The House of Representatives have passed a bill to undo one of the Obama Administration’s most harmful job-killing measures.
On Tuesday, the House voted 242-181 to pass the Save Local Business Act, which would bar franchisers from being held liable for any labor violations that happen to be committed by rogue or non-compliant franchisees or subcontractors. If passed by the Senate it would set a strict standard for determining joint employment by requiring regulators or plaintiffs’ lawyers to prove that a parent company is “directly, actually, and immediately, and not in a limited and routine manner, exercises significant control” over labor practices.
The act represents the latest congressional effort to reverse the job-destroying frenzy which was the 8-year reign of the Obama Administration. In 2016, the National Labor Relations Board (NLRB), the top federal labor arbiter for unions and labor disputes, flippantly overturned many decades of precedent, in order to further stifle wage growth and job opportunity across America. After all, a Democrat’s dream is that everyone become an utterly helpless ward of the state, a welfare case.
Rep. Virginia Foxx, Chairwoman of the House Committee on Education and Workforce, said that the standards set by the NLRB created a murky working environment that had threatened the nation’s 733,000 franchise businesses, and the countless Americans they employ. She also said that the act “represents a significant step in a broader effort to restore fairness, balance, and clarity to the federal policies governing America’s workplaces” by drawing a very bright line between umbrella companies and their own local partners. Critics said the threat of holding the parent companies liable for the actions of franchisees could drive up the costs and lead them to withhold partnerships with the smaller businesses and young entrepreneurs who do not have any resources for the insurance and lengthy legal costs.
“The basic question over what it means to be an employer can’t be left up to unelected bureaucrats and trial lawyers to determine,” Foxx said. “Congress has a responsibility to clarify misguided policies that are creating uncertainty for local businesses and their employees.”
Bill sponsor Rep. Bradley Byrne said, “The unworkable joint-employer standard results in confusion and uncertainty that only benefits trial lawyers and Big Labor while making things harder for job creators and small businesses. Through today’s bipartisan vote, we are one step closer to clearing up the uncertainty and protecting important American jobs.”
Robert Cresanti, president and CEO of the International Franchise Association, said, “The NLRB-created joint employer definition is far too broad and poses an existential threat to the franchise and small business community. The Save Local Business Act is the most important legislation for franchising in a generation, a commonsense bill with bipartisan support that protects business relationships and promotes economic growth.”
