From the August 1999 issue of Entrepreneur

The effort by Republicans to remove a large swath of small businesses from the jurisdiction of the National Labor Relations Board (NLRB) has picked up unspoken support. H.R. 1620 would modify the gross receipts thresholds, established in 1959, which determine whether unionized employees in a small business can bring unfair labor practice complaints to the NLRB. By bumping up the numbers for inflation, fewer small businesses would have to worry about action from the NLRB.

H.R. 1620 would increase the thresholds significantly. The threshold for retail businesses would increase from $500,000 to $2.7 million. For nonretail businesses, it would rise from $50,000 to $275,773. Unionized employees at companies with gross receipts below those thresholds could still file complaints in state courts.

James Truesdale, chair of the NLRB, is taking a neutral position on the bill--a significant change from the view of his predecessor, William Gould IV, who left the NLRB last August. Although he never publicly opposed increasing the thresholds, Gould was thought to be avidly against the threshold-adjustment bill introduced in previous Congresses by Rep. Ernest Istook (R-OK).

The Istook bill passed the House three times in previous sessions as a rider but was either shot down by President Bill Clinton or the Senate Appropriations Committee, which has jurisdiction over the NLRB budget. Although it's a rider again, Truesdale's neutrality may make a difference this year.

The bill's premise is that it's too easy to file harassing and empty charges that cause small businesses to either spend huge sums contesting the charges or settle in an effort to avoid legal bills. In fiscal 1997 (the latest year for which statistics are available), business firms and labor unions filed 33,439 charges of unfair labor practices with the NLRB. More than three-quarters of the charges were filed by employees, and 10 percent of those involved companies that employed fewer than 10 workers. Only 2 percent of the 33,439 cases went to the Board for a decision.

In a letter to House members, Istook provides examples of two companies with eight and four employees, respectively, whose owners spent $11,000 and $7,500 fighting NLRB charges that were eventually dismissed. Had those cases been forced into state court because they were too small to be considered by NLRB, as would be the case under the Istook bill, the entrepreneurs could have collected some court costs.


Stephen Barlas is a business reporter who covers the Washington beat for 15 magazines.