Roe Statement: Hearing on "The Persuader Rule: The Administration's Latest Attack on Employer Free Speech and Employee Free Choice"
I’d like to start by saying that we are now in the seventh year of the economic recovery—the slowest recovery in our nation’s history. Although we’ve made progress over the years, we have a long way to go for the economy to reach its full potential. Millions of Americans are still stuck in part-time jobs when what they really need is full-time work. Too many working families are struggling with stagnant wages, and the workforce participation rate is at its lowest point since the 1970s.
These are very real challenges facing middle-class families, and advancing responsible solutions to address them should be the top priority of this administration. Unfortunately, this administration has spent more time advancing the interests of Big Labor at the expense of American workers and employers, and the Department of Labor’s “persuader” rule is the latest example. This new regulatory scheme may boost union dues, but it will do absolutely nothing to boost our economy or expand opportunities for the middle-class.
Under the guise of promoting fair and democratic union elections, the persuader rule upends over half a century of labor policy by changing the interpretation of the well-established “advice exemption” of the Labor-Management Reporting and Disclosure Act. When it enacted the law in 1959, Congress wanted to ensure employers were able to receive basic legal advice on union-related matters in order to protect the ability of workers to hear from both sides of the debate. Now, over fifty years later, the administration is attempting to rewrite the law through executive fiat.
There are far-reaching consequences for this dramatic change in long-standing labor policy. First, this extreme and partisan rule will chill employer free speech. Union elections are complex matters, with a host of legal issues to navigate and understand. Many employers, acting in good faith, seek outside advice to ensure they’re in compliance with the law when communicating with their employees about union elections. But under the “persuader” rule, they’ll face onerous, costly, and invasive new requirements that will force them to report virtually all contact with advisors and undermine their ability to communicate with workers during union organizing campaigns. Adding insult to injury, union bosses remain exempt from the same requirements.
As the American Bar Association has expressed, this is an attack on the fundamental right of employers to seek legal counsel. We are fortunate to have Bill Robinson, former president of the American Bar Association, with us today to discuss this concern in more detail. It’s a concern shared by State Attorneys General across the country.
As is often the case with this administration’s flawed policies, small businesses will bear the brunt of the burden. Large businesses have teams of in-house attorneys to make sense of a confusing and complex set of labor rules. But small businesses don’t. With far fewer resources, small businesses will struggle to navigate the maze of federal labor rules and requirements. Some will become tied up in bureaucratic red tape and mistakenly run afoul of the law while trying to do what’s best for their employees.
But let me be clear. America’s workers will be hurt the most. Union elections aren’t just complex legal matters, they’re personal matters. The decision to join or not join a union is an important one that has a direct impact on the livelihood of millions of families—their paychecks, their benefits, and their work schedules. It’s critical that workers are able to hear from both sides and receive all the information they need to make a fully informed decision. But this rule will stifle debate and restrict worker free choice—with the sole purpose of stacking the deck in favor of organized labor.
As I alluded to earlier, the real shame in all of this is that the administration’s priorities are completely out of step with the needs of the American people. It’s time for the administration to focus on creating jobs and growing the economy instead of playing politics with the policies that shape our nation’s workforce. And with that, I yield to Ranking Member Polis for his opening remarks.
I would like to begin by thanking our colleague, Dr. Roe, for his leadership on this very important issue. Since 2011, he has served as the chairman of the Subcommittee on Health, Employment, Labor, and Pensions. Throughout his service as chairman, he has helped lead the fight for responsible policies that would strengthen the retirement security of working families.
In fact, Dr. Roe has led our efforts to hold the Department of Labor accountable for its attempt to rewrite the rules governing investment advice. We have spent a lot of time in recent years focusing on this issue because it is vitally important to millions of low- and middle-income families; it is vitally important to our small business owners and the men and women they employ; and it is vitally important to the health and well-being of our nation’s future.
Since this regulatory process began roughly six years ago, we made it clear that we believe there should be greater protections for those investing and planning for retirement. We also made it clear that we would not support a regulatory regime that restricts access to affordable financial advice and makes it harder for working families to save for retirement. Unfortunately, that is precisely what we have today.
Despite the significant concerns of policymakers on both sides of the aisle and both sides of the Capitol, the department charged ahead with an extreme, partisan regulation. The final rule does include some modest changes that will no doubt appease a few detractors, but make no mistake, the rule is still fundamentally flawed and harmful to those saving for their retirement.
The department’s final rule will still encourage frivolous litigation and drive up costs for those who can least afford it. The rule will still limit the educational information people with IRAs can receive. The rule will still hinder access to certain options individuals have to plan for their retirement. And the rule will still make it harder for small businesses to provide retirement options to their workers.
This has become ObamaCare for retirement planning: Dramatic change imposed on the lives of working Americans that will drive up the cost of retirement advice and force people to lose access to their trusted advisors. Regardless of the rhetoric we hear about the rule and why it’s necessary, it will be low- and middle-income families who are hit the hardest. The wealthiest Americans won’t feel a thing. They will continue to pay high-priced advisors to manage the details of their investments and retirement portfolios just like they did before this rule.
Wealthy Americans can afford to pay for this level of financial assistance, low- and middle-income families, on the other hand, cannot. As is often the case, the very men and women we want to protect will be hurt the most.
The fact that this all could have been avoided makes it even more unfortunate. There is broad, bipartisan agreement we need to strengthen protections for those saving for retirement. Republicans and Democrats even agree financial advisors should be required to serve their clients’ best interests. Again, thanks to the leadership of Dr. Roe, Congress has put forward a responsible, bipartisan alternative that would strengthen protections without hurting middle-class families and small businesses.
This bipartisan consensus should have been the basis for meaningful, responsible reforms. Instead, the administration took the old “my-way-or-the-highway” approach, in spite of the costs and consequences. That is why we are here today. Congress should not accept a flawed, partisan rule when there is a responsible, bipartisan alternative. More importantly, Congress should not stand by and allow a federal regulation to create this much havoc in the lives of the American people.
Since the department began its rulemaking in 2011, this committee has kept an open mind in the hopes that the department would get this right. Ultimately, our response to the final rule is based on a simple question: Will it make it easier or harder for working families to save for retirement? Because the final rule is too expansive, too complex, and too restrictive, there is little doubt that it will be a significant obstacle to the retirement security every family deserves.
I urge my colleagues to support this resolution so we can block a harmful rule, keep working toward a responsible, bipartisan alternative, and protect hardworking men and women saving for retirement.
For years, we pointed to the serious consequences of the department’s fiduciary proposal. We warned the rule would make it harder for low- and middle-income families to save for retirement. We explained how it would restrict the ability of individuals to receive some of the most basic financial advice. We cautioned that it would create new hurdles for small businesses wanting to offer their workers retirement options. And we made a commitment—to families, small business owners, and all Americans trying to plan and save for the future—that we would not sit idly by while the administration advanced such a flawed proposal.
In fact, at the very first congressional hearing on the department’s proposed fiduciary rule in 2011, I said that we should never lose sight of the real world impact proposed changes could have on the investments and long-term retirement security of workers and retirees. I also said that we need to challenge any proposal that could make it harder for working families to plan and save for retirement. And that’s exactly what we have done.
Through letters, hearings, and other oversight efforts, we encouraged the department to withdraw its misguided proposal and go back to the drawing board. Eventually, they did—only to release a similarly flawed proposal last year. Since then, we have continued our efforts to draw attention to the consequences of the latest fiduciary proposal and encourage the department to pursue a balanced approach. We even advanced a responsible legislative alternative, which I was proud to introduce. Our bipartisan solution, unlike the department’s proposal, would both require financial advisors to act in the best interests of their clients and ensure low- and middle-income individuals have access to quality, affordable retirement advice.
Unfortunately, this time around, the department chose to ignore many of the serious, bipartisan concerns related to their proposed rule. Instead, they finalized a rule last month that will create consequences working families and job creators cannot afford.
That rule is the reason we’re here today—to make good on a promise we made years ago to do everything we can to ensure all Americans can retire with the financial security and peace of mind they deserve. Reasoning with the department simply hasn’t worked, so it’s time to utilize another tool in the box: the Congressional Review Act. This law allows Congress to pass a resolution of disapproval to prevent, with the full force of the law, a federal agency from implementing a rule or issuing a substantially similar rule without congressional authorization. The resolution we are considering today is the next step in fulfilling our commitment to deliver the kind of retirement security this country needs.
1. Hearing Notice
2. Witness List
Committee Hears Harrowing Story about Small Biz Cybersecurity
Expert: Could Be Used as Conduit to Attack Gov’t Systems
WASHINGTON – Today, a small business owner from Maine shared his harrowing personal experience as the victim of a cyberattack with members of the House Committee on Small Business. At the hearing, expert witnesses also told lawmakers that increased, sophisticated cyberattacks pose a threat to both small businesses and the federal government.
“The owners, employees and customers of America’s 28 million small businesses need to have confidence that their data is secure,” said House Small Business Committee Chairman Steve Chabot (R-OH). “I think it is fair to say that confidence has been shaken in recent years with the cyber-attacks on the IRS, the State Department, OPM, and even the White House. Between foreign hackers from countries like China and Russia and domestic identity thieves, the federal government has a target on its back that seems to get larger by the day.”
“With all of the uncertainty facing small businesses in today’s world of e-commerce, it will take vigilance by all federal agencies and the watchful eye of this Committee to ensure the data of small businesses and individual Americans remains secure.” Chabot added
ONE SMALL BUSINESS OWNER’S STORY
“When I started my business I had the naïve expectation that I would be able to follow my passion and race go-karts with the help of my wife and a few close friends,” testified Rick Snow, a small business owner from Scarborough, Maine. “Phishing can happen to anyone, phishing attacks are meant to scare you and make you act without thinking, given the right circumstances, anyone can be lured by them. I am certainly no exception.”
“I logged into our bank accounts, and to my utter horror, I found that my balance was zero,” explained Snow. “This was a pay day, and I was terrified that the paychecks that were issued that day would not clear. We were supporting a number of families, many of which live paycheck-to-paycheck and could not have made it without the paycheck we issued them that day. I was also very worried about our business’ reputation since a restaurant nearby had just bounced their paychecks and the company never recovered from the bad publicity they received from not making their payroll.”
“If the federal government cannot protect its networks and data from cyberattacks with almost unlimited resources at its disposal, how can we expect America’s small businesses to do so?” asked Snow.
EXPERTS WEIGH IN
“The impact of small businesses on the government should be considered in at least two key ways,” testified Kevin Dunn, the Technical Vice President for NCC Group Security Services, Inc. “The first concerns the direct and indirect connectivity between a small business and a Government Network. The second concerns small businesses in the government supply chain.”
“If the small business is compromised by a targeted attacker, it could be used as a conduit for gaining access to government systems,” concluded Dunn.
Mr. Dunn said he has spent the last fifteen years carrying out cybersecurity attacks against private companies and government organizations looking for vulnerabilities in their systems. His testimony before the Committee today was informed by those experiences.
Supreme Court Will Address Two Key Patent “Inter Partes” Review Standards in “Cuozzo Speed Technologies” Case
Ms. Judy Miller
Director of Retirement Policy
American Retirement Association
Ms. Paula A. Calimafde
Small Business Council of America
* Testifying on behalf of the Small Business Council of America and the Small Business Legislative Council
1. Hearing Notice
2. Witness List
We also agree that federal policies play a role in meeting that shared goal. This hearing is timely, because next week marks 45 years that the Occupational Safety and Health Administration has helped keep America’s workers safe. As part of this committee’s oversight efforts, we were pleased to have Assistant Secretary Michaels join us last October to discuss what more can be done to promote safe and healthy working conditions.
The question before the committee then and today is whether the workplace rules and regulations coming out of Washington serve the best interests of employees and their employers. Are they practical, responsible, and fair? Are they created with transparency and enforced effectively?
These are important questions, because the strongest health and safety rules will do little to protect America’s workers if the rules are not followed and enforced—or if they’re too confusing and complex to even implement in the first place. I hope we can have a thoughtful discussion today that addresses these points, particularly as they relate to OSHA’s new silica standard.
In March, OSHA issued a final rule that significantly reduces the permissible exposure limit to crystalline silica. Silica is the second most common element found in the Earth’s crust, and a key component of manufactured products and construction materials. But exposure to high concentrations of silica dust can lead to a dangerous, debilitating—and even life-threatening—disease. We have witnessed important progress in recent years, but we know there’s more that can be done to keep workers out of harm’s way.
That is why this committee has pressed OSHA to use the tools at its disposal to enforce existing standards. Unfortunately, the agency has failed to do so.
OSHA itself admits that 30 percent of tested jobsites have not complied with the existing exposure limit for silica. This is an alarmingly high figure. But instead of enforcing the rules already on the books, the department spent significant time and resources crafting an entirely new regulatory regime.
The department’s first priority should have been enforcing existing standards. If OSHA is unable—or unwilling—to enforce the current limit for silica exposure, why should we expect the results under these new standards to be any different?
Related to enforcement, some have raised concerns about whether the new standards can be responsibly enforced. It has been suggested that silica cannot be accurately measured at the reduced limit prescribed in the new rule, because many labs don’t have the technology necessary to provide reliable results. Will employers—acting in good faith and trying to do the right thing—be held accountable for an enforcement regime that isn’t feasible or practical?
These are important questions about enforcement, but there are also serious questions concerning implementation. Can these new rules be effectively implemented on the ground and under the timeframe prescribed by OSHA? Employers may lack the time and resources necessary to adjust their workplaces to the requirements of the new rule. Others may find new controls simply unworkable.
This is especially true for small businesses. According to the National Federation of Independent Business, this rule will cost workplaces more than $7 billion each year. These costs will be borne by consumers and taxpayers in the form of higher prices for homes, bridges, and roads. And these costs will be borne by workers in the form of fewer jobs. These are significant consequences for a rule that may do little to enhance worker health and safety.
We are fortunate to have a second-generation home builder and owner of a small family business with us who can speak more to this today. They will also speak to the fear of unintended safety consequences stemming from these new rules. In trying to address significant health and safety concerns, we must ensure federal policies do not in any way create new hazards in America’s workplaces.
Hundreds of thousands of workplaces nationwide will be impacted by these new rules. We owe it to our nation’s job creators to provide the clarity and certainty they need to expand, hire, and succeed. And, just as importantly, we owe it to workers and their families to promote smart, responsible regulatory policies that are implemented and enforced in a way that serves their best interests. The workers with us today—and those working on countless jobsites across the country—deserve more than our good intentions, they deserve good policies that lead to good results.
I know that we can work together to protect the health and well-being of the hardworking men and women of this country. I look forward to today’s discussion, and will now yield to Ranking Member Wilson for her opening remarks.
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