BRAUN Urge NLRB Chairman To Drop Harmful Rules For Franchises In A Bipartisan letter

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Braun, Manchin, King, Lankford, Sinema, And Collins Urge NLRB Chairman To Drop Harmful Rules For Franchises In A Bipartisan letter

December 12, 2022

 WASHINGON— Today, a bipartisan group of Senators led by Senator Mike Braun and Senator Joe Manchin wrote a letter to National Labor Relations Board Chairman Lauren M. McFerran urging the Board to reconsider the joint employer proposed rule which would have negative effects on workers and businesses during a time that many are already struggling following the COVID-19 pandemic.

Joining Senators Braun and Manchin on this bipartisan letter are Senator Angus King, Senator James Lankford, Senator Kyrsten Sinema, and Senator Susan Collins.

“As Members of Congress, we have sought to protect the franchise model through legislation due to the opportunity franchises provide workers and entrepreneurs…We fear that the proposed rule would do the opposite, leading to an increase litigation and therefore putting the franchise model at risk. Businesses should not be liable for entities they do not control,” the Senators wrote.

“Due to our concern with the potential impact that the proposed rule will have on the franchise model, we request that the Board reconsider moving forward with its proposed rule for determining joint-employer status. At a time when small businesses have been struggling to stay afloat, we should at the very least provide clarity so that labor and employment law does not come into unnecessary conflict,” the Senators continued.

Read the full letter here

Background

  • In the United States, there are nearly 775,000 franchises that employ 8.2 million workers and provide $800 billion of economic output. This is projected to grow in 2022 to nearly 800,000 franchises.
  • On September 7, 2022, the National Labor Relations Board (“NLRB” or the “Board”) published its Notice of Proposed Rulemaking (NPRM) entitled: “Standard for Determining Joint-Employer Status” (“proposed rule”), which would replace the 2020 Joint-Employer Rule that focused on “direct and immediate control” and replace it with the “indirect, reserved” control standard.
  • The International Franchise Association (IFA) found that the BFI joint employer standard, nearly identical to the proposed rule, “cost franchise businesses $33.3 billion per year, resulting in 376,000 lost job opportunities, and led to a 93% increase in lawsuits.”

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