gence, I would itemize and ask to have inserted in the committee record.

The CHAIRMAN. Very well.

You have some material you wold like to have placed in the record?

Mr. McCULLOCH. Yes, I do, Mr. Chairman.

The CHAIRMAN. Will you identify the material, please?

Mr. McCULLOCH. I have, first, a summary analysis of plan 5, with a brief abstract of the principal objections to the plan, and answers to those objections. The summary is dated the 26th of June. This

I perepared myself.

The CHAIRMAN. This is a summary analysis of plan 5 that you prepared on the 26th of June?

Mr. McCULLOCH. That is correct. I have one slight correction on the copy which I prepared for the record.

The CHAIRMAN. Very well.

There will be inserted in the record at this point a summary analysis of Reorganization Plan No. 5, as prepared by the National Labor Relations Board, dated June 26, 1961.

(The summary analysis referred to follows:)

SUMMARY ANALYSIS OF REORGANIZATION PLAN 5

(Prepared by National Labor Relations Board)

Provisions of plan

Permits delegation of Board's functions and decisional powers to panels or members, hearing officers or employees, subject to section 7(a) of the Administrative Procedure Act; subject also to discretionary review by Board as prescribed by rule, to be granted on vote of one less than majority of Board (i.e., by two members), actions not reviewed to be deemed the actions of the Board. There is no provision to increase Chairman's powers.

Primary purpose

To convert full, de novo review of contested trial examiners' intermediate reports in unfair labor practice cases from an automatic to a discretionary basis to cut delays, reduce backlog and improve quality of Board's work. Justification

General acceptability of trial examiners' work:

That is, 78 percent affirmed in full; 91 percent affirmed in full or in part. Caseload intake increasing from 13,000 annually 4 years ago to over 23,000 in 1962.

Board's production increasing from 1,900 proceedings 4 years ago to over 3,200 in current year.

But backlog has grown to record heights (440 contested complaint cases, over 1 year's production; 676 representation cases, a 3-month supply). Delays: median time from filing unfair labor practice charges to Board decision is 400 days; median time in representation cases 85 days-far too long. Congress did it for election cases

Congress in 1959 Landrum-Griffin amendments authorized Board to delegate representation case decisions to regional directors, subject to discretionary review, which Board has carefully formulated and put in operation as of May 15, 1961.

Bipartisan support

Members of the NLRB-Republicans and Democrats alike unanimously endorse the plan as essential to the Board's functioning. The Cox advisory panel, including management, labor, and public representatives, supported the principle of allowing the Board to delegate complaint case decisions to trial examiners, subject to discretionary review by the Board.

Nature and probable grounds for review

Every petition for review would be acted upon by Board.

If follow review procedures for R cases, would grant full review if: (a) demonstrable error of fact; (b) substantial or novel issue of law or policy; (c) failure to give fair procedure; or (d) other compelling reasons.

If only two members so vote, review would be mandatory.

Every final order, even where full review is denied, can be appealed in the courts.

Effective date

Plan 5 submitted May 24, 1961; in absence of disapproval would become effective July 24, 1961.

Objections to plan 5

(a) Permits delegation of broad power to subordinate employee-GS-9.

(b) Permits delegation of rulemaking to subordinates.

(c) Deprives litigants of review rights.

(d) Give Chairman undue powers.

(e) Allows Board to undo Congress's delegation authorization to Board in 1959 in representation cases.

Answered

(a) Not correct. Reference to Administrative Procedure Act requires delegation of decisional power either to Board member or to officer selected under that act and acting under its procedures. At NLRB, this is trial examiner only.

(b) NLRB has never acted by rulemaking, as some other agencies do. This is too inflexible for complex and diverse situations in industrial relations. NLRB acts on a case-by-case basis. Rulemaking is not one of its functions.

(c) No substantial right is lost under plan. It adopts review procedure like that authorized by Congress in 1959 for representation cases. It limits full, de novo review to meritorious cases, or ones where two board members so vote. But every petition for review of trial examiner's decision will be reviewed in first instance by Board to see if it has merit. Screening out unreasonable demands for review will allow Board to give fuller attention to meritorious

cases.

Court review not affected. All final orders, including those where full review is not allowed, are subject to court review.

(d) Not correct. Plan does not increase Board Chairman's powers. It does not include sec. 2 which was included in other plans for that purpose.

(e) Against background of 1959 law and Board's action under it, this plan allows similar delegation, but to trial examiners, in unfair labor practice cases. It cannot properly be construed to override or disturb the explicit congressional action of 1959, or to allow the Board to do so. An interpretation giving full effect to both actions is the only reasonable interpretation.

Objections to plan 5

(f) Congress should set grounds for review, not leave these to Board to set up, as plan does.

(g) The trial examiners are not Presidential appointees and their decisions should not be given any finality.

(h) Plan is vague and too broad.

Answered

(f) But Congress in 1959 left to the Board the setting of grounds for review in R cases. The Board did this only after consultation with persons from management, labor, and public interests. It plans a similar procedure on unfair labor practice cases. This approach, which is more flexible, has been widely accepted. To insist on doing it by amendments to the TaftHartley law or Administrative Procedure Act is likely to open up many other issues and lead to lengthy debate.

(g) Board's trial examiners are selected under Administrative Procedure Act from special register and ratings prepared by Civil Service Commission; 24 percent of their decisions are now accepted by parties and become final orders of Board automatically; 52 percent more are fully affirmed by Board. By test of experience, their work is entitled to same confidence Congress evidenced in 1959 by allowing Board to delegate R case decisionmaking to regional directors, also not Presidentially appointed. Decisions under both delegations, of course, are subject to Board review.

(h) As applied to basic functions of NLRB this does not hold true. Plan is clear and delegation under it is more restricted than under Congress' action of 1959 in two respects: (1) the specific reference to the Administrative Procedure Act; and (2) the provision allowing only two Board members to compel full, de novo review of trial examiners' decisions.

Mr. McCULLOCH. The second item is an answer to the loss-of-rights argument urged by some against the plan, which I have also prepared. The CHAIRMAN. That may be inserted in the record at this point. (The document referred to follows:)

ANSWER TO THE LOSS-OF-RIGHTS ARGUMENT

One of the principal objections made to plan 5 is that the discretionary review therein provided would deprive parties whose cases are before the agency of important, substantive rights. This right, so the argument runs, is the right to have full review of the trial examiner's decision by the presidentially appointed Board. If the Board's review is discretionary, these same parties may not secure full Board review of their cases.

This is an appealing argument, sincerely urged. It deserves a careful answer. First, it should be recalled, that to the degree that discretionary review is a deprivation of rights, Congress itself after due deliberation in 1959 authorized a similiar procedure for the Labor Board in handling its representation, or election, cases. It empowered the Board to delegate these decisions to its regional directors, who are not appointed by the President. The review requirements were wholly permissive, the language Congress adopted simply reading: "Upon the filing of a request therefor, the Board may review" (sec. 3(b)). This review requirement is obviously less stringent than under plan 5.

The Board, of course, was convinced that Congress intended it to review every meritorious case. So after consultation with practitioners from all groups it established carefully drawn review standards requiring full review where in the Board's judgment substantial errors of law or fact or procedure by the regional directors are shown by the parties.

Surely no one will claim that these election cases, which establish or disestablish the basic bargaining rights and obligations of union groups and employers, are unimportant cases. But they are voluminous. (Board elections in 1960 totaled over 6,600.) Many conform to clearly esatblished principles and precedents. The delay which resulted from the steadily increasing volume of the Board's work was defeating the objectives of the law. Congress therefore authorized Board delegation in a manner which left the parties with no automatic right to a full review by the Board, but with a right to get that full review if they could demonstrate merit in their cases. To the extent that there is a limitation of the right to secure automatic review, it was authorized by Congress to attain a fuller enjoyment by the parties of all the rights the statute aims to protect.

Reorganization Plan 5 would allow the Board to apply to unfair labor practice cases a review procedure similar to that authorized by Congress in 1959.

In this case the delegation of decisionmaking would be to trial examiners, selected in conformity with the Administrative Procedure Act. The Board must, under the plan (the language is "The Board shall") set up review procedures, described as "discretionary." These would be very like the standards set up by the Board for representation cases under the 1959 law.

Let us analyze the review rights of the litigants under such a delegation: (a) By filing a petition and appropriate exceptions to the trial examiner's report, the parties would have an automatic right to a preliminary review by the Board itself to determine if some good reason is shown for a full review in the nature of a new trial on the printed record. Thus, the parties would all have the right to demonstrate to the Board on the record that there were prejudicial errors of fact or law or procedure by the trial examiner.

(b) If the Board felt the parties had shown the probability or possibility of such error or if only two Board members felt the case should be reviewed for the reasons above, or any other reason-the parties would have the right to full, de novo review of all the issues properly raised in the case.

(c) The "right lost," precisely as under the 1959 law, is the right to an automatic, full, de novo review of the entire case by the Board where the parties cannot or do not show any substantial errors of fact or law or procedure. Recall, however, that they have all had the right to demonstrate the merit of their case to the Board in their petition for review and their exceptions. Recall too that in every case the parties retain their rights to appeal to the courts to backstop the Board and guard against any arbirary refusal by the Board.

As Congress seeks to balance the various rights of parties and needs of the Board under the law, is this "right" to a full de novo review by the Board in cases where no meritorious ground for it is shown so important that plan 5 should be defeated?

Or is not this "right," where no showing of error is made, much more likely to be a "right" which, in effect, only delays enforcement in the parties' own case and encumbers the Board so that it must also delay its processing of other, more deserving cases? Thus, the retention of this "right" would deprive others of their just rights to the more expeditious protection of the law.

On balance and considering the various interests at stake, we believe plan 5 would improve the Board's vindication of fundamental rights under the law and would not deprive parties of any reasonable review rights.

The Board's caseload in the sixties is so high that a system of screening off the unreasonable demands for review is the fairer thing to do. And this is the purpose of plan 5.

Mr. McCULLOCH. The third item, Mr. Chairman, is a table of median average days that have elapsed in processing cases.

The purpose of this is to give the committee a picture of the extraordinary delay problem before the Board.

The CHAIRMAN. Very well, that may be inserted in the record at this point.

The CHAIRMAN. Does that show the days lapsed from the time a complaint is filed until it is finally disposed of?

Mr. McCULLOCH. Yes, Mr. Chairman, it does.

The CHAIRMAN. Does it show the lapse of time from the time the hearing examiner submits his intermediate report until the Board takes action?

Mr. McCULLOCH. It shows that breakdown; yes, it does.

The CHAIRMAN. I think that is of interest, nad maybe the other is, too. I remember there was some testimony here that these hearing examiners only handle five or six cases a year-or two or three-is that right?

What is the average caseload of a hearing examiner per year?

Mr. McCULLOCH. The average now, Mr. Chairman, is about 11 intermediate reports a year.

The CHAIRMAN. By each examiner?

Mr. McCULLOCH. Exactly.

The CHAIRMAN. That includes all kinds of cases?

Mr. McCULLOCH. All kinds.

The CHAIRMAN. In other words, giving him a month for vacation, he handles about one case a month, is that what it amounts to?