. I was the General Counsel of the National Labor Relations Board from November 2013 until the end of October 2017. I want to state at the outset the central importance of workers' rights to join together to form unions, and to engage in collective bargaining to any fair economic system. Section 7 of the National Labor Relations Act beautifully articulates these rights, but the rest of the Act does not fulfill Section 7's promise. Reform is needed. I will thus discuss here the standards for determining independent contractors and joint employers and injunctive relief. Only employees as statutorily defined have the right to engage in Section 7 activities. Thus, independent contractors are not protected when they form a union and seek to engage in collective bargaining. When I was General Counsel, the employee status issue and the misclassification of employees occupied a large amount of time and resources for the agency. The status determination requires the application of a complicated 10-part test. The Board in the D.C. Circuit disagreed over how to view workers' potential entrepreneurial opportunity when applying that test, with the Board focusing much more on whether entrepreneurial opportunity was actually exercised. Recently, the current Board in the SuperShuttle case determined that all 10 common-law factors have to be examined through the prism of potential economic opportunity. This decision complicates the application of a difficult test, expands the number of workers excluded from the Act's coverage, and opens up the potential for employer manipulation. Employer manipulation resulting in rampant misclassification of employees as independent contractors is a real concern. As an example, we had one case where an employer settled an unfair labor practice charge by agreeing to post a notice, advising its truck driver employees of their rights under the Act, only to turn around and advise those same truck drivers that the notice didn't apply to them because they were independent contractors. The PRO Act's three-part test is easy to apply and will make such misclassification obvious and easily addressable. On the joint employer question, everyone agrees that common law applies. The fight is over what the common law requires. Lost in the rhetoric is the changing nature of the workplace and the need to put employees' representatives at the bargaining table with the entities that have a right to control the employees' conditions of employment. In the modern workplace, the responsibility formerly performed by one employer are now done by multiple entities. This calls for a particularized application of all the common-law factors. The prior Board did this in its Browning-Ferris decision. On the other hand, the current Board is proposing a rule that would limit the factors considered to possession and actual exercise of substantial, direct, immediate control over the essential terms and conditions of employment of another employer's employees in a manner that is not limited and routine. As an example of why this is a bad test, in a supplier/ employer, user/employer situation, where a temporary agency supplies permatemps to a workplace, the user's supervisors routinely mandate overtime for supplied employees. In contemporary society where people hold multiple jobs, both spouses are working, commuting distances are great, and child and elder care responsibilities paramount, there are few more essential determinations than whether a worker has to work longer hours on a particular day than she or he planned. In this context, the union representative seeking to bargain voluntary overtime provisions, set schedules, the equitable rotation of overtime, or advanced notice of schedule changes has an impossible task if she is limited to seeking such provisions from the supplier employer. In this example, effective collective bargaining requires the user employer to be represented at the bargaining table. The Board's Browning-Ferris decision requires consideration of routine repetitive control, along with indirect control and reserved control. The PRO Act wisely would codify that standard. Finally, on injunctive relief, the Act's critics frequently point to the inadequacy of its remedies. When combined with the requirement to enforce Board orders in the courts of appeals, final enforcement comes too late to be effective. The typical worker will think twice about supporting a union if the potential consequence is that she will be fired and have to wait a long time to obtain legal redress. Injunctive relief under sections 10(l) and 10(j) is a powerful way to obtain quick relief. Section 10(l) requires that relief be sought mandatorily, 10(j) is discretionary. Section 10(l) has been very successful in essentially eliminating the union unfair labor practices, the 8(b)s, that it is addressed to eliminate. Virtually the only time that Section 10(l) injunctions are sought these days is when general counsels advance novel theories infringing on union First Amendment rights, such as the current initiative seeking injunctions against union's symbolic speech using inflatable rats. The PRO Act incorporates mandatory language in Section 10(j), making the Board more capable of addressing violations quickly and effectively. Thank you for this opportunity to testify, Madam Chair. [The statement of Mr. Griffin:] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Chairwoman Wilson. Thank you, Mr. Griffin. Under Committee Rule 8(a), we will now question witnesses under the 5-minute rule. I will now yield myself 5 minutes. Mr. Alvarez, because XPO industries misclassified you and other drivers as independent contractors, you are not able to be bargained -- you are not able to bargain for basic worker protections like health insurance and sick pay. So, what happens now when you or a fellow driver becomes sick or needs time off? Mr. Alvarez. We really have to think about it. It is just like anytime, just like any -- before I take vacation or a day off, XPO still pushes the operation, costing us, regardless we go to work or not. Chairwoman Wilson. How would organizing a union solve this problem for and other drivers? Mr. Alvarez. With the union help, we will be able to go to our bargaining table and bargain those benefits that we have been denied, for example, vacations and sick days. We should be able to go to vacation and not come back to a negative check every time. Chairwoman Wilson. Okay. I want to thank you for your courage to testify here today before this committee, and know that we are going to fight for you. We will fight for you and all Americans who want to exercise their rights to negotiate for better pay and working conditions, and thank you for standing up and coming today. Mr. Griffin, I want to thank you for your public service with the NLRB. During your time as General Counsel, you devoted yourself to the core purposes of the National Labor Relations Act, which are to protect workers' freedom of association and promote the practice and procedure of collective bargaining. In your testimony, you detailed the harm that misclassification has done to employees, like Mr. Alvarez. What are some of the ways that misclassification independently violates workers' rights under the labor law, and how would the PRO Act address this problem? Mr. Griffin. Well, it is fundamental under the Act. If you are an employee, you have rights, they are protected. If you are an independent contractor, you don't have rights, you are not protected. And so, if an employer deliberately takes someone who has employee status and does not allow them to exercise their rights by advising them that they are an independent contractor, that they have no rights, it is a fundamental violation of people's ability to engage in the activities protected under Section 7. In addition, it has a chilling effect on people's ability to speak to each other, to engage in the type of concerted activity that the Act protects, because they think they don't have any rights. They are misinformed, misclassified, and it is probably an extremely -- it is an extremely effective way to deny people their rights. And so what the PRO Act does, is it takes this 10-part test that is very complicated and confusing, and makes it simple and straightforward. And so if somebody misclassifies an employee, it is very obvious under that three-part test what they have done and so it makes it simpler to identify the misclassification. Chairwoman Wilson. Thank you. Your testimony -- this is for Professor Garden. Your testimony details how provisions of the NLRA curtails workers' First Amendment free speech rights. Do the reasons for those restrictions on workers' speech including the so-called secondary activity as part of the Taft- Hartley Act of 1947 hold up in today's workplace? Ms. Garden. Thank you for that question. I think there are two reasons that the reasons behind the secondary boycott provision don't hold up today: One has to do with law, and one has to do with the changing nature of work. First, in 1959 when 8(b)(4) was adopted and then when it was modified in 1959 -- I'm sorry -- 1947 -- when it was adopted and modified in 1959, perhaps Congress could have reasonably seen picket lines as coercive. At the time, refusing to cross a picket line could mean the ability to -- could mean losing the ability to work in a heavily unionized industry. That is no longer the case as a matter of law. Workers' jobs can't be conditioned on their willingness to walk a picket line. That means today's picket lines depend on moral persuasion, not on coercion. Second, work has changed. Fissuring situations like the one that gave rise to Preferred Building Services have become more common, and that means there is a greater need for employees to be able to picket outside of the larger entities that control their wages and working conditions as a practical matter. Chairwoman Wilson. Okay. In your opinion, should First Amendment rights to free speech be restricted because of who is making the speech? Ms. Garden. Absolutely not. And it is not just my opinion. It is the Supreme Court's opinion as well. In recent cases like Sorrell v. IMS Health, even like Citizens United, the Supreme Court has strongly criticized the idea that speech rights can turn on who is speaking at a given time. The Court has said that government has to justify speech rights that turn on who the speaker is, and, essentially, demands proof that the restriction is necessary to achieve an important government interest. Chairwoman Wilson. I thank you. I thank you so much. I now recognize the Ranking Member Walberg for his round of questions. Mr. Walberg. I thank you, Madam Chair. I believe we will recognize the Chairwoman or the Ranking Member. Chairwoman Wilson. Oh, the esteemed Dr. Foxx -- Ms. Foxx. Thank you. Chairwoman Wilson. -- for her round of questioning. Ms. Foxx. Thank you, esteemed Chairwoman. I thank all of the witnesses for being here today. Mr. King, the bill before us today undermines the right of American workers to a secret ballot election to decide union representation. But shockingly, 77 House Democrats who have cosponsored H.R. 2474, including 12 on this committee, also signed a letter to the Trump administration, urging strong enforcement of a new law in Mexico that guarantees Mexican workers that same right to a secret ballot union representation election. Doesn't it seem remarkably inconsistent, even hypocritical, for Democrats to ensure the right to a secret ballot union representation election for Mexican workers, but undermine the same right for American workers; and why is the right to a secret ballot election so important for workers? Mr. King. Thank you, Dr. Foxx. It is nice to see you again. I have been following the United States, Mexico, Canada negotiations quite closely. Our members, many have operations in Mexico and we are quite concerned about where that is going, but it looks like we have progress. But your point is well taken. Those negotiations guarantee Mexican workers the right to vote on whether they want union representation; and, further, it even goes beyond that. The workers in Mexico under the negotiation status of present will also have a right to approved collective bargaining. Their collective bargaining agreement will be subject to a vote. So, those rights are even further being articulated and pursued than what is available to American workers. Ms. Foxx. Thank you, Mr. King. Mr. King, in the first hearing on H.R. 2474, a union leader testifying for the Democrats admitted the reasons they need to force workers to turn over personal information such as home addresses and cell phone numbers is so that unions can target workers, quote, ``at a grocery store,'' end quote, or, quote, ``any place else where you can get them,'' end quote, including, quote, ``at their home,'' end quote. Under this bill would workers have any say regarding the privacy of their personal information and what personal information is shared with the union organizers? What risks, disruptions, or threats could that create for workers and their families? Mr. King. Well, it certainly could subject them to harassment at any location, as you mentioned, whether it be the grocery store or at their home; and, further, there is no ability under this bill for a worker to opt out, to say that she or he does not want to share such information. Additionally, there is no protection whatsoever for this private information. We have all seen the data breaches that occur, particularly in government, but not just in government. So this is a very poor provision. I think members that support this bill will have a very difficult time explaining to their constituents why they authorized the release of personal cell phone numbers, personal home phone numbers, personal email addresses. Very bad idea. Ms. Foxx. I think there is also some discrepancies in what our colleagues are saying about the Internet and agencies that control the Internet in this regard. Mr. King, Democrats have made their intentions clear in H.R. 2474 regarding their goal of eliminating independent contractor status which has encouraged innovations like the sharing economy that millions of Americans embrace and use every day. How exactly would this bill impact business owners, workers, and consumers in the sharing economy? Mr. King. Well, Dr. Foxx, it would eliminate for all intents and purposes, decades of jurisprudence as to who is and who is not an independent contractor; and as a practical matter, pursuant to your question, it would adversely affect millions of workers who prefer to have a job where they work when they want to work, and the independence they have associated with that job. So, it is going to hurt that part of our growing economy tremendously, another very poorly thought- out proposal. Ms. Foxx. Well, our whole country, the capitalist system, is based on the idea that somebody can start a business and get it going and work with other people who are independent contractors. I think it underlines capitalism, frankly. It is a much broader issue, I believe, than what is just in this bill. Madam Chairwoman, I would like to submit for the record an article from the Wall Street Journal, April 30, 2019, called, Big Labor's Big Shrink. Thank you. [The information follows:] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Chairwoman Wilson. Thank you. And now Mr. Norcross from New Jersey. Mr. Norcross. Thank you. First of all, thank you for holding this second hearing, because, remarkably, facts count, and when we look at the long history of employer/employee relationships in this country, we have had some valleys and some peaks. But the one I look at now is the gap between productivity of a typical worker's compensation, and that of their hourly compensation. So, as compensation went up pretty much even from the early 1960s to the mid 1970s, with productivity, they stayed pretty much aligned -- and I will enter this into the agreement -- but then a remarkable thing happened in the mid 1970s. Productivity continued to skyrocket, and hourly compensation stayed flat, to the point that they were even in the 1970s, there is now 130 percent gap over those 45 years. Now you are asking yourself: Why? Well, what I heard is Americans are making it today. Absolutely right if you are that top 1 percent, which this is what shows, but that is what happened when the laws became outdated and changed for those who wanted to have representation. So now, today, we are left with a set of rules for those who want to collectively bargain that are chiefly stacked against them. You cannot argue with the gap between those who are at the top 1 percent and those workers. It used to be, if you played by the rules in America and you worked hard, you grew with your company and they would treat you that way. But what you see today is something that is nothing short of remarkable. Ritz, the Nabisco company in Philadelphia, closing down their shop, moving to Mexico. Why? We do have the greatest workers in the world, but apparently, we don't want to pay them. So, we ship them off to Mexico and say sorry to everybody else. This has happened time and time again. And then the independent worker, the entrepreneurial spirit, so those Uber drivers are now their own accountant and bookkeeper. They are their tax advisor. They are talking about them as they are now their retirement. They are health advisors to make sure they get the right insurance. They now have to be their legal advisor, their insurance advisor, their safety in OSHA; and these are the same folks that are barely making minimum wage. So, what you are seeing is the deferred responsibility, companies dumping it off and making them their own company. We know this isn't going to work. We are seeing evidence of this every day. It is a way of a company deferring their responsibility to making those employees, which, as you spoke, Mr. Griffin, is they have certain rights and responsibilities when you are an employee; but when you are a subcontractor, that all goes out the window. So, the company that hired them now defers all that. Tell me what person you know driving an Uber is his own accountant, his tax advisor, his requirement advisor, health advisor, legal advisor, insurance, and now safety. Tell me how that works? It doesn't. It is not about entrepreneur. Those who want to start their own companies make that determination. Uber drivers don't want to start their own company. They just want to make a fair living. I am just bringing out Uber. There are dozens and dozens of examples of this. So, Mr. Griffin, in the PRO Act, does this change what would be considered an independent and entrepreneurial person and an employee? Could you explain that? Mr. Griffin. Yeah, I don't think that there is any issue about truly independent contractors who want to start their own business and get customers, as far as those people being limited in their ability to do that. What this test does is it prevents the three-part test that is in the PRO Act. It prevents people who are actually employees who are not out, seeking other customers but who are handed a piece of paper when they come to work and ask to sign it, that is a paper document that the employer drafts and has a lot of provisions about potential entrepreneurial opportunity that are never actually going to come to fruition that is designed to misclassify those people. What it does is, it puts a very straightforward three-part test to make sure that the person is genuinely an independent contractor. If they are not, they are an employee. Mr. Norcross. Well, thank you for that answer, and to enter into the record the Economic Policy Institute, I ask that this be accepted into the record. Chairwoman. Chairwoman Wilson. Give you another minute? Mr. Norcross. No. Chairwoman Wilson. You are finished? Okay. Thank you. Mr. Norcross. Thank you. Chairwoman Wilson. Without objection. [The information follows:] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Chairwoman Wilson. Mr. Walberg, questions? Mr. Walberg. Thank you, Madam Chairwoman. And thanks to the panel for being here and some of you coming many, many miles to be here. Thank you. Mr. King, over the years, Congress, I believe, has struck a delicate balance in federal labor law with respect to the interest of employers and workers during this time, even as the union membership rate has fallen drastically; and we will certainly have, for the record, numbers that will be in stark contrast to some of the statements made about the lack of growth for the average employee during this time. But union membership has -- the rate has fallen drastically. The economy has grown enormously, inproving the lives of tens of millions of American workers, normal, everyday, blue-collar workers in my district and others. But rather than modernize a 70-year old law, laws back as I mentioned my father used to organize a steel mill in the 1940s, using those laws. The Democrats' current labor agenda would take us back to the volatile 1930s- era conflicts between labor and management. Let me ask you this: Is H.R. 2474 consistent with the balance that Congress has sought with respect to labor management relations? Mr. King. Absolutely not, Mr. Walberg. It goes just in the opposite direction. It would prohibit an employer from hiring permanent replacements in a strike situation. Now, people say, Well, is that fair? The labor laws in this country permit the employer in a strike to continue its operations; not terminate strikers, but replace them so they can continue. Workers can withhold their services and strike. That is a perfect balance. The Supreme Court has approved that. That has been the law for decades. This bill wipes that out. It also, as I mentioned, would permit intermittent strikes. This bill is not well thought out, it is going to lead to instability. It is going to take us back, as you mentioned, decades. Mr. Walberg. Again, I would say, as I have tried to clearly state in my opening statement, we are talking about union boss control, not necessarily labor, employee, control of their lives and their opportunities. So Mr. King, the decision about whether to unionize is an enormously important question for workers and their families, a decision that they ought to have. But H.R. 2474 codifies the Obama administration's radical ambush election rule, which significantly shortens the amount of time -- I mean significantly -- the amount of time available to workers to consider the pros and cons of unionizing from an average of 38 days to as few as 11 days. We don't do that in our efforts here in Congress. We have had more than those days for two hearings that we are involved with on this particular issue even. How does the ambush election rule in this bill tilt the playing field in favor of union bosses, but against workers? Mr. King. Unions can take as much time as they want to take to organize. There is no limit. They can engage in organizing activities for years, and then file a petition and per these ambush rules, insist upon an election. But then as you mentioned, 12, 14 days. There is not an opportunity for an intelligent dialogue. I remember Senator Kennedy when we had this discussion quite some time ago, saying at a minimum, there should be 30 days before an intelligent thoughtful discussion, pros and cons. Workers in this country are bright, they will figure it out for themselves, but let us have an intelligent period for thoughtful discussion before we have this important vote. Mr. Walberg. Mr. King, the franchise model has created an accessible path to entrepreneurship for many, many Americans, from all walks of life, and cities, and towns across the country. However, H.R. 2474 codifies the Obama NLRB's joint employer standard, which would essentially turn independent franchises into middle managers. That is not what they got into the franchise for, they wanted their own business, and local small business employees, into employees of faraway corporations. What impact would this have on entrepreneurial opportunity, and on the employees of the enterprise? And also, what might union leaders and trial lawyers prefer, or why might they prefer the Democrats' joint employer standard? Mr. King. This bill will have a very negative impact on franchisees. Small businesses entities. There are hundreds of thousands of these startup and successful business entities in every community, subjecting them to litigation, and uncertainty is going to chill the opportunity for them to continue, and certainly chill the opportunity for growth in this area. The only people that benefit from this proposal in H.R. 2474, with respect to the independent contractor and joint employer, are trial lawyers and some law professors that can write articles about the complexities, as Mr. Griffin mentioned as law. This is a terrible idea, as I mentioned in my opening statement. This body rejected that approach and passed a bipartisan proposal that is much fairer and much more even handed. That is where we should go. Mr. Walberg. Thank you. I am over time. I yield back. Chairwoman Wilson. We will now hear from Ms. Wild of Pennsylvania. Ms. Wild. Thank you, Madam Chairwoman. Thank you to all of you for being here to testify on this very important subject. And in particular, Mr. Alvarez, I would like to thank you for being here today. I assume you are missing a day of pay to be here. Is that correct? Mr. Alvarez. Yes. Ms. Wild. You are only paid when you are working, driving, is that fair to say? Mr. Alvarez. Yes, that is correct. Ms. Wild. I have grave concerns about the misclassification of your status with XPO Logistics, which happens to have a significant presence in my district in Pennsylvania. And I also want to thank the Teamsters and the presence of labor here in our committee room. I am sure they would welcome you, Mr. Alvarez, as a member if you were able to collectively bargain, but you are not able to. Is that right? Mr. Alvarez. That is correct. Ms. Wild. You don't have that ability because you are classified as an independent contractor. And under the National Labor Relations Act, independent contractors have no rights to organize or collectively bargain. Isn't that right? Mr. Alvarez. Yes. Ms. Wild. And I don't have enough time here today to go through the criteria for an independent contractor, versus an employee, but I just want to highlight some of the things that you have presented in both your oral testimony and your written testimony, ways that you have told us that XPO dictates your manner of work. And let me just reinforce, XPO classifies you as an independent contractor, notwithstanding the fact that they control all the relations with the customer. Is that true? Mr. Alvarez. Yes, that is correct. Ms. WILD. They get the customer, they determine the service that is going to be provided, they negotiate the price, and they schedule the pick-up, true? Mr. Alvarez. Yes. Ms. Wild. The truck that you now own has XPO painted on it, true? Mr. Alvarez. Yes. Ms. Wild. And you wear a vest when you are driving that says XPO on it, true? Mr. Alvarez. I have it right on me right now. Ms. Wild. That is what you are wearing now? Mr. Alvarez. Yes. Ms. Wild. And it does not say Alvarez Trucking, nor could you wear a vest that said that. Could you? Mr. Alvarez. It does not say Alvarez Trucking. It says XPO on it. Ms. Wild. And if you were to call your business quote, unquote, ``Alvarez Trucking,'' you would not be eligible to drive for XPO. Is that true? Mr. Alvarez. That is correct. Ms. Wild. And if you don't get enough work from XPO, you can't go solicit another load from some other company. Can you? Mr. Alvarez. No. My contract would be terminated. Ms. Wild. Thank you, Mr. Alvarez. So let me ask all of the witnesses. Is there anybody here who disagrees that companies have an economic incentive to classify individuals as independent contractors rather than employees? Mr. King. I disagree with that. Ms. Wild. You disagree with that, Mr. King. Mr. King. Yes. Ms. Wild. I am not surprised that you do. And you believe that there is no economic incentive for an employer, or for a company, such as XPO, to classify their employees as independent contractors? Mr. King. We did a study of our members. Most of the largest businesses in this country, their number one reason for subcontracting, or outsourcing was efficiency, productivity, and quality. Only 2 percent mentioned any avoidance of the labor laws. This is a wrong premise. Ms. Wild. And those members, Mr. King, are exactly the entities that are classifying their employees as independent contractors. Correct? Mr. King. Those 2 percent, perhaps. And are we going to write legislation to penalize the rest of the country for a few rogue employers? I think not. Ms. Wild. So Mr. King, I assume that you agree with the recent NLRB decision in the SuperShuttle case that creates a situation where workers will be considered independent contractors if an analysis is done that says that the worker has an entrepreneurial opportunity? Mr. King. Not only do I agree, but the U.S. District Court for the District of Columbia agrees. Ms. Wild. I am just asking you if you agree? Mr. King. Yes, I agree. Ms. Wild. So you believe then that Mr. Alvarez here has an entrepreneurial opportunity in driving for XPO. Mr. King. Well, I looked at the facts of the case, and in all due respect to Mr. Alvarez, they are much more complicated than what you have been shared with this morning. Ms. Wild. In fact, in the SuperShuttle case, many of those drivers for SuperShuttle were actually subject to noncompete clauses that prohibited them from pursuing entrepreneurial opportunities at other companies, correct? Mr. King. There was an element of that. The noncompete issue is a wholly different issue. I would be happy to discuss that with you. Ms. Wild. Well, wouldn't you agree with me that an entrepreneur should have the opportunity to compete in any possible way? My colleague, Mrs. Foxx, talked about that being the American spirit of competition. And yet, the drivers in the SuperShuttle case aren't allowed to compete. Mr. King. They are not allowed to compete in certain areas. When we talk about competition, that is a wide-ranging word. So we need -- Ms. Wild. Thank you. My time is up. Chairwoman Wilson. Go ahead. Now we will hear from the esteemed Dr. Roe. Mr. Roe. Thank you, Madam Chair. And thank all the panelists for being here today. And I want to say to start out, that this is the best economy in my lifetime. It is good to see Mr. Griffin and Mr. King again. I do want to say just a couple of things before I get started. I think one of the most important things in this free society that we live in is a secret ballot. I put a uniform on and left this country 46 years ago to serve in southeast Asia, to be sure that you had a right to vote how you wanted to. And I say this as a joke. I think my wife votes for me every time I run, but it is a secret ballot, so I don't know for sure. She says she does, but I am not sure that she does. So why shouldn't -- that is how we are elected, how the President is elected, how every legislature is elected, and how union representatives are elected. People voting for the union should absolutely have a right to a secret ballot, period. Number two, on the sharing of private personal information. As a physician, I tied myself in a knot with HIPPA being sure that I protected all of that information was very private, and patients could release whatever they wanted to. You should be able to do the same thing. Thirdly, on right-to-work laws, look, it is a right. I grew up in a union household. My dad was in the United Rubber Workers Union. He was a factory worker and he made shoe heels for BF Goodrich Company, until he lost his job to Mexico. Right now, fortunately those manufacturing jobs are coming back to the U.S. and that is a very good thing for union workers. And we should approve this USMCA. And I agree with my Democratic friends who insisted that Mexican workers can have a secret ballot protection. I agree with that. That was a right and proper thing that they did. I want to share with you just a very -- and by the way, there are 7.4 million unfilled jobs. I had a truck driver walk up to me in a Wendy's the other day in Dandridge, Tennessee. And he said, Listen, this is the best in my lifetime. I made $164,000 driving a truck last year. I have two trucking companies in my district, both of them are begging for truck drivers. And when the President said he was going to block the Mexican border, this trucking company went berserk, and not because of the lost business, they were afraid they would lose their drivers. They had 700-and-something drivers. The most valuable thing in that business was -- were their drivers, their personnel. When I served as Chairman of the Health Subcommittee in 2015, we heard testimony about the effects of the Obama era, Browning-Ferris joint employer status for Mr. Ed Braddy, who owns a Burger King in inner city Baltimore. And all the men that Mr. Braddy had hired at that store had a run-in with a criminal justice system. All the women he hired had been on some form of government assistance. And he hired people to give them an opportunity at a better life, as he described it. This ambiguous standard were implemented as the PRO Act would do, the Burger King corporation would be liable for many of the hiring decisions, or maybe Mr. Braddy. Why would we expect any corporation to know a community better than someone local, like Mr. Braddy? Wouldn't a corporate entity be more at risk, adverse, and less likely to give people a second chance, Mr. King? Mr. King. That is part of the problem. That is a major problem. How can a local business owner, Dr. Roe, like you described, go through this complex litigation scenario that could put them out of business? This bill is designed, from our perspective, to chill the rights of employers, particularly small employers, small business entities faced with potential fines through the first time in the history of the National Labor Relations Act, faced with the imposition of unionization. This is a back-door card check bill. It will have a potential devastating impact upon the small employers as a practical matter. Mr. Roe. Mr. King, wouldn't codifying the ABC test and the Obama NLRB joint employer standard at the federal level essentially eliminate the entire franchise industry as we know it, which employs more than 7 million Americans nationwide, including 21,000 in Chairman Scott's district? Mr. King. I think the answer is yes. And the reason for that is look at what is happening in California, Dr. Roe. As I mentioned, the California legislature now is reconsidering this entire ABC test. The courts out there are reconsidering it. There is a considerable amount of tension back and forth. The legislative body in California has had to carve out exceptions already, just to have a discussion about this approach. It is a very poor approach and it should be rejected. Mr. Roe. I am going to finish, because my time is almost expired, has expired. And I want to thank those folks sitting out there that have their Teamsters shirts on. That is the community I grew up in. I appreciate the hard work you do. And as I said, every American has the right; if they want to organize, they should be able to do that. If they don't, they should also have that right. I yield back. Chairwoman Wilson. Thank you. And now the distinguished Chair of the Ed and Labor Committee, Mr. Scott. Mr. Scott. Thank you. Thank you, Madam Chair. Mr. King, you indicated in your testimony that there are several provisions that would overturn Supreme Court decisions. Could you list those, and state whether or not the Supreme Court ruling was based on statute, and statutory interpretation, or constitutional right? Mr. King. I list them, Mr. Scott, in footnote one, the Epic Systems case, the Hoffman Plastic case, Mackay Radio case. And I have added, after reading this, I mentioned Professor Garden's testimony, the Retail Store Employees Union local case, that is the secondary boycott case. All of those cases, from my perspective, thoughtfully reviewed the statutes in question and arrived at the right decision. Mr. Scott. So if it was based on constitutional right, you couldn't overturn it with a statute. If it is based on statutory interpretation, a new act would be okay, constitutionally okay? Mr. King. Certainly from a policy perspective, we wouldn't think it would be okay. But I understand your question. Mr. Scott. Thank you. Ms. Garden, if a person was hired by a temp agency and placed at a work site, could you say what the implications of joint employer would be and secondary boycott if there was a picket? Ms. Garden. Absolutely. The first question would be whether the National Labor Relations Board would agree that the work site was the joint employer of these employees. The Browning- Ferris test makes that determination more predictable by allowing reserved or indirect control to be part of the consideration. So, if you instead required substantial direct/actual control, then you could have a scenario in which the job site has reserved, but not yet exercised control one week. Another week they start to exercise control, and you would have that entity shifting from being not a joint employer to a joint employer. So the Browning-Ferris test is sort of easier to tell at the outset and more stable in terms of whether or not somebody is jointly employed. Mr. Scott. And if they are not a joint employer, you can't negotiate -- you don't have the right to negotiate with them, even though they effectively set the salary by virtue of the contract with the temp agency? Ms. Garden. That is exactly right. And as the Preferred case shows, workers who attempt to influence what the work site pays them and how it treats them, face the sort of very dangerous waters of negotiating what they can and can't say, how they can and can't protest under section 8(b)(4). Mr. Scott. And how does the secondary boycott issue apply to that case, to that situation? Ms. Garden. So in Preferred Building Services, there were sort of two issues that the NLRB talked about. One was whether the workers were in what is known as the Moore Dry Dock set of presumptions. Moore Dry Dock provides a carve-out for workers to engage in some secondary activity, including picketing at a job site, as long as they meet some fairly detailed requirements. The Board found that the workers lost the benefit of that presumption, in part, because they distributed handbills that called on building tenants to try to influence the condition of ``their janitors.'' That choice of pronoun, ``their janitors,'' seems to me to say the janitors who clean your office. Apparently, the Board saw it differently as janitors you employ. Whatever you think of those two possible interpretations, it is hard to tell in advance what a Board is going to do, and whether or not you are going to retain the protections of the National Labor Relations Act if you are fired as a result of your picketing. Mr. Scott. Mr. Griffin, one of the provisions of the bill allows the imposition of meaningful sanctions. Can you say why the sanctions in present law are not sufficient, and why sanctions such as backpay without reduction based on interim earnings are insufficient? Mr. Griffin. Yes. Currently, the rule of -- the general rule, if someone is discharged, is that the remedy is backpay, minus interim earnings, and reinstatement. Generally speaking, because of the time that it takes to go through the process and because of the hostility that has been generated as a result of the discharge, the person is likely, or will be offered to waive reinstatement as part of the resolution, so they won't go back to work, number one. Number two, they have an obligation to mitigate their damages, and because most people work for a living, work paycheck to paycheck, they have to do that. And that work for another employer is counted against the money that is owed to them, so that it is not a very serious deterrent to an employer who discharges someone unlawfully, that they have to pay that difference between what they make as they seek employment elsewhere. So making sure that people are actually paid for the result -- actually get paid and the employer has to pay for -- Ms. Wilson. Mr. Griffin, your time is up. Mr. Griffin. Oh. My apologies. Chairwoman Wilson. Thank you very much. Mr. Taylor. Mr. Taylor. Thank you, Madam Chair. I appreciate this hearing. Thanks to the witnesses. Mr. King, I just wanted to follow up with Dr. Roe's question earlier about ABC in California. As a state legislator in Texas, I certainly saw, over and over again, the number of new businesses coming to Texas that talked about -- one of the reasons they are relocating is because it is a right-to-work state. And we have certainly been very successful in our job creation in Texas, as companies leave union states to come to a right-to-work State. I am very blessed to wake up in a city, Plano, Texas, it is the highest per capita income city in North America with over a quarter of a million people. So clearly, we have been successful in creating high income jobs in a right-to-work state. And it could be one of the benefits of America is we have got 50 states, we have a laboratory democracy, we are watching California, those are the ABC test. Would you mind and since H.R. 2474 has the ABC test word for word in it, and it has not yet been adopted as I understand by the state of California, could you take us through what that does and how it works? Mr. King. Certainly, I would be happy to do so. The second prong of the test is the one that you should focus on. It states that you cannot be an independent contractor if you provide services that are within the scope of the hiring company. That, by and large, makes virtually anyone that would perform a service for a hiring company, a user company, if you will, an employee, that is very controversial. The other two parts of the test would also have to be satisfied, but really the focus has been on prong two. Let's just think about that for a minute. A hospital, for example, that brings in individuals that are at a nursing agency, because they have a high census of patients. Those agency nurses under the second prong of that test would be employees, not independent contractors. That has never been the law. That makes no sense. Then this whole premise that somehow employers are using independent contractors to evade the law, per the colloquy we just had, is incorrect. It is not based on fact. Yes, there may be some rogue employers out there. They should be brought to justice if they are misclassifying individuals. We don't support that. But this economy we have, it is doing so well, it is based on so many different relationships every day. Even the smallest business brings in independent contractors to do a variety of things. They do so for efficiency reasons, productivity reasons. Yes, they do control costs. So the California legislature is starting to see this; we will see where that goes. But no matter what California does, I would submit to you that is not a good way to run our country. The laws in California are some of the absolute worst for employers. And many employers that I worked with over the years as a lawyer exit that State for that very reason. Mr. Taylor. Just to build on that, in my time in Collin County, I have seen many employers using 1099 contractors to take on a particular project they want to develop, particularly with IT space. We have a lot of IT companies there. Hey, I want to build a website, want to build an MIS system. It is a six- month project, it is a one-year project. We are bringing in some 1099 contractors so we can have greater control over what we are actually doing, rather than bringing in a consulting firm, that is sort of doing it off site, they can do it on site with 1099 contractors. That has been very successful for them. We have a lot of extremely well-paid people who are 1099 contractors, who have a very good lifestyle in Collin County doing different MIS projects for different employers. And it seems like what we are saying is that this would end that, that at least my community, if 2474 became law, that ability of the employers that I have in my district, they wouldn't be able to do that anymore. The ability to use 1099 contractors for specific projects, those people work as 1099 contractors, which is what they want to do, that goes away. Is that what you are saying? Mr. King. Absolutely. Either stop it, or lead to litigation and regulatory interference. And that is another dead end for that kind of economic growth. Mr. Taylor. Yeah, this is unfortunate, because I think to have a successful economy, you need to have a sophisticated way to be able to organize. And clearly, we have that now. And this really takes away a whole series of tools that businesses are using, with great success, to the benefit of the businesses and to the employees who are working, and who I have the privilege to represent here in Congress. Mr. King. Absolutely. And many individuals prefer to be independent contractors, frankly. Mr. Taylor. Absolutely. Thank you. Madam Chair, I yield back. Chairwoman Wilson. Thank you. Mrs. McBath of Georgia. Mrs. McBath. Thank you, Madam Chair. And thank you for each and every one of you who are here giving your testimony today. I am committed to truly protecting the rights of workers throughout this country, while also being mindful of the effect of these laws on small businesses. I have a lot of small businesses within my district. I do not believe that the two are mutually exclusive. Workers' protections make for better, more productive employees, and better business. I do, however, have concerns with actions taken by this administration, and the adverse effects that they could leave on employees and small business owners. Mr. Griffin, the question of whether a worker is an employee has historically been kind of governed by the common law of agency. The Trump NLRB issued the SuperShuttle decision on January 25, 2019, holding that they would apply the common- law test -- and I am quoting -- ``through the prism of whether the worker has entrepreneurial opportunity.'' Moreover, in that matter, the Board maintained the drivers in that case were independent contractors, even though they had been required to sign noncompete agreements. First, can you speak to an agreed-upon definition of entrepreneurial opportunity? How would you define it? What legal significance does it hold? Mr. Griffin. Well. If I may. The controversy over entrepreneurial opportunity between the former Board and the D.C. Circuit and the current Board's decision really turns on whether or not it is a speculative hypothetical opportunity that is never likely to come to fruition, or whether there is evidence that the entrepreneurial opportunity has actually been exercised. And so the Board, in its dispute with the D.C. Circuit in the FedEx cases, it did not say entrepreneurial opportunities shouldn't be considered. It said it should be real exercise, actual evidence, as opposed to hypothetical, speculative, paper documentation of potential opportunity, never to be realized. And one of reasons this is important is that most of these instances that result in these kind of cases are not instances where an independent contractor comes in and negotiates with the customer the terms of the provision of service. Rather, somebody shows up to do a job, they are handed a document that is entirely drafted by the employer, that has a bunch of provisions that talk about potential entrepreneurial opportunity so they can paper up the independent contractor theory, when, in fact, there is absolutely no evidence that opportunity is actually going to be exercised. And if the opportunity is going to be exercised, and has been exercised, and there is evidence of that, then that is a legitimate factor to be considered. But this kind of paper-speculative hypothetical business is not really worthy of consideration, in my opinion. Mrs. McBath. Let me ask you also, how can a worker exercise meaningful entrepreneurial opportunity while being prohibited from engaging in competition? Mr. Griffith. I think the short answer to that is they can't. The notion that you are an entrepreneur, but you can't compete, you can't go out and get other jobs, you have to work for this employer would seem to demonstrate, at least fairly strongly, that you are actually an employee of that employer, not an independent contractor, not an independent business person, not capable of going out, bidding on other jobs, getting other work, seeking other customers. Mrs. McBath. On June 28, 2019, The New York Times reported that within the 600-page-long disclosure document given to perspective Subway franchisees, that the franchisor reserves the right to revise its rules at any time during the term of franchise agreement, and that it can make changes under any condition and to any extent. Subway franchisees could face harm by the overwhelming control exercised by their franchisor. If the Trump NLRB succeeds in narrowing the joint employer standard, wouldn't that risk giving the franchisor more control over franchisee's employees' terms and conditions of work, while leaving franchisees on the hook for any violations of law directed by the franchisor? Mr. Griffin. Yes. What the franchisors in this context want is to have their cake and eat it too. They want to be able to control terms and conditions of employment, but have no responsibility. The franchisee is always going to be the employer. The question is whether if the franchisor engages in certain codetermination of wages in terms in terms of conditions of employment, whether they also will be responsible for bargaining and for unfair labor practices. So, to the extent that you narrow the joint employer definition you leave the small business, the franchisee, holding the bag entirely, and you allow the joint employer, franchisor, to escape liability. Mrs. McBath. Thank you. I yield back the reminder of my time. Chairwoman Wilson. Mr. Wright of Texas. Mr. Wright. Thank you. Thank all of you for being here. Mr. King, I represent most of Arlington, Texas. And as most people know, Texans love trucks and freedom, not necessarily in that order. And there is an abundance in Arlington because the largest employer is the General Motors assembly plant, employs over 4,000 people, good-paying union jobs. Fifteen minutes up the road is Dallas/Fort Worth International Airport, one of the largest in the country, again, with a lot of good-paying union jobs. So Arlington is an excellent example of a place where unions not only exist, but thrive in a right-to-work state. Now, we hear from my friends on the other side that right- to-work laws giving workers the freedom to decide for themselves whether to join and pay a union somehow undermines the right to organize. That would not seem to be the case in Texas. But does giving workers this freedom a choice in any way change the process, the union-organizing process? Mr. King. Well, I think it certainly does, Mr. Wright. What this bill does, as you know, is prohibit states like Texas from having a right-to-work law. And that, in and of itself, is a major problem. Further, unions can continue to organize in right-to-work states as you mentioned, and have done so with success. Again, this approach in 2474 is simply a bailout for organized labor in other areas. And let me just bear in on this right-to-work issue. If this bill passes in your state, an individual that right now has decided, for whatever reason, that she or he does not want to pay union dues or fees, could be subject to termination if the employer and the union insist that fee payment, reduced payment be a condition of employment. So what you will be doing with this legislation, if it passes, is putting people out of work that have strongly held convictions. And back to your point, shouldn't individuals have a right to choose for themselves? Mr. Wright. That, in fact, is one of reasons that Texas has one of the best economies in the country, and why it is one of the fastest growing states, why people from other states are moving there, companies from other states are moving there. That is one of the reasons. But in your experience, there is no evidence at all, is there, that right-to-work laws somehow undermine the right to organize? Mr. King. Not at all, Mr. Wright. In fact, you can make the argument just the opposite way, that when you have an organizing campaign, and the right-to-work option is available, some employees may say, Oh, I might even vote for the union because I won't have to pay fees or dues. It could be used against them for an organizing campaign, because I have seen it. So there is no correlation whatsoever. The lack of union density in this country, as I pointed out in my testimony, is right back at the union movement. They have not invested the resources or the time. And the facts bear that out. We are at a 75-year low, I believe, regarding the number of petitions filed by unions in this country. And as the testimony points out, less than one-tenth of 1 percent of the eligible workers in this country will have petitioned for last year are organized labor. That is not a story that should be a predicate to support this legislation. Mr. Wright. Let me shift very quickly to franchises. You mentioned it in your opening statement, Mr. Griffin, just mentioned it a moment ago. Can you elaborate a little bit on the obstacles to even starting a franchise that are presented by this bill? Mr. King. Of course there is the capital, and then there is the support, whether it be in bookkeeping, legal structure, what have you. And it is interesting to hear this discussion, because small business owners don't want to be embroiled in this kind of litigation. They don't want to be brought into Fair Labor Standards Act or National Labor Relations Act litigation. They want to run their business. And the franchisors that I know and work with, they want no part of the day-to-day operation of business, the direct control. I was interested in Mr. Griffin's comment. He's looking for some type of direct control in the independent contractor area, but I don't think that is where he goes on joint employer. What we are saying on joint employer is, there ought to be direct and immediate involvement in the day-to-day business before anyone is a joint employer. So these franchisees, that are small business people, are trying to start a business, they need help, obviously, from the franchisor. But the reputation and integrity of the brand, training, and auxiliary things should be furnished. But with these kind of laws, you are going to chill that development and that is bad for our economy, bad for your community, bad for everybody involved in this discussion. Mr. Wright. I would agree. I yield back. Thank you. Chairwoman Wilson. Thank you, Mr. Wright. Mr. Levin of Michigan. Mr. Levin. Thank you so much, Madam Chairwoman. And thanks for having this very important hearing. I want to ask a question of Ms. Garden, but before I get into that, I want to say a couple of things. Mr. Alvarez, we will get justice for you. However long it takes, we will get justice for you and other workers who are denied their freedom of association because of these laws. I just want to tell you that. Mr. Alvarez. Thank you very much. Mr. Levin. And thanks for coming here. Mr. King, I am just making a comment, but you can turn your mic on if you want. I am disappointed that you would mischaracterize the position of someone who is no longer with us. Mr. Kennedy was the original sponsor of the Employee Free Choice Act in the Senate, as you well know. A bill that would do away with the situation where workers have to have an election against their boss just to decide to have a union at work. And he was a champion of workers' freedom to form unions without that American innovation. And so, I don't really appreciate his name being used to oppose that policy. Mr. King. Well, I -- Mr. Levin. I am not asking you to respond. Mr. King. I worked with Senator Kennedy for many years on the Senate side. Mr. Levin. Sir, I am not yielding you time. And I want to remind my friend, Mr. Taylor from Texas, who spoke about high wages due to the right-to-freeload laws there. Texas is about in the middle, according to BLS data from 2016, $17.06 hourly wage for median wages. Not one of the top 10 States in these United States is a right-to-freeload State. They are all States with high levels of union representation, and none of them have right-to-freeload laws. Ms. Garden, this committee has expressed a lot of interest in the future of work. And it is especially interesting to us how that relates to protecting workers' rights amid technological change, the rise of the gig economy, more complex contracting arrangements which have been used purposely by very smart people like Mr. King to keep workers from forming unions. How does protecting workers' First Amendment rights, in particular, help them to adapt to the changes we are going through in the economy, and protect their right to secure better working conditions? Ms. Garden. So as work evolves and the nature of works changes, we sometimes find ourselves in situations where the law has not yet caught up to those changes. And when that is true, workers are on their own. Sometimes they are best, most immediate recourse involves exercising their First Amendment rights, right: their First Amendment right to engage in picketing, their rights to engage in collective action in order to try to get better treatment from the organizations that are controlling their day-to-day lives and their ability to put food on the table. Mr. Levin. So let me ask you about a particular case. In 2012, Walmart workers without a union and collective bargaining in 100 cities across 46 States participated in short strikes and peaceful protests to fight for better wages and working conditions. These protests did not prohibit anyone from entering a store, or did not interfere with the operation of facilities, and had really zero potential to force a union on reluctant employers or workers. Nonetheless, workers who participated were threatened with penalties under section 8(b)(7) of the NLRA, after Walmart alleged that they were picketing in an effort to force Walmart to recognize the union. Unfortunately, modern legal doctrine prevents workers from peacefully picketing their employer to encourage recognition of their union. How has the current legal precedent interpreting section 8(b)(7) of the NLRA misconstrued congressional intent behind the Taft-Hartley amendment? Ms. Garden. Thanks for that question. So 8(b)(7) was aimed at so-called blackmail picketing, prolonged shutdowns of workplaces aimed at forcing an employer to accept union representation for employees, regardless of what those employees wanted. That could not be further from a situation like the one you described, where unions picket a store that continues to operate, demanding better treatment for workers. That a complaint in a situation like that could gain a toehold, shows how far the law has drifted from the blackmail picketing that Congress was worried about. Mr. Levin. Thank you so much. You know, Madam Chairwoman, I just want to say to my dear friend, the Ranking Member from our great State of Michigan, he spoke about the delicate balance that has been created over the decades. The Wagner Act was passed in 1935. There has not been one sentence of federal law added by this Congress since then that helps workers be free to form unions and bargain collectively. The Taft-Hartley amendments in 1947 and the Landrum-Griffin amendments eroded workers' power through their own organizations. And it is high time that this Congress free up workers in this country just to have a union and a better say at work. We will not deal with income and wealth inequality in this country until we do that. Thank you. And I yield back. Chairwoman Wilson. Thank you. Mr. Meuser of Pennsylvania. Mr. Meuser. Thank you, Madam Chairwoman. Thank you all very much for being here with us. I am a former business company president, a business owner. I, like many, have many, many good businesses, small businesses throughout my district. Many are union, some are, many are nonunion. I am entirely for, and my reason for being here is to help businesses grow, help family incomes grow, participate in actions to create environments for wage growth, for union and nonunion, low unemployment, and just a fight for people and represent their overall interests in our economy. But there are some concerning points within this bill. I would like to talk about privacy a little bit and the bill requirement for access to employee's personal data without consent. I don't really necessarily understand the value there. So Mr. King, allow me to ask you: What are the dangers, what are the reasons for such a provision to be in this bill? Mr. King. Apparently, the rationale is for access of unions to contact potential voters in a union election. In reality, there is no ability for the employee to opt out, to say that she or he does not want personal information to be shared. There is no protection whatsoever, even if that information is furnished to not have that information be a data breach, or shared with third parties. In this day and age, the union movement has any number of opportunities through social media and other ways to contact potential voters. This is a desperation move, it would appear, on behalf of organized labor. There is no rationale for it. It is a bad idea. Mr. Meuser. Like many here, I was at the tail end of my business career, served as president of a company, but I was a driver, I was a builder, I was a credit collector, I was in sales, I was in marketing, I was in, you know, operations. So during the course of that, you become conditioned to appreciate the needs of all workers, everyone. Everyone has different titles and different responsibilities, but you are all part of the same team. That is why I also question why is it when we had the USMCA discussion, an issue arose where in Mexico, the management were the ones against the secret ballot, yet here, the union leadership is against the secret ballot. Mr. King, could you offer your opinion on that? Mr. King. It is hard to reconcile. The USMCA negotiations hopefully will result in an approval by this body, but contained in those discussions is the right of the Mexican worker to vote on whether she or he wants to be represented. And as I mentioned earlier, in addition, whether the contract that is being proposed by the Mexican labor union should be accepted. It is really very contradictory. We have this bill that will cut off rights of employees to vote and forced unionization, but just the opposite south of the border. Mr. Meuser. Thank you. I am going to yield the remainder of my time to Mr. Walberg. Mr. Walberg. I thank the gentleman. And a lot of things I would like, Mr. King, to allow you to respond to, especially relative to Senator Kennedy and the assertions there. But let me ask you this one question: Under current law, union organizers can make death threats and commit acts of violence free of legal repercussions so long as these actions are taken in the pursuit of ``legitimate union objectives.'' Why is this the case? And would H.R. 2474 change the law relative to this? Mr. King. Unfortunately not. That type of rogue activity would still be permitted. And Mr. Walberg, what is interesting, the fines that are suggested in this suggested, not suggested, proposed in this legislation, up to $100,000 only apply to the employer. Unions are not subject to any of the fines for misconduct that are articulated in this legislation. That makes no sense whatsoever. You talk about bias, that is one of the prime examples of this bill. It is only directed at employers, but that strike misconduct still could occur. Mr. Walberg. Which does not encourage unionization. I think the beauty of the fact of the numbers going down is a fact that unions have done some great things, and it has gotten better. So thanks. Mr. King. Mr. Walberg, I take personal offense of what was just said. I worked for Senator Kennedy when I was -- Chairwoman Wilson. The time is up, sir. You have no time. Mr. Walberg. I yield back. Chairwoman Wilson. I recognize Mr. Courtney from Connecticut. Mr. Courtney. Thank you, Madam Chairwoman. And thank you to all the witnesses for being here today. Mr. Griffin, on page 9 of your testimony, you, again, dove into what I think is accurately described as, there is no more controversial issue than the joint employer role, and the Browning-Ferris decision. We have had in numerous hearings over the years on this committee. And I would like to just spend a moment on that issue with you. So, in 2015, Browning-Ferris decision found that a company can be a joint employer if it has contractual control, or exercises indirect control over another company's terms and conditions at work. This decision was essential to workers who are increasingly hired by staffing agencies and subcontractors performing work for a company that often controls working conditions while evading liability. Browning-Ferris case was pending review at the D.C. Circuit when the Trump NLRB began its rulemaking to overturn Browning- Ferris. But the D.C. Circuit issued its decision last December. In that decision, it explicitly upheld the Browning-Ferris standard. And it also noted that the question is actually governed by common law, which is not again, confined to indicia of direct and immediate control as the NLRB under the Trump administration was seeking to do. And it also urged the NLRB against taking the first bite of an apple that is outside of its orchard. So if the current rulemaking is likely at odds with the D.C. Circuit, isn't the Board wasting time and resources that could be better used elsewhere? Mr. Griffin. I think it is. I thank you for the question. First of all, as you noted, the joint employer question is a common -- the common law standard is applied. And typically, and historically, the common law is something that develops in the process of case-by-case adjudication, and rules emerge based on review of multiple cases. And it is very odd to decide to do a rulemaking proceeding where what you are trying to address is a common-law standard. It is just -- it doesn't comport with a notion of common law number one. Number two, the D.C. Circuit said in its decision that the Board gets no deference. You know, administrative agencies under the Chevron doctrine got a certain amount of deference under certain circumstances with respect to their decision. And the D.C. Circuit said, Well, as to the common law, that is not the statute, that is the common law, you get no deference to that. And the D.C. Circuit interpreted the common law to include a number of factors that the rulemaking process so far discounts: indirect, reserved control, routine and regular exercise of authority. And rulemaking is prospective. The Board has a backlog of cases, people who are hurting, who have allegations of unfair labor practices against them, that are awaiting decision. The Board should be deciding those cases and not spending an effort contrary to what the D.C. Circuit said on a prospective exercise. Mr. Courtney. Thank you. I think, again, in terms of just judicial review, obviously, the D.C. Circuit trumps -- to use a bad pun -- the NLRB in terms of a settled issue. Again, just real quickly, the PRO Act obviously touches on this issue. I mean, that hopefully would bring total clarity in terms of just, you know, the definition of a joint employer rule. Is that right? Mr. Griffin. What the PRO Act would do, it would essentially codify the Browning-Ferris interpretation of the common law factors, yes. Mr. Courtney. Thank you. And again, I think, as I said, we wasted, or spent a lot of time on this issue. And again, if the common law is organically moving in a direction that the D.C. Circuit embraced, I think, frankly, we should join them in that effort as well with passage of this law. Again, in my remaining time, again, I just want to thank Mr. Alvarez for being here today and putting a human face on this issue. This is not sort of just a political ``who is up, who is down'' horse-race kind of issue, this affects real people in real lives. And again, thank you for being here today to really spotlight that. And with that, I yield back. Chairwoman Wilson. Thank you, Mr. Courtney. Mr. Allen of Georgia. Mr. Allen. Thank you, Chairwoman. Mr. King, would you like to finish your comments regarding Senator Kennedy? Mr. King. Thank you. Thank you for your courtesy. Senator John Kennedy did, in fact, support the 30-day period between the petition filing and the election. And we will submit that for the record. [The information follows:] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Mr. King. The second point I wanted to make is I worked in the Senate with the Senate Health Committee many years ago, and had the pleasure of working with Senator Ted Kennedy, including the time he was Chair. My patronage was Senator Robert Taft, Senators Taft, and Javits, and Kennedy worked together. So I do have a strong admiration for the Kennedy family. Thank you for your courtesy, sir. Mr. Allen. Mr. King, Georgia is a right-to-work state. We have been named the best state to do business in the last six years to locate your business. Our reasons for that, obviously, a skilled workforce is usually number one. So workers have a choice in Georgia. But it was interesting, just this week, the presidential campaign of a leading socialist Democrat, they cosponsored the Senate version of H.R. 2474 was hit with an unfair labor practice charge for recommending a pay raise amidst collective bargaining negotiations. If this situation occurred with H.R. 2474 signed into law, and the charge was upheld, could Senator Sanders' presidential campaign be assessed a civil penalty costing tens of thousands of dollars, simply for trying to reward its employees with a pay raise? Mr. King. Certainly, Mr. Allen, that would be a distinct possibility. And I think this goes to show that our Nation's labor laws are affected, they do work, they are alive, they are well. And even someone at that level in our political system has to abide by them. Mr. Allen. The workplace changes, in fact, the business world changes because of the e-commerce, and just everything moves rapidly. And so does -- the workplace looks much different than it did years ago, and so do benefits, so on and so forth. Much of what the unions fought for has been codified into law, eliminating issues from consideration and collective bargaining. One of the things unions still pride themselves on are healthcare plans that they negotiate for their workers. The Democratic member of this committee has introduced legislation cosponsored by nearly 120 House Democrats to ban private health insurance, including union plans, and force every American on to a government-run healthcare. How might banning union healthcare plans in a government takeover affect the value of unions for workers? Mr. King. This is another very poorly thought-out idea. The H.R. Policy Association, where I am counsel, works closely with our member companies, and we have found consistently that employer-sponsored health plans are popular, and are very much desired by the employees. And I believe as someone said recently, if you turn anything over to the government, totally, you have issues and that is exactly where we would be headed. So I can say on behalf of the H.R. Policy Association, and its member companies, and their employees, we should continue with our highly favorable and well-received employer sponsored healthcare plans in this country. Mr. Allen. And then finally, with the remaining time, union allies insist that right-to-work laws, giving workers the freedom to decide for themselves whether to join and pay a union to undermine the right to organize. Has giving workers this freedom of choice in any way changed the union organizing process? Mr. King. I have not seen any data, Congressman, that would connect the two thoughts. I don't know of any data that says right-to-work undermines union organizing. In fact, it can be just the opposite as I mentioned in a colloquy with one of your colleagues. I think this is another fallacy that is being stated here to support this legislation. Mr. Allen. Well, we have the greatest economy in the world, every business I have talked to is looking for workers. I think, obviously, it is a great opportunity for those in the work. I tell young people I have never seen opportunity like this before in my lifetime. So we are grateful for that. And thank you, and I yield back. Chairwoman Wilson. Ms. Underwood of Illinois. Ms. Underwood. Thank you, Madam Chair. I am so glad that we are having today's hearing as part of the committee's ongoing work to protect the basic rights that American workers have fought so hard to win. I would like to thank Mr. Alvarez for sharing his story, and for so clearly describing the American Dream, and the challenges and opportunities that you have gone through in your career. And I appreciate your willingness to share it with the committee today. Thank you. I am incredibly proud to cosponsor the Protecting the Right to Organize Act. We know that unions provide an essential foundation for working families in Illinois's 14th District and across the country. Recent research from the University of Illinois, for example, highlights the link between unions and better wages for all workers, even those who are not union members. And so, Mr. Griffin and Ms. Garden, in addition to better wages, how do labor laws that empower unions that benefit workers including -- I am sorry. How do labor laws empower unions that benefit workers, including those that aren't union members? Ms. Garden. Thank you for that question. So I guess I would emphasize that labor laws protect workers including non-union workers by protecting their rights to engage in collective activity at work, even short of electing a union to represent them in bargaining. That can mean things like talking with their coworkers about how much they earn, which could reveal discrimination and pay practices that workers can then either take to their boss and try to remedy, or take to court, if that is appropriate. When employers are aware that employees have the right to talk to each other, it can also encourage them to behave better. Ms. Underwood. Thank you. And Mr. Griffin. Mr. Griffin. The classic example of collective action in a nonunion workplace is a fairly old Supreme Court decision called Washington Aluminum, where people were working in a very cold environment and they wanted heat. It was a complete nonunion workplace. So, they walked off the job to force their employer to provide heat in a frigid workplace; and they were discharged. And the Supreme Court, in an opinion by Justice Black, said they were engaging in conduct that any civilized country would recognize as lawful, and the Supreme Court agreed with the Board and ordered the reinstatement. So, to Professor Garden's point, even in an unorganized workplace, the right to engage together to address workplace concerns, immediate workplace concerns, is protected under the National Labors Relations Act, and very importantly so. Ms. Underwood. Thank you. Some 60 percent of Americans have a favorable view of unions, and some 48 percent of workers who are not in a union would like to belong to one. However, only 6 percent of private sector workers belong to a union. Mr. Griffin, why is there such a wide gap? Mr. Griffin. I think there is essentially two reasons: Organized corporate opposition, which manifests itself in both legal opposition and illegal opposition: threats, firing, and things like that. And the law's inability to translate, to provide an efficient mechanism to translate people's desire to be represented by a union into actual union representation. So, I think there is really two reasons for it. Ms. Underwood. Strong laws that protect and empower workers must ensure that workers are clearly informed of their legal rights. Ms. Garden, in your testimony, you state that it is difficult for anyone who is not a labor lawyer to know what is allowed and what is not under Section 8(b)4 of the NLRA. How will be the PRO Act bring clarity to this area of law? Ms. Garden. Great. Thank you. So, Section 8(b)4 is worded in complex language. The NLRB's own website calls it mind-numbing. That level of complication is exacerbated by, you know, several decades now of Supreme Court and Board decisions putting glosses on 8(b)(4), often to attempt to save the statute from unconstitutionality. So, that means not only do you need to read and understand this complex language, you then need to read a whole stack of Board and court decisions to know what you can and cannot do. This isn't a problem that can be solved by tweaking 8(b)(4), and so, the PRO Act appropriately just goes back to the drawing board by getting rid of it. Ms. Underwood. Thank you all so much to our witnesses for being here today, and for our friends in the audience who fight so hard on behalf working families every day. We just heard one of our colleagues from another State lift up that State as a great place to do business, and yet, workers don't have the right to organize. They don't have the right to come together and bargain for safe workplaces or vacation days, as Mr. Alvarez said; and that, to me, cannot be a great place to do business. We are talking about a place that limits women's reproductive rights. That cannot be a great place to do business, and so here in the House, I am so glad that we have an opportunity to support legislation like this. And with that, Madam Chairwoman, I yield back. Chairwoman Wilson. Mr. Keller. Mr. Keller. Thank you, Madam Chair. And I would like to thank the panel for being here today. Looking at H.R. 2474, the Protecting the Right to Organize Act, Modernizing America's Labor Laws, people do have a right to organize, and they also have a right not to organize if they wish not to. And that is what, Mr. King, I would like to sort of focus on a little bit. There has been studies that show 90 percent of workers are represented by a union today that have never voted for that union to represent them in the first place. Last Congress, committee Republicans held several hearings on legislation reforming the National Labor Relations Act and the Labor Management Reporting and Disclosure Act to make unions more transparent and accountable to their membership. Drawing from your background and experience, what are your thoughts regarding the relationship between labor union accountability and transparency and the steady decline of unionization in this country? Mr. King. There is a great schism. I am familiar with the study you mentioned. It is a Heritage Foundation study where 90-plus percent of the workers that are represented today never had an opportunity to vote. As we have talked about here today, Mr. Keller, there is less and less resources apparently being devoted by labor organizations to organizing and member opportunity, and more for political activity, which leads to the worker, the union member, not having the attention that she or he should from their organization. I would disagree with Mr. Griffin in that the stats are clear that we have a low, a 75-year low, of union petitions being filed in this country; and as mentioned a couple of times already today, less than one tenth of 1 percent of the eligible workers in this country were sought for membership in 2018. So, there appears to be a great disconnect. I don't know necessarily why. I will leave that to the labor union leaders, but I think your question is spot on. Mr. Keller. Are there any things contained in H.R. 2474 that would reform or make reforms that make unions more accountable to and transparent to their membership? Mr. King. I could not find any. As I mentioned previously, all of the legislative proposals in this bill harm employees and employers, including only fines on employers. It is a very one-sided proposal. Mr. Keller. You mentioned fines on employers. H.R. 2474 undermines the original intent of the National Labor Relations Act by imposing severe monetary penalties, up to a $100,000 on employers for unfair labor practices, including on individual officers. Unions can also commit unfair labor practices under the NLRA such as earlier this year when the United Food and Commercial Workers Union tried to punish a worker for choosing to work rather than participate in a strike. What are some other unfair labor practices unions can commit? Mr. King. Failure to refer in a hiring hall situation and an individual that does not agree with the union for work; failing to permit a rational way for a member to resign, we have had numerous recent cases on that; failure of the union to permit our democratic process of voting; failure of the union to permit an individual to be a dissident and oppose the union and retaliation for such resistance; failure to provide duty of fair representation for the individual member in grievances and arbitrations. That is just a partial list. It is really remarkable to me, Mr. Keller, that this legislation ignores totally any type of sanction on the union. And, finally, per your point, not only do we have fines, this bill also proposes punitive damages and attorney's fees, again, only against employers. Mr. Keller. That actually answered my last question because my question was: Does the bill apply the same punishments to unions and union bosses found guilty of unfair labor practices as it levies on employers? And I guess the answer is -- the answer is no on that. Mr. King. And, Mr. Keller, if we are going to go down this path of putting civil penalties in the National Labor Relations Act, which I submit is not a good idea, but if we are going to go down that path, let's do it on an equal basis. Let's at least hold that rogue union responsible, just like the rogue employer. We do have outliers. There are certain unions and employers in this country that need to be held accountable, but this is not the solution. Mr. Keller. I would agree with that, and I thank you for that. I just want to make the important point that people in this country do have a right to assemble. They also have the right not to assemble and not to associate, and I think this bill goes a long way in taking rights away from people to freely assemble or not associate with certain organizations. I yield back my time. I thank you. Chairwoman Wilson. I thank you so much. Mr. Morelle of New York. Mr. Morelle. Thank you, Madam Chair, for holding this important hearing. And thank you to all the witnesses for being here to share your expertise. I grew up in a strong union home. My father was a proud lifetime member of the Plumbers & Pipefitters Union Local 13 in Rochester, New York, which instilled in me and my family a deep appreciation for the benefits that unions provide American workers across the country. However, for decades, we have seen the erosion of workers' rights to organize and collectively bargain, which is why this hearing is so important. So, on behalf of my constituents in the 25th Congressional District in New York, and the working men and women throughout the country, I am proud to support the committee's work to advance legislation that protects fundamental rights of the Nation's workforce. I have a couple of different questions. But first, if I could just start -- and I think perhaps, Mr. Griffin, this might -- you might be able to help me with this. I thought I heard earlier, or there seemed to be the suggestion made that workers who engage in violent behavior when picketing somehow have some protections in this bill, or could not be prosecuted. I don't think that is true. I know there has been bills introduced, designed to outlaw what I think is already illegal threats, robbery, physical violence. Is there anything that you know of that protects a worker from engaging in otherwise unlawful activities that relates to organizing? Mr. Griffin. No, I think -- thank you for the question. No. I think what was being referred to was anyone who engages in violent activity is prosecutable under various statutes, certainly prosecutable under State law; and there is nothing in this bill that addresses that in any way, shape, or form. I think what was being referred to was a decision in the Supreme Court under the Hobbs Act, the Enmons decision, which addresses whether, in addition to all the other ways you can be prosecuted, you can also be prosecuted under the Hobbs Act if you are a union member or agent, or for engaging in violent activity in the course of achieving a legitimate union objective, which was, in that instance, a collective bargaining agreement. But there is nothing in this bill that addresses that one way or the other. Mr. Morelle. Good. I just wanted to make it clear, Madam Chair, and to the members that -- I just wanted to clear that up that there is no blanket protection for people engaged in otherwise illegal or unlawful activities. I want to go back, because there are barriers that often restrict Americans from taking collective action for better wages and benefits. When the NLRA was amended in 1947, it put in place substantial restrictions, as I understand it, on workers' free speech rights; and many of these have enabled the National Labor Relations Board to prosecute workers in situations where they were peacefully seeking to improve labor conditions. And we have seen crackdowns on even the simplest form of collective bargaining actions organized by employees, and I wanted to point out one example that occurred recently in the case before the NLRB between the International Brotherhood of Workers, IBEW Local 357, I believe, and the Desert Sun Enterprise Limited. In the case, NLRB ruled that Local 357 made an unqualified threat simply because it had copied a second company on a letter regarding its plans to hold a picket at a common situs shared with the company the union had a dispute with. And they were deemed to be wrong, because the union did not provide a Moore Dry Dock assurance. I noticed, Professor Garden, you identified and addressed earlier, both in the conversation with Chairman Scott and in your testimony, the Moore Dry Dock assurance. But in my view, it violates basic freedom of speech rights, because it means a union's advanced notice of picketing may violate the law, even if the actual picketing is completely lawful. And I wonder -- the ruling denied, by the way, IBEW workers, their fundamental right to take collective action against an employer that paid its employees for far less than the area standards confirmed by the local labor commissioner's wage determination for electrical work. So, if I can ask you -- and I apologize, you are going to have to have a quick response. How does that Moore Dry Dock standard impact workers' right to take collective action? Could you just describe that? Ms. Garden. Absolutely. Well, the case you are talking about reveals this sort of fundamental irrationality, right? So, a union sends a letter to a neutral employer, says, you know, maybe it is just a heads-up, right, we are going to be picketing a struck employer at your site. Mr. Morelle. And that is a requirement of the law, or of the standard? Ms. Garden. Well -- Mr. Morelle. This -- Ms. Garden. So, the picketing would have to comply with these Moore Dry Dock factors in order to be entitled to this sort of safe harbor. The union can have every intention of intending to comply and -- I apologize for going a little bit over -- just may, nonetheless, find that it has committed an unfair labor practice, because it didn't know it had to say oh, and we are going to follow the law, right, something we don't usually say when we are conveying information to another person. Chairwoman Wilson. Thank you. Mr. Morelle. Thank you, Madam Chair. Chairwoman Wilson. Ms. Stevens from Michigan. Ms. Stevens. Thank you, Madam Chair. And thank you to our witnesses for the second hearing on the PRO Act that we are having here today. For many of us, this is what we came here for. I, coming from southeastern Michigan, a rich and profound history of labor traditions, the birth of our middle class, and the movement forward, join my colleagues in support of this legislation, and also, the opportunity to promote a 21st century labor movement that allows us to embrace the future of work and its changes to regional economies, like the one I represent. As the cochair of the Future of Work Task Force in the New Democratic Coalition, we are laser-focused on how to make sure the rules around labor standards and work meet the realities of this 21st century economy, and as work continues to evolve -- and it is also something that I monitor closely as a member of the Science Committee -- and new types of worker arrangements emerge, we must critically examine how the test for employment interact with the ability for small businesses, emerging tech companies, and tech companies writ large, to succeed in innovation and employment growth as this legislation moves forward. So, Ms. Garden, I note that there is multiple exemptions that are being sought to this ABC language, some of which is at the State level. How can we ensure that employers have these clear and reasonable instructions to classify employees while also maintaining protections for workers? Ms. Garden. I mean, the ABC test is really very clear. People, it will help people to know whether they are an employee or whether they are an independent contractor when they start work. The previous test, the sort of multifactor test from the restatement of agency, leads to gamesmanship. It leads to protracted litigation as the sort of multiyear litigation over whether FedEx drivers were independent contractors are not revealed. So, the ABC test, I think, really sort of helps everybody plan for the future by making it clear who is an employee. Ms. Stevens. And so just to be clear, does collective bargaining allow employers flexibility in what they can bargain for at the table with their workers? Ms. Garden. Oh, absolutely. There is no such thing as a one-size-fits-all collective bargaining agreement. That is the nice thing about a system of private ordering like bargaining. Ms. Stevens. And, Mr. Griffin, your testimony discusses the value of protecting rights under the NLRA but what -- but those rights have not been obviously fully exercised under, you know, a number of cases and maybe for some reasons. If you had to prioritize, what are the top three weaknesses in the NLRA that would make the law more effective in protecting the rights of workers to organize and collectively bargain? Mr. Griffin. Well, I think many of them are addressed in this legislation; and the reason that they are addressed is because they are not just my view, but they are pretty much consensus view. The first is the coverage of how many workers are covered. There are a lot of different exemptions, and there is the independent-contractor-complicated test that doesn't allow for coverage of a lot of people who really are properly classified as employees. Secondly, the remedies under the Act are weak, and really don't penalize employers sufficiently for engaging in unlawful conduct. And, third, there is a lack of people's understanding of their rights. People don't know what their rights are, and this law joins many of the other federal labor standards law by adding a specific notice posting provision that requires people to be advised of their rights in the workplace. Ms. Stevens. Yeah, great. Thank you. Those are my questions. I yield back the remainder of my time. Chairwoman Wilson. Thank you so much. And now, since all of the committee members have spoken, let's welcome Mr. Kennedy of Massachusetts. Thank you. Mr. Kennedy. Thank you, Madam Chair. I am grateful for the opportunity to join you today. Thank you for holding this important hearing and for this critical piece of legislation. Over the past four decades, our economy has shifted dramatically. Companies and corporations have opened, shuttered, and opened again. Jobs have moved, jobs have changed, and some have vanished. But if there is a defining theme over the past four decades, it is the systematic assault on worker clout that is leading to stagnant wages, historic economic inequality, and all undermined by a sustained attack on union labor and bargaining rights. While CEOs, on average, make 287 times more than those they employ, a minimum wage worker cannot afford a two-bedroom apartment in any corner of our country. That is a crisis, a crisis that will only grow worse if this government continues to turn a blind eye or, even worse, continues to roll back protections for workers; and no one in this country will feel that pain more acutely than contract workers who are denied decent protections and benefits. At a moment when we are only years away from potentially half of American workers being classified as contract workers, we are on the precipice of an economic disaster. Instead of pointing to market forces and ceding influence to corporations, it is time that Congress stepped forward, protect our economy, protect those employees. So, Mr. Alvarez, to begin, do you know the personal stake that the XPO CEO has in your company? Mr. Alvarez. No, I don't. Mr. Kennedy. About $2 billion. Do you know how much he directed his company to spend in a stock buyback this past year? Mr. Alvarez. No, I don't. Mr. Kennedy. About $2.5 billion. Do you or any other additional contract workers, your colleagues, benefit from the -- did they benefit at all from that stock buyback through a bonus or a raise? Mr. Alvarez. No. Mr. Kennedy. A dime of that $2.5 billion? Mr. Alvarez. No. Mr. Kennedy. Mr. Alvarez, if I can ask, if you were to be classified as a full employee from XPO, which, if I understand, you wear XPO clothing labeled with XPO, do you not? Mr. Alvarez. Yes. Mr. Kennedy. And if you were actually classified as a full employee of XPO, how much more would you earn annually? Mr. Alvarez. That is something the coworkers will bargain for. Mr. Kennedy. And would XPO contribute to any sort of retirement account for you? Mr. Alvarez. What was the question? Mr. Kennedy. Would you be able to benefit from a retirement account if you were a full-on employee? Mr. Alvarez. Yes. Mr. Kennedy. Do you know how much they would make in that contribution? Mr. Alvarez. No, I don't. That was something we would bargain for. Mr. Kennedy. But at the moment, because, you are not actually a full employee, but you are a contract employee, you wear their apparel but do not benefit from that arrangement? Mr. Alvarez. Correct. Mr. Kennedy. So, let me start with Ms. Garden. Professor, I would like to talk to you about an emerging industry and the workforce it employs, our tech sector. Google employs over 200,000 workers today. More than half of those workers are classified as temporary workers or contractors. Facebook employs roughly 15,000 contract moderators globally, many working in poor or even dangerous conditions, doing some of the worst content that exists on the Internet with very little support, resources, or even job security. So, Professor, could you explain to me how the PRO Act and the end of employment classification could help us prepare for this new workforce? Ms. Garden. Yeah, absolutely. One thing that has changed as work has evolved is the sort of technology that companies use to control how work is done in ways that the company say don't require them to take responsibility for the welfare of those workers. So, the PRO Act would help to change that by adopting a clear definition of who is an employee that comports with most people's sort of understanding of what their job is and who they work for. Mr. Kennedy. Mr. Griffin, same question to you. Mr. Griffin. I would give essentially the same answer. I think that if Google is classifying people as contractors, and if those people would be employees under the - - likely be covered by the National Labor Relations Act, if they were determined to be not independent contractors under the ABC test, then they would be able to exercise rights that they are not able to exercise currently. Mr. Kennedy. Have you seen, in your opinion, sir, an erosion of workers protections, worker clout over recent American history? Mr. Griffin. Yeah, well, I think what we -- what I saw, I had a number of cases when I was the General Counsel that involved gig economy employers that had classified people as independent contractors, and I would note that in no instance did they come forward and produce a legal opinion that went through the 10 factors and said we considered this before we classified the people. They just started out on the theory that they wouldn't treat them as employees. They would not provide them benefits or the protections of the National Labor Relations Act; and so, yes, I have seen that in a number of gig economy -- Mr. Kennedy. All this at a time when corporate profits are at a historic high? Ms. Garden. The facts are what the facts are. Mr. Kennedy. Thank you. I yield back. Chairwoman Wilson. I thank you. I remind my colleagues that pursuant to committee practice, materials for submission for the hearing record must be submitted to the committee clerk within 14 days following the last day of the hearing, preferably in Microsoft Word format. The materials submitted must address the subject matter of the hearing. Only a member of the committee, or an invited witness may submit materials for inclusion in the hearing record. Documents are limited to 50 pages each. Documents longer than 50 pages will be incorporated into the record via an Internet link that you must provide to the committee clerk within the required timeframe, but please recognize that years from now, that link may no longer work. Again, I want to thank the witnesses for their participation today. What we have heard is very valuable. Members of the committee may have some additional questions for you, and we ask the witnesses to please respond to those questions in writing. The hearing record will be held open for 14 days in order to receive those responses. I remind my colleagues that, pursuant to committee practice, witness questions for the hearing record must be submitted to the majority committee staff, or committee clerk within 7 days. The questions submitted must address the subject matter of the hearing. Before recognizing the Ranking Member for his closing statement, I ask unanimous consent to enter the following materials into the record: letters from the Amalgamated Transit Union, the Labors' International Union of North America, and the United Steel Workers in support of the PRO Act. Without objection, so ordered. [The information follows:] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Chairwoman Wilson. I now recognize the distinguished Ranking Member for his closing statement. Mr. Walberg. Mr. Walberg. I thank you, Madam Chair. And I would vote for any of the pronunciations of that word, and I would ask my staff never to put that in front of me either. I do ask unanimous consent to place in the record letters from the following organizations opposing H.R. 2474: The Coalition for a Democratic Workplace; the International Franchise Association; the National Association of Home Builders; the American Hotel and Lodging Association; Associated Builders and Contractors; and the U.S. Chamber of Commerce. [The information follows:] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Mr. Walberg. Thanks to the panel for being here, and thanks, Madam Chair, for a good hearing. I say that because this hearing, I think, at least I think, made crystal clear the stark contrast of the competing agendas on whether union boss success should be priority number one or employee/employer success should be priority number one. I truly believe that employees and employers being successful together only extends the opportunity for success. I would also hasten to say, as a former steel worker at U.S. Steel South Works, south side of Chicago, No. 2 Electric Furnace, that my job there was safer, my benefits were better than they would have been, had not the union involved themselves in providing some enhancements over the years to the point of 1969, when I came there and worked. And there is a place for that; but there is a place for each employee to make the decisions on her best or his best self-interest, on the basis of value, of what they purchase or join or involve themselves with. I believe the best way to bring success to the employee is to also allow employers to succeed as well. Nothing that I see in this bill, the PRO Act, H.R. 2474, I believe, offer that opportunity for both sides. In fact, I think it takes us backwards. Choice and flexibility are key, I believe, to success, choice and flexibility. This bill offers no flexibility, except to one side. That is not flexibility. It takes away choice even for employees. In my State, where the citizens supported a right to choose, a right to work for employees in a longstanding union state of Michigan, the home of the auto industry, motor capital of the world, they made that choice and employees still have a choice whether they can join or not join a union, and they make those choices. There were statements made today with broad-sweeping brush strokes about the need to have this legislation because of income levels, income inequality, the middle income going down, and all of the rest. I would not hesitate to state they were broad-brush statements not making apples-to-apples judgments, but rather apples-to-oranges or banana judgments, and I am pleased that we will insert in the record alternative viewpoints with a much clearer understanding of what was there. But let me just state median household income, for instance, reached its fifth straight record high last year, over $61,000, median income. Those are the middle-class workers that I represent in my district, and I could go on and on with actual statistics, not taking outside outliers and pulling them in, and I think we need to understand that as well. Mr. Alvarez, thank you for coming all the way here. You are an individual at this point in time who is highly sought after. I would encourage you to come to Michigan. I know you like California. It is a lower-cost living state in Michigan, and there are 60,000 not simply in Michigan, but at this point in time the last number I saw was 60,000 truck seats unfilled. You are highly sought after. I was put into the driver's seat of an 18-wheeler, and encouraged the double shift, double clutch a lot better than I actually did. They didn't hire me but they said they would train me and they would put me in a seat, and these would be in seats in either Teamster union operations or private contractor operations as well. You have choices, and you have skills. Whether you go into aviation or not, you have skills that are marketable now. This legislation I don't believe would assist in that. So, Madam Chair, I appreciate the chance to have this crystal-clear difference hearing today, but I would certainly hope we wouldn't go backwards, that we would not move this legislation that I think would ultimately hurt the opportunities for people to have those choices, make those decisions, and have the flexibility to do what America has always proposed. Thank you, and I yield back. Chairwoman Wilson. Thank you, Mr. Walberg. I now recognize myself for the purpose of making a closing statement. I thank you, again, to all of our witnesses for your testimonies today. Today, we heard compelling testimony on how the changing relationship between employers and employees is undermining workers' ability to exercise their collective bargaining rights and negotiate for better wages, benefits, and working conditions. We heard from Mr. Alvarez how hard it is for him; and we learned from Professor Garden as the number of subcontracted freelance and third-party workers increase, employers are incentivized to exploit loopholes in the National Labor Relations Act to misclassify employees, subcontract work to evade labor laws, and restrict workers' rights to peacefully protest. To make matters worse, the Trump administration is further enabling employers to exploit these weaknesses in labor law. From attempting to reverse the Browning-Ferris decision to denying SuperShuttle workers the right to organize, Republicans at the National Labor Relations Board continue to erode workers' rights to join a union, and to negotiate with their employers. But, more importantly, we discussed the long-overdue steps that Congress can take, and should take, to ensure our Nation's labor laws protect the right to organize. By passing the PRO Act, we will provide workers with the safeguards they need for a modern economy. This bill will prevent workers from being misclassified as independent contractors, and will prevent employers from evading their obligations under the law. And we will repeal the provisions that violate workers' First Amendment rights. Once again, I thank the witnesses for being here. I thank you, Ms. Garden, Mr. Alvarez, Mr. King, and Mr. Griffin. And I thank my colleagues for a constructive HELP subcommittee hearing. If there is no further business, without objection, this committee stands adjourned. [Additional submission by Mr. King follows:] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] [Additional submissions by Mr. Walberg follow:] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] [Additional submission by Ms. Wilson follows:] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] [Questions submitted for the record and their responses follow:] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] [Whereupon, at 12:52 p.m., the subcommittee was adjourned.]