and "the impact of the unfair labor practices on the charging party, on other persons seeking to exercise rights guaranteed by the act, or on the public interest." CHANGES IN EXISTING LAW (Except as noted, existing law proposed to be omitted is enclosed in brackets, new matter is printed in italics, and existing law in which no change is proposed is shown in roman.) Section 9 (c) (1) Wherever a petition shall have been filed, in accordance with such regulations as may be prescribed by the Board (A) by an employee or group of employees or any individual or labor organization acting in their behalf alleging that a substantial number of employees (i) wish to be represented for collective bargaining and that their employer declines to recognize their representative as the representative defined in section 9(a), or (ii) assert that the individual or labor organization, which has been certified or is being currently recognized by their employer as the bargaining representative, is no longer a representative as defined in section 9(a); or (B) by an employer, alleging that one or more individuals or labor organizations have presented to him a claim to be recognized as the representative defined in section 9(a); the Board shall investigate such petition and if it has reasonable cause to believe that a question of representation affecting commerce exists shall provide for an appropriate hearing upon due notice. Such hearing may be conducted by an officer or employee of the regional office, who shall not make any recommendations with respect thereto. If the Board finds upon the Record of such hearing that such a question of representation exists, it shall direct an election by secret ballot and shall certify the results thereof. If at the end of 45 days following the date the petition shall have been filed, there are unresolved issues concerning the unit appropriate for the purposes of collective bargaining, or the eligibility of challenged voters, the Board shall direct an election by secret ballot in the unit sought by the petitioner and announce the results thereof. The Board shall then expedite the resolution of the disputed issues. If the Board determines that the unit sought by the petitioner is appropriate, or that the challenged ballots will not affect the outcome of the election, the Board shall certify the results of the earlier election. If the Board determines that the unit sought by the petitioner is not appropriate, or that the challenged ballots will affect the outcome of the election, it shall direct a new election by secret ballot and shall certify the results thereof. (c) (3) No election shall be directed in any bargaining unit or any subdivision within which, in the preceding 12-month period a valid election shall have been held. Employees engaged in an economic strike who are not entitled to reinstatement shall be eligible to vote under such regulations as the Board shall find are consistent with the purposes and provisions of this act in any election conducted within [12] 18 months after the commencement of the strike. In any election where none of the choices on the ballot receives a majority, a run-off shall be conducted, the ballot providing for a selection between the two choices receiving the largest and second largest number of valid votes cast in the election. Section 10 (c) The testimony taken by such member, agent, or agency or the Board shall be reduced to writing and filed with the Board. Thereafter, in its discretion, the Board upon notice may take further testimony or hear argument. If upon the preponderance of the testimony taken the Board shall be of the opinion that any person named in the complaint has engaged in or is engaging in any such unfair labor practice, then the Board shall state its findings of fact and shall issue and cause to be served on such person an order requiring such person to cease and desist from such unfair labor practice, and to take such affirmative action including reinstatement of employees with or without back pay and making employees and employers whole when the Board deems such relief appropriate, for the loss of economic benefits or business opportunities, resulting from a violation of sections 8(a)(5) or 8(b)(2), and to provide such other remedial relief, as will effectuate the policies of this act: Provided, that where an order directs reinstatement of an employee, back pay may be required of the employer or labor organization, as the case may be, responsible for the discrimination suffered by him: And provided further, that in determining whether a complaint shall issue alleging a violation of section 8(a) (1) or section 8(a)(2), and in deciding such cases, the same regulations and rules of decision shall apply irrespective of whether or not the labor organization affected is affiliated with a labor organization national or international in scope. (j) The Board shall have power, upon issuance of a complaint as provided in subsection (b) charging that any person has engaged in or is engaging in an unfair labor practice, to petition any district court of the United States (including the District Court of the United States for the District of Columbia), within any district wherein the unfair labor practice in question is alleged to have occurred or wherein such person resides or transacts business, for appropriate temporary relief or restraining order. When seeking such temporary relief or restraining order the Board shall consider factors including but not limited to the following: the clarity, widespread or repetitious nature of the alleged violations; the likelihood that the efficacy of the Board's final order may be nullified, in the absence of such interim relief, the brevity of the career opportunities or seasonal nature of the employment relationship, when measured against the normal time span of the administrative processes; and the impact of the unfair labor practices on the charging party, on other persons seeking to exercise rights guaranteed by the act, or on the public interest. Upon the filing of any such petition the court shall cause notice thereof to be served upon such person, and thereupon shall have jurisdiction to grant to the Board such temporary relief or restraining order as it deems just and proper. Mr. THOMPSON. Our first witness today is Mr. Thompson of the Chamber of Commerce and it is a pleasure to see you again. We have your statement and you may proceed with it as you wish, and without objection your statement, in full, including the footnotes, will be made a part of the record at this point. [Prepared statement of Robert T. Thompson follows:] PREPARED STATEMENT OF ROBERT T. THOMPSON, CHAIRMAN, My name is Robert T. Thompson. I am a partner in the law firm of Thompson, Ogletree and Deakins of Greenville, South Carolina, and I am Chairman of the Labor Relations Committee of the Chamber of Commerce of the United States and a member of the Chamber's Board of Directors. With me are Gerard C. Smetana, a partner in the law firm of Borovsky, Smetana, Ehrlich & Kronenberg of Chicago, Illinois, and Vincent J. Apruzzese, a partner in the law firm of Apruzzese and McDermott of Springfield, New Jersey. Messrs. Smetana and Apruzzese are members of the National Chamber's Labor Relations Committee. Also accompanying me is Richard B. Berman, the Director of Labor Law for the National Chamber. On behalf of the Chamber, I wish to thank you for this opportunity to comment on several legislative proposals under consideration by the Committee which would significantly amend the National Labor Relations Act and the procedures of the National Labor Relations Board. We shall also present the Chamber's views on several proposals which we believe would constitute more appropriate and more productive changes in the administration of the Act. The National Chamber is the largest federation of business and professional organizations in the United States, and it is the principal spokesman for the American business community. The National Chamber represents over 3,700 State and local Chambers and trade associations. It has a direct membership of over 52,000 business firms and an underlying membership of approximately five million individuals and firms. Over the years, the Chamber has played an active role in presenting the views of its membership concerning proposed legislation in the field of labormanagement relations. It has also participated, either as a litigant or as amicus curiae, in significant labor law decisions of the courts and administrative agencies which have helped to develop our national labor policy. Far-reaching proposals to modify the decision-making processes of the National Labor Relations Board, to create new remedies for discriminatory conduct, to enlarge the area of collective bargaining, and to change the basic philosophy of the Act from a remedial statute to a punitive one are obviously of great concern to our members and to the Chamber as their representative. We, therefore, welcome this opportunity to discuss such issues with you, and to present our proposals concerning basic reforms in the administration of the National Labor Relations Act. Legislative proposals now before the Committee come in the fortieth anniversary year of the National Labor Relations Board. In signing the Act into law, President Roosevelt stated that its acceptance by management, labor and the public with a sense of sober responsibility and of willing cooperation, serves as an important step towards the achievement of justice and peaceful labor relations in industry. Contributing in large measure to that acceptance over the years has been the confidence of management, labor and the public in the guarantee of due process through established procedures for review by the Board and the courts and in the equitable and remedial, rather than punitive, approach inherent in the Act to the remedy of unfair labor practices. Proposed changes in the Act contained in legislative amendments currently pending before this Committee would seriously disrupt those established procedures. They would undermine the confidence of the parties and produce instability in labor-management relations. The Chamber is not opposed to constructive change. It does, however, vigorously oppose change which would disturb that delicate balance of rights and obligations so ingrained in our labor law. Our initial comments, presented by myself and Mr. Apruzzese, will outline the basis for the Chamber's objections to the proposed amendments. We shall then proceed to Mr. Smetana's presentation of our proposals for several basic reforms in the administration of the Act. H.R. 8110 H.R. 8110 does not represent a new approach to the alleviation of the Board's case load. In fact, it represents an old approach that has received extensive and careful consideration over a period of years and has consistently been rejected.1 Indeed. H.R. 8110 represents a greater erosion of the basic principles of the Act than did its predecessor. The right of denovo review by the National Labor Relations Board is an integral part of the fabric of the Act. For the sake of expediency H.R. 8110 would delegate the Board's powers under Section 10 to its administrative law judges. This would reduce the right of review by the Board to a matter of privilege. Investigation of similar proposals in the past discloses that the Board would, in all probability, limit review of an administrative law judge's decision to instances where the decision was "clearly erroneous". The imposition of such a standard would deprive the parties of their existing right to a decision by the Board and would confer administrative finality upon decisions of administrative law judges which, while failing to meet the standard of "clearly erroneous”, nevertheless may improperly apply the law to a given set of facts. In remarks before the American Bar Association, Chairman Murphy recently reported that last year the Board adopted 73.6% of all administrative law judge findings in cases involving Section 8(a)(3) of the Act and 75.5% of their findings in cases involving Section 8(b) (2). While those figures are impressive at first glance, they nevertheless reveal that in one out of four cases of alleged 1 H.R. 8110 was originally placed before the 92nd Congress as H.R. 7152 where it failed to receive congressional approval. H.R. 7152 was, in turn, a modified version of a bill introduced in the 91st Congress, H.R. 11725, which was itself a version of Reorganization plan Number 5 which the 87th Congress rejected in 1961. Each of these prior proposals would have authorized the Board to delegate to its Trial Examiners, now Administrative Law Judges, its powers under Section 10 of the Act to prevent the commission of unfair labor practices under Section 8(a) (3) and 8(b)(2). Only H.R. 7152 among the predecessors of the present bill would have created a right of action in the United States District Court and provided for treble damages in the event of discrimination in violation of Section 8(a)(3) and 8(b) (2) of the Act. Whereas the bill considered by the 92nd Congress would have permitted review of a Trial Examiner's decision upon the affirmative vote of two members of the Board, the present bill would require a majority vote of the Board before review could be obtained. It should be noted here that versions of this bill have been rejected on two occasions, in 1966 and 1975, by the Labor Law Section of the American Bar Association, represent. ing attorneys for both labor and management. discrimination, by either an employer or a labor organization, the administrative law judge reached a conclusion which was unacceptable to the Board. To reduce the right of review by the Board to a matter of privilege in cases of obvious error would not have the effect of increasing the acceptability of administrative law judge decisions but rather of lowering confidence in the entire process and increasing the number of appeals to the equally burdened Federal courts of appeal. More importantly perhaps, it would undermine that public confidence conducive to voluntary compliance with decisions of the Board. Recent statistics mirror confidence in final Board action while evidencing a lack of acceptance of rulings by administrative law judges. In fiscal year 1974, the Board closed 1,105 unfair labor practice cases by obtaining compliance with an order issued by an administrative law judge, the Board or a court. Of these 1,105 cases, only 28 were closed as a result of compliance with an administrative law judge's decision. In contrast, the respondent complied with the Board's order in 709 cases or 64.2% of all cases. Only 368 cases were closed as the result of compliance with a court order. These figures demonstrate that parties to unfair labor practice cases simply do not have confidence that the Board would necessarily reach the same conclusion as administrative law judges. Chairman Murphy, in her testimony before this Committee on July 15, 1975, commented upon the present "critical shortage" of qualified judges. More recently, before the American Bar Association, she related that at present there are 76 judges out of an authorized 100, only 72 of whom go out into the Regions and hear cases. Cumbersome and time-consuming civil service procedures and limited compensation discourage qualified applicants to the extent that the Chairman intends to alleviate this "critical shortage" by recruiting from the civil service register candidates "without any extensive labor law background". That selection certainly will not lead to greater confidence in administrative law judges and may result in an even higher percentage of error. The effect of this bill would be to delegate the Board's important policymaking powers to a body of administrative law judges who have never received congressional examination or approval, who may or may not have the qualifications necessary for the exercise of such important duties, and who are yet to achieve that degree of public confidence which assures not only the correction of past transgressions but the prevention of future wrongs. Most significantly, that degree of uniformity now achieved through Board decisions would be seriously impaired leaving labor and management without definitive standards and precedents to guide their conduct. The limitations of this bill would perhaps be more palatable if its expressed time-saving purpose could be achieved. We fail to see, however, where a significant amount of time will be saved. Parties must be granted adequate time to prepare their Request for Review and supporting briefs. The Board members and their staffs would in turn be required to review each such submission and perhaps the record in its entirety in determining whether review should be granted. Surely, whatever time would be saved initially would be more than counter-balanced by the increased recourse to judicial review by the courts of appeal. While the Chamber agrees that we must continue to seek means to expedite the Board's decision-making process-and we shall present our proposals to accomplish that end-H.R. 8110 would fail to achieve that purpose. Rather, H.R. 8110 has the potential of causing disruption, instability and erosion of public confidence. This is particularly true in view of other features of this bill which would make adverse administrative law judges decisions prima facie evidence of a violation in treble damage suits before the United States District Court. Decisions of administrative law judges, questionable as they may be, and even though proven wrong in 25% of the cases disposed of last year, would become prima facie evidence of a violation. Their decisions would attain that stature in the Federal district courts even though the parties were deprived of the discovery procedures normally associated with the litigation of causes in the courts as opposed to the processing of cases before the Board. Moreover, the creation of a right of action in Federal district court coupled with the recovery of treble damages, costs and attorney's fees will neither save time in the ultimate disposition of discrimination/unfair labor practices or accomplish the avowed purpose of deterring such violations. It will, however, drastically undermine the delicate framework of the Act by changing it from a remedial statute to one of a punitive nature. 71-172-76-2 In fiscal year 1974, the National Labor Relations Board closed 27,016 unfair labor practice cases. In its Annual Report, the Board stated that the pattern of disposition of these cases was as follows: Withdrawals before complaint36%; Dismissals before complaint-32%; Settlements and adjustments-25.5%. This pattern demonstrates that the overwhelming number of unfair labor practice cases are resolved without the necessity of formal action by the National Labor Relations Board. As a matter of fact, Chairman Murphy testified that 94% of the Board's cases are resolved before getting to the Board or to the Enforcement Division of the General Counsel's offices. Even a random or cursory examination of 8(a)(3) and 8(b) (2) cases reveal few, if any, flagrant or readily discernible violations. Rather, the finding of an unfair labor practice normally requires an examination of the respondent's motive or intent as drawn from subtle inferences or reflected by circumstantial evidence. Difficult credibility resolutions are often required to determine whether a violation has indeed been established. Often, violations are attributable to, or established from, the acts of subordinates, who either are not conscious that their conduct constitutes a violation or who proceed under a misplaced zeal to protect what they envision as the rights of their company or union superiors. Most assuredly, the nature of such violations does not warrant punitive damages and the only effect of the treble damage provision of H.R. 8110 would be to penalize an employer or a union thrice for a mistake in judgment. The present remedial features of the Act already invoke what is, in reality, a double monetary penalty upon an employer who discriminates against an employee because of his involvement in union or protected activities. The discharge of such an individual exposes the employer not only to liability for back pay and interest but the expense inherent in the hiring of a replacement and in the employment of counsel to defend its action before the Board. Would the imposition of treble as opposed to double damages be any more of a deterrent? We believe not. Experience has demonstrated that the greatest deterrent to the commission of unfair labor practices of this nature is the reinstatement and notice posting features of the Board's present remedies and their impact upon the work force or union membership. Punitive damages may, but probably will not, deter a conscious wrong-doer. They will, however, indiscriminately punish an employer or labor organization found guilty by a subtle analysis of circumstantial evidence and one who committed the violation not by design but by ignorance of the law or by a mistake in judgment. Change from a remedial to a punitive approach will create an adversary atmosphere now not present in the investigatory stages of a proceeding before the Board and will heighten the adversary character of Board litigation. Conscious of their exposure to treble damages in the federal courts, parties will hardly cooperate in the investigatory procedures of the Board which contribute so significantly to the high settlement rate achieved in recent years. In fact, the federal cause of action and treble damage features of H.R. 8110 are contrary to the fabric of our national labor relations policy and are counter-productive to the encouragement of cooperation which serves as an important step toward the achievement of justice and peaceful labor relations in industry. H.R. 8409 H.R. 8409 is equally as repugnant to the purposes of the Act and as counterproductive. This bill provides that where a person is found to have willfully or flagrantly violated the Act or engaged in a pattern or practice of unfair labor practices designed to interfere with Section 7 rights, the Board would certify the identity of such person to the Comptroller General. The Comptroller General would then distribute to all agencies of the United States a list of such violaters who would be debarred for a period of three years from receiving government contracts unless there is no other source for the material or services provided by such person. Again, this bill would change the basic thrust of the Act from a remedial to a punitive nature. Strangely enough, the bill would penalize those employees whom it is supposedly designed to protect. Many firms depend for their existence upon government contracts. For example, if a textile company manufacturing fabrics to be used by the armed forces suffered debarment from government |