Broad Business Coalition Seeks Rollback of New Joint Employer Standard

Coalition to Save Local Businesses Executive Director Michael Layman released the below statement on today’s House Education and the Workforce full committee hearing exploring the impact of the NLRB’s expanded joint employer standard.

“We once again heard in today’s hearing that the expanded joint employer standard is denying locally owned businesses the basic clarity and certainty they need in order to create jobs and serve their communities,” stated Layman. “In the aftermath of the NRLB’s decision that redefined what it means to be an employer, local business owners have communicated to their elected representatives in Congress the challenges they face under this vague new regulation. We are grateful to Chairwoman Foxx and members of the Committee for their work on this issue over the last two years and for convening today’s hearing, and to our friends on both sides of the aisle for listening to the concerns of local businesses in their communities.”

In the aftermath of the National Labor Relations Board’s decision in Browning-Ferris Industries of California, Inc (BFI), CSLB members have actively engaged with House and Senate leaders to educate them about the negative impacts of the expanded regulation on employers and employees alike. Members of Congress have met with thousands of small business owners and held numerous hearings on this issue in an effort to gain firsthand knowledge of the impact of the potentially limitless liability standard on locally owned businesses.

During today’s hearing, Jerry Reese, director of franchise development for New Orleans-based franchise, Dat Dog, testified on behalf of the CSLB, describing the impact that the expanded joint employer standard is having on businesses in the midst of growth and their need to train their workforce:

“Employee training is a great example of the confusion that lies within the very real threat of expanded joint employer liability on small businesses. Franchise companies naturally want to pass along their expertise and experience to as many people as possible within their system. But now franchise brands are limited by only being able to train franchise employees if the training is deemed necessary to ensuring brand standards. While no business can afford to have a poorly trained workforce, locally owned businesses are now faced with the question of how to train employees in your system to uphold brand standards with the all-too-real threat of joint employment liability looming over all of us.”

Worker training is merely the latest example of the problems facing small business owners under the expanded joint employer standard. Businesses of all sizes are now exposed to unlimited and unpredictable joint employment liability.

The Coalition to Save Local Businesses is a diverse group of locally-owned, independent small businesses, associations and organizations. Below are additional statements from CSLB partners:

Matt Haller, senior vice president of Public Affairs and Government Relations, International Franchise Association:

“We applaud Chairwoman Foxx and members of the committee for their continued efforts to ease the regulatory burden on small business owners by removing barriers to economic growth. Franchising is a powerhouse of small business economic activity and these small business owners deserve as much clarity and certainty as possible, so they can continue to create jobs and serve their communities.”

Cicely Simpson, executive vice president, National Restaurant Association:

“Joint employment liability is affecting businesses all across the country, including restaurants. Congressional action is vital to resolving the damage caused by the NLRB over the past eight years. We are pleased that Congress is taking this issue seriously, and we look forward to legislation being introduced.”

Brian Crawford, vice president of Government Affairs, American Hotel and Lodging Association:

“The franchise model is a pillar of the hospitality industry, allowing so many to achieve the American Dream and run their own businesses while creating jobs and contributing to their communities. We greatly appreciate the House Education and Workforce Committee, and especially Chairwoman Virginia Foxx, for leading this hearing to addresses the hindrances to job growth, free enterprise, and a stable regulatory environment under the redefined joint employer standard. We encourage the committee to reinstate the long-standing joint employer definition that has proven effective for decades and will provide employers with the clarity and certainty they need to ensure they have control over who they employ and for whom they are liable under the law. We look forward to working with Congress to create a regulatory and legal framework that allows entrepreneurs to thrive and foster growth.”

Chip Rogers, president and CEO, Asian American Hotel Owners Association:

“The redefined joint employer standard is a threat to the very model of franchising. Franchising has enabled thousands of our members to go into business for themselves, create jobs in their communities and find new ways to better serve their guests. The entrepreneurial spirit thrives in franchising. Unfortunately, the negative effects of a new joint employer standard are already starting to take root. We thank Chairwoman Foxx for calling this hearing and all of the committee members for participating. We urge Congress to act on this issue as soon as possible, to protect the franchise businesses and jobs of today and tomorrow.”

Evan Armstrong, vice president of Government Affairs, Retail Industry Leaders Association:

“We thank the House Education and Workforce Committee for listening to the concerns of the employer community. The NLRB’s decision to overturn decades of sound law, erodes the relationship between employers and employees, stifles employee growth and threatens the future of American industry. Retailers need clarity and flexibility in the law to continue to create opportunities for growth and innovation in the retail industry. We look forward to working with Congress to support a clear definition of joint employment that works for retail and our workforce.”

David French, senior vice president for Government Relations, National Retail Federation:

“Today’s hearing will help make clear what thousands of retailers already know: holding one business responsible for the actions of another, independent business creates an environment of toxic uncertainty and only encourages more growth-chilling litigation. NRF urges Congress to take the next step in clarifying the true meaning of a joint employer relationship by passing definitive legislation.”

Mike Bellaman, president and CEO, Associated Builders and Contractors:

“We thank Chairwoman Virginia Foxx and the Committee on Education and the Workforce for calling an important hearing to examine the negative consequences of the National Labor Relation’s Board (NLRB) new joint employer standard,” said Mike Bellaman, president and CEO of Associated Builders and Contractors. “In the construction industry, the contractor-subcontractor model has become an integral tool used to complete small and large-scale projects safely, on time and on budget. Under NLRNB’s new interpretation of a joint employer, general contractors will likely avoid increased costs and liabilities and limit hiring subcontractors, which are often small and locally owned specialty businesses. The negative consequences of NLRB’s overreach will be felt throughout our industry and the entire economy. ABC looks forward to continuing to work with both parties in Congress to help craft a legislative solution that will permanently fix the joint employer problem.”

To learn more about the Coalition to Save Local Businesses and the joint employer issue, click here.