Industry leaders criticized a proposed labor rule Thursday, saying it would lead to a proliferation of small unions and complicate relations with bank employees.

At a hearing of the House Small Business subcommittee on regulation and paperwork, Republican members also expressed opposition to the National Labor Relations Board proposal.

Rep. James B. Longley Jr., R-Maine, argued that the plan would cost jobs by adding to the regulatory burden on small businesses.

The labor board wants to grant "single-unit" bargaining powers to any group of 15 or more employees that works one mile away from other employees in the company, has its own boss, and rarely transfers employees. That could be interpreted as meaning that bank employees at branches more than a mile apart are free to organize separate unions.

The American Bankers Association has not filed an official comment on the two-year-old proposal, which is open for comment through March 15.

But James D. McLaughlin, the ABA's director of regulatory and trust affairs, indicated the rule change could add hundreds or thousands of bank unions. There are more than 62,000 bank branches nationwide.

"Uniformity is necessary in banks because of lending rules and other issues," Mr. McLaughlin said. "To have the possibility of one union in one branch, and a different union in another, would create chaotic circumstances."

William B. Gould 4th, chairman of the labor board, testified that the proposed change would not make it easier to form multiple unions, but would merely clarify criteria the board already uses. Courts have ruled in both directions on the issue, he noted.

"This is not a new law, we're just being precise so that the average person can know what their rights are," Mr. Gould said. "The present situation is sadly lacking in that regard."

Mr. Gould said a specific rule would make the whole process more efficient by "eliminating the need for litigation."

But the subcommittee's chairman, Missouri Republican James M. Talent, said: "There is no empirical evidence that this is a particularly inefficient or inconvenient part of the NLRB caseload."

Currently, 70% of the requests for "single-unit" bargaining groups are granted, Mr. Gould said.

Mr. Duchemin writes for Medill News Service.

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