NCPA - National Center for Policy Analysis

Protecting Small Businesses From Labor Regulators

March 26, 1998

Small business advocates are supporting a bill called the Fairness for Small Business and Employees Act. The legislation is designed to protect small businesses and their employees from what critics contend are unfair practices by the National Labor Relations Board (NLRB).

Here are a few of their complaints:

  • NLRB prosecutors often choose cases with weak defendants, knowing that fighting a complaint will often cost a small company between $5,000 and $100,000 -- a sum many can't afford.
  • Some unions trap employers through a practice called "salting," whereby dozens of union activists show up at a nonunion company and apply for work, filing unfair labor practice charges if they aren't hired -- or if they are hired, creating mayhem to get themselves fired, and then filing charges.
  • Right now, the median time for the NLRB to process an unfair labor practice case is 546 days -- leaving both employers and employees in a prolonged state of uncertainty.

Supporters of the legislation under consideration explain that it would make the NLRB pay attorneys' fees of smaller companies that fight and win. Such a "loser pays" provision would curb bureaucratic zeal and reduce the number of frivolous actions, they say.

The bill would also clarify workplace rules so that an employer isn't forced to hire or keep on the job any person with ulterior motives. Finally, the NLRB would be required to resolve a dispute within a year or explain why the case is too complicated for swift action.

Source: David L. Thompson (Small Business Survival Committee), "Labor Reform: Pro-Business and Pro-Worker," Investor's Business Daily, March 26, 1998.


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