NLRB sides with Big Labor over main-street
By: U.S. Rep. Billy Long
In late August, the National Labor Relations Board (NLRB) announced what is likely to become the most economically damaging ruling in recent history. Their decision in the Browning-Ferris Industries of California, Inc. case intends to open the door for labor unions to increase in size by vastly expanding joint employer standards. Now, centralized companies will now have control over ground-level business decisions currently made by independent franchise owners despite their previous contract guidelines.
This ruling directly threatens our country’s independent entrepreneurial spirit with costly liabilities and broad moving-target regulations that are bad for franchisees and franchisors. Parent companies are now legally responsible for mistakes of franchise owners. To meet this demand, they’ll be forced to increase corporate locations to limit these liabilities, and will undoubtedly amend pre-existing licensing agreements with higher fees to meet rising cost demands.
Our country is home to nearly 800,000 independent franchises that make up a part of almost every major industry. Many of their owners have spent their entire lives establishing and building these businesses. These entrepreneurs may be forced to give up operational control, and be transitioned into managerial roles. Hiring decisions, employee standards, product flow choices, and other day-to-day responsibilities could all be shifted to corporate oversight. Some franchise owners will even be forced to close their doors, leaving their employees jobless.
But it doesn’t stop there; even intermediary temporary staffing agencies will feel heavy burdens stemming from the ruling’s resulting ability of temporary workers to unionize. Liability and bargaining responsibilities for these workers are now shared by these agencies and the employers it placed them with, despite their lack of control over what may happen under an employer’s watch. The NLRB has essentially forced them into a costly complete restructuring of their business models.
I support fair workplace rules that protect both employees and employers and promote employer flexibility and economic growth, but this ruling completely loses sight of the realities employers face. In uncertain economic times, I believe we need to do what we can to create an environment that fosters job creation and that will not happen by placing more costs and burdens on business. While no one doubts that labor violations should be punished, we cannot afford to inflict this kind of regulatory burden on our business sector.
The franchise model is a crucial staple of America’s free-enterprise spirit. The American Dream means the chance for those who have nothing to provide a better future for them and their families. This decision threatens to stain that reputation, and I will work tirelessly on behalf of families and entrepreneurs to pressure the NLRB to change this rule.
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