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Rubio Backs Legislation Rolling Back Job-Killing, Anti-Franchise Regulation

Sep 10, 2015 | Press Releases

Washington, D.C. U.S. Senator Marco Rubio (R-FL) is backing legislation to roll back the National Labor Relations Board (NLRB)’s recent “joint employer” decision, which could hurt up to 780,000 franchise businesses in addition to millions of contractors. Rubio is an original co-sponsor of the Protecting Local Business Opportunity Act, which would invalidate the recent NLRB ruling and reaffirm an employer must have “actual, direct and immediate” control over an employee to be considered a joint employer – the same standard that was in place decades before the board’s extreme decision.
“Franchise businesses have done well in America because they are based on the principle that people across our nation should have greater freedoms to become small business owners, take established brands into local communities, and be held accountable by their customers for delivering a good product or service,” said Rubio. “America has been special in part because this part of our economy has made it possible for cashiers to work their way up to be managers or corporate executives, for managers to become franchise owners themselves, and for single parents to work night shifts so they can finish school and give their kids more opportunities.
“Franchise businesses have provided millions of Americans opportunities to work and develop their careers, and for no good reason, Washington is now rigging the rules against franchise businesses that have been stars of our free enterprise economy for decades,” added Rubio. “By suddenly deciding that franchise owners don’t really own their businesses, the power-hungry National Labor Relations Board is setting the stage for fewer franchises to open, fewer job opportunities for people trying to make it, and for costs and litigation to increase for existing franchises.”
For approximately 40 years, federal labor policies held that two separate employers are “joint employers” if both employers have direct and immediate control over employment terms and working conditions, such as being responsible for tasks like hiring and firing, setting work hours, issuing direction to employees, determining compensation and handling day to day record keeping. Under a new standard adopted last month by the National Labor Relations Board (NLRB) in a case involving Browning Ferris Industries (BFI), a 3-2 partisan majority said that merely “indirect control” or even “unexercised potential” to control working conditions will now make two separate employers joint employers. This new standard will be applied retroactively.
The new standard means that in many more cases multiple employers will have to jointly negotiate working conditions with unions and share liability for labor law violations. As a result, larger business will exert greater control over the smaller employer who actually owns and operates the business, such as stores, restaurants and day care centers. Additionally, fewer employers will parcel out business to local subcontractors, suppliers or subsidiaries, for fear that they will now be liable for the subcontractor’s employment decisions. Millions of employees will also lose the ability to negotiate things like pay, hours and leave time with their direct supervisor, because those decisions will now be made between the larger employer and the union.
This legislation has been introduced by Sen. Lamar Alexander (R-TN), chairman of the Senate Committee on Health, Education, Labor, and Pensions; Rep. John Kline (R-MN), chairman of the House Committee on Education and the Workforce; Sen. Johnny Isakson (R-GA), chairman of the Senate HELP subcommittee on Employment and Workplace Safety; and Rep. Phil Roe (R-TN), chairman of the House Subcommittee on Health, Employment, Labor and Pensions.