Last week, the House Committee on Education and the Workforce’s Subcommittee on Health, Employment, Labor and Pensions held two field hearings to gather testimony from stakeholders on the NLRB’s proposed expansion of the definition of “joint employer”. The meetings were held on Tuesday and Thursday in Mobile, Ala. and Savannah, Ga. respectively. In the Mobile hearing, the Subcommittee heard concerns from franchisees such as local CertaPro Painters franchisee, FAN and former U.S. Air Force Colonel Steve Carey. Col. Carey said, “I believe that if a broader joint employer standard, such as the one NLRB is contemplating, had been in place seven years ago there is a good chance that CertaPro would not have franchised my businesses, instead they would have chosen to open a corporate location.”
On Thursday in Savannah, the sentiments from local franchise small-business owners echoed that of Col. Carey. Fred Weir, an owner of a Zaxby’s franchise and FAN, noted the economic opportunities inherent in the franchise system, saying “Franchising provides a pathway to prosperity for entrepreneurs, employees and communities in every corner of our country.” Weir also noted that “If franchisors and franchisees are defined as joint employers by the NLRB, I might lose control of my business.”
Both of these field hearings demonstrated that the NLRB’s decision in Browning-Ferris Industries will harm existing franchise owners and reduce opportunities for people trying to open franchises. The massive expansion of the definition of a “joint employer” will likely have reverberating effects on the economy overall from increased unionization of franchise systems.