October 19th, 2015
Letter: Sens. Hoeven, Heitkamp listening to North Dakota’s small businesses
I recently traveled to Washington, D.C., to share my small-business story. I wanted to explain why it’s so vital to the viability of millions of small businesses and the 780,000 franchise businesses in America for Congress to reinstate the very successful “joint employer” standard in federal law, which was recently changed by the National Labor Relations Board. The decision made by the NLRB dramatically affects my business here in North Dakota. I wanted to tell lawmakers why.
I am a franchisor. By working hard and spending time and energy, I founded a successful brand that has grown into a franchise. Some people hear the term “franchise” or “franchisor” and think only of major fast-food corporations like McDonald’s or Dairy Queen. But they can also think of me and my local North Dakota business. Nine years ago, I opened my first retail store, Mama Mia, a high-end maternity clothing store in Fargo. Shortly thereafter, I developed the concept for MODE and my family and I opened our first location right next door to Mama Mia. In 2008, I merged the two stores into the first MODE location. We now have 10 employees, and our franchisees have 40 employees at their 12 store locations across the Midwest and in South Carolina. While we are hardly a big corporation, we hope to continue growing. Our goal is to have 75 stores by 2024.
What’s at stake here is whether my business, or any of North Dakota’s 1,878 locally owned franchise businesses, will be taken away from us by Washington bureaucrats. In August, the NLRB decided to make employers liable for workers they don’t even employ. Moving forward, that means any small business that the NLRB decides has “indirect control” of employees at another business – may be named a “joint employer” of those employees. I could be held liable for the employees who work for our franchisees in different states, even though each of my franchisees is a separate employer who runs their own business. Even worse, the NLRB says if one business only has the “potential” to influence employees at another business through a contract or any other reason, the primary business may be held liable. In other words, under the NLRB’s new decision, a small business need not actually do anything wrong to be found guilty; it need only to possess the potential to do something wrong.
What if you were ticketed for speeding while your car was sitting in the garage, simply because you had the “potential” to speed? This is an absurd legal change by out-of-touch Washington regulators.
The uncertainty introduced by the NLRB’s decision to alter the joint employer standard jeopardizes these goals. As a small-business owner who competes against massive corporations every day, I find it terribly frustrating that these bureaucrats are harming my business and so many others as well.
We need some common sense. Small-business owners across North Dakota are deeply grateful to Sen. John Hoeven for being an original co-sponsor of legislation to protect locally owned businesses and stop the NLRB’s overreach. He truly has North Dakota’s interests in mind.
I also appreciate that Sen. Heidi Heitkamp has met with me and other North Dakota small-business owners and listened closely to our perspectives. We are hopeful that Heitkamp will also choose to publicly support the legislation, called the “Protecting Local Business Opportunity Act.” Her ultimate support will be long remembered by North Dakota small businesses and entrepreneurs.
The fact is that franchising is perhaps the most successful business model in American history. It has allowed me to take my concept and vision and give other business owners the chance to realize their own goals by using the principles I started. Franchises are small businesses. Franchising jobs cannot be outsourced. Franchising means economic opportunity for people from any background. Franchise small businesses are precisely the kind of American businesses that all elected leaders can support. We need our elected leaders help because our business model, our livelihood, and certainly the future growth of our business is in question.
So we greatly thank Hoeven for his support of North Dakota small businesses. My request to Heitkamp is simple: Please support the Protecting Local Business Opportunity Act to reverse the NLRB’s harmful decision and let franchisors and franchisees keep creating good jobs and a healthy economy in North Dakota.
Stockeland is founder and COO of Mama Mia Inc./Mode.