Inforum: Short-sighted NLRB rule could leave franchise owners legally vulnerable


There are roughly 10 million women-owned businesses in the United States, and collectively they’re growing faster than other small firms. It’s fitting that October celebrates this success with Women’s Small Business Month. All told, women-owned companies employ an estimated eight million workers and drive $1.2 trillion in sales every year.

We should be proud of the pace-setting achievements women are racking up in leadership and business, but we also should also take stock of obstacles to that progress. As a business owner and working mother, what I see driving more and more uncertainty is a rise in federal rules that fail to consider how they impact smaller firms. The burden of the regulatory costs and paperwork associated pale in comparison to what happens when the laws themselves are difficult to understand, inefficient and short-sighted.

One example is the National Labor Relations Board’s “joint employer” decision, which I believe will discourage growth and put a damper on the entrepreneurial spirit that’s so essential and unique to our economy.

In the nine years since I opened my first MODE boutique here in Fargo, I have been able to franchise, expanding our brand to 11 new locations in six states. I’m proud to say that not only are all these stores owned by women, but that the MODE brand now employ more than 30 women.

The NLRB joint employer rule threatens that growth by establishing that labor laws pertaining to “employers” could be applied a step further to franchisers like me. This interpretation of a regulation could leave me legally vulnerable for decisions that I do not make and for employees not on my payroll. It’s an interpretation that signals a fundamental misunderstanding of the franchising model itself – a model that I, and others like me, have been able to use to successfully build our brands and create opportunity.

Under the NLRB decision, there is no protection for small franchisers and, even more troubling, there’s no way to know when or how the government might use certain employment rules against us.

As I’ve explained in Washington on several occasions – even when testifying before Congress – the risks that self-employed Americans face are huge. Sudden regulatory changes shouldn’t have the power to transform our business reality overnight. And while I don’t believe policymakers were targeting businesses like mine, they certainly weren’t thinking about how their actions my affect my company.

I’m grateful to finally be at a point where I can support my family and empower other women around the country to do the same. But I don’t want Washington or the NLRB’s decision to change that.

 

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