While introducing a bill Wednesday, Senate and House Republicans made clear the best hope to stop President Barack Obama’s labor board is bipartisan support.
Under the president, the National Labor Relations Board (NLRB) has pursued aggressive policy changes. Changes that critics argue are harmful to businesses. Hoping to counter a policy change which impacts contracting and franchising, Republicans have introduced the Protecting Local Business Opportunity Act. With the president already showing a willingness to protect the policy changes with vetoes, Republicans are urging their Democratic colleagues to help.
“It’s about getting support in the House, Democratic cosponsors,” House Workforce Chairman John Kline said before a group a franchise owners. “The message that these people up here have, about the damage to the American dream and the middle class that Sen. Alexander talked about, I think is going to be a pretty compelling message.”
“We need bipartisan support,” Senate Labor Chairman Lamar Alexander also said. “We need the Democrats who understand small businesses.”
The main issue impacting franchises and contracting is a redefining of what is known as the joint-employer standard. The standard helps define employee and employer relationships when multiple businesses contract with one another.
“We’re going to do our best to pass the law but we need 60 votes to pass it in the Senate and we’ll need 67 to override President Obama,” Alexander continued. “If we don’t have a law, we’ll have an issue and we’ll have an election this next year.”
At the moment Republicans are still trying to build support among Democrats. Kline and Alexander are hopeful, noting some Democrats have already shown interest.
The joint-employer standard has been around for decades. It establishes which company has responsibility over employees when multiple companies contract with one another. Many business models, like franchising, rely on contracting.
Franchising is a unique form of contracting. It allows a small business to contract with a large corporation, like McDonald’s, so that it can to use its brand name and sell its products. Though the small company has to accept its own risk, it gets to run its business the way it wants. This while having the backing of a well-known brand and products.
The problem is when a corporate brand name gets declared a joint-employer with a small business, it must accept responsibility for the actions of that operation. Business groups argue this will likely result in corporations being less likely to participate in the franchise model or asserting more control over the small businesses they contract with.
The NLRB has defended the changes. It argued in the McDonald’s case that franchisors often times have too much control over the independent franchisees they contract with for them to be consider their own operations.
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