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Mr. ENZI. Madam President, I have come to the floor to speak in favor of Senator Rubio's amendment No. 2166, the Rewarding Achievement and Incentivizing Successful Employees Act, known as the RAISE Act. It is a catchy title, and sometimes here in Congress catchy bill titles can be very misleading. Sometimes the bill title means the exact opposite of what the bill would do, such as the Employee Free Choice Act, which actually would have taken away the right to make a free choice through a secret ballot. But in this case, I congratulate my colleague Senator Rubio for a title that conveys precisely what the amendment aims to do.
The RAISE Act would allow employers to give employees raises, bonuses, incentive payments, and other monetary rewards whenever they are earned, whether the union boss approves or not. As all of us know, we are in extremely difficult economic times. Unemployment has been above 8 percent for over 40 months, now and a striking number of individuals are dropping out of the workforce altogether. When we do recover, as I know we will, we are likely to face a skills gap that will further hamper hiring and growth. One of the keys to our economic recovery is the health of small businesses.
For small businesses to reach their full potential, and grow into job-creating machines, they need the flexibility to maintain and attract the key employees who will get them there. Any small businessperson will tell you that their employees are their most important asset. They literally make the difference in whether the business succeeds or fails.
Once your company is unionized, you learn one way or another that it is now an ``unfair labor practice'' under section 8(a)(5) of the National Labor Relations Act to give an employee a raise or a bonus or an incentive or even a gift card for a job well done without the approval of the union boss. All compensation issues must be negotiated with the union, which allows the union to take credit for securing the raise. We have come across scores of cases where employers wanted to thank employees for good customer service, impressive sales growth, or attract employees to fill a critical manpower shortage, and the National Labor Relations Board, NLRB, penalized the employer for it. In a time of global competition, the last thing we need is a Federal agency punishing companies for trying to perform better by rewarding employees.
Believe it or not, there is opposition to this amendment. At least four of our largest labor unions AFL-CIO, AFSCME, SEIU, and the International Brotherhood of Teamsters--have opposed allowing employers to give raises.
Critics of this bill have said that if employers want to be able to reward employees beyond the union-approved wage floor, they can negotiate that provision into their contract. This is true. An employer can make the ability to incentivize employees one of their ``asks'' in negotiations, and they probably have to give up something else in order for the union to agree to that. But it is also true that getting such a provision in the bargaining agreement is not enough to protect employers from a charge of unfair labor practice from the union and penalty from the NLRB. In my research on this issue, I came across several cases where employers had negotiated a raise clause, but since the collective bargaining agreement expired and was in renegotiation, the NLRB ruled that the provision did not apply.
Let me cite an example from just a few years ago. A Montana water and mineral drilling company had negotiated a contract clause with their union to ensure that union-negotiated wages were only a floor and superior wages could be given with or without the consent of the union. When the company's orders increased, the company wanted to share the profits and decided to give employees unilateral raises, increase the per diem for meals, and raise the clothing and safety allowance reimbursement by 167 percent. But the union objected, and the NLRB agreed and stopped the raises. Why? Because although the company had negotiated the right to give raises, they were currently in the process of renegotiating their collective bargaining agreement and there had been no explicit extension of the clause allowing for superior wages and benefits. O'Keefe Drilling, Case 19-CA-29222(2005)
Unfortunately, this is not an isolated case. NLRB has repeatedly punished employers in similar situations.
An Oregon newspaper publisher had historically offered commission for sales of certain long-term advertisements. As it was adapting to having an online edition, it decided to qualify internet ad sales for commissions, as well, and added signing bonuses for new advertising clients. Although the newspaper had specifically negotiated for a contract provision allowing it to pay wages in excess of the established wage, the bargaining agreement was in renegotiation. The NLRB sided with the union. Register-Guard, 339 NLRB 353 (2003)
The fact that raise provisions are negotiated into union contracts negates another criticism I have heard about this proposal. Some say that it would allow an employer to favor employees based on gender or race. This is entirely false--all race, sex, national origin and religion Federal discrimination statutes are and would remain in full effect.
I would like to share a few more examples of why this legislation will not just benefit American workers but everyone who relies on the services they provide. For example, there is a great deal of concern about the quality and availability of health care services in this country. You would think that any Federal agency would congratulate hospitals that strive to improve the service they provide. Unfortunately, that was not the case in these two examples.
During the nationwide nursing shortage we experienced in the last decade, a nonprofit New Mexico hospital was desperate for nurses. It was concerned about the ability to provide care and comply with mandatory staffing levels, so the hospital decided to offer $8000 signing bonuses and $2000 relocation bonuses. These generous bonuses were available for new applicants as well as current nurses--union members--who transferred to fill critical needs. But the union objected and the hospital was ordered to stop offering bonuses. St. Vincent Hospital, Case 28-CA-19039(2004)
In another case, a Brooklyn hospital was concerned about poor reviews of their nursing staff from patient satisfaction surveys, which had been an ongoing problem. The hospital decided to reward its best nurses, so it honored high-performing nurses with a breakfast, a pin, and gave them $100 gift cards since it was the winter holiday season. Unfortunately, the union objected to this honoring of exceptional nurses and filed charges with the National Labor Relations Board. Although these nurses earned $67,000 to $150,000 a year, the NLRB found that the gift card was not a one-time, de minimis gift but, rather, should be considered compensation and should have been a subject of negotiation with the union. The hospital was banned from giving such bonuses again. Brooklyn Hospital Center, Case No. 29-CA-29323(2009)
Clearly something has gone very wrong here, and I want to thank Senator Rubio for offering us the ability to make it right. The ability to reward and incentivize employees is critical to the success of any enterprise. Instead of fixating on who gets credit for anything beneficial, our national labor-management policy should be to strengthen unionized and nonunionized businesses and encourage job creation. This will be good for all Americans, no matter what their union membership status.
I urge the Senate to support the Rubio amendment and adopt this commonsense change to allow American companies and their employees to thrive.
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