WASHINGTON – Rep. Henry Cuellar (D-Texas) joined Republican lawmakers in support of a bill that would reverse a decision made by the National Labor Relations Board during the Obama administration.
“For more than three decades, the Joint Employer Standard was the cornerstone of labor law; it protected businesses from undue liability involving employees over which they did not have the actual or the direct control. We know what happened in August of 2015 that decision that came out – that decision ignored years of legal precedent and created an environment of uncertainty that will put pressure on primary companies to assert more authority over their contracted small businesses and franchises to limit new potential liability under this federal law,” Cuellar said during a Capitol Hill press conference Thursday.
“I’m an attorney and I’ve been a small-business owner, so I know what it is to be a small-business owner, so I know what it is to work with employees, and I don’t think this is a Democratic or Republican issue – it’s something that we’ve got to do because it’s the right thing to do for the small-business owners,” he added.
In August 2015, the NLRB concluded that “two or more entities are joint employers of a single workforce if (1) they are both employers within the meaning of the common law; and (2) they share or codetermine those matters governing the essential terms and conditions of employment.”
Cuellar, a member of the fiscally conservative Blue Dog Coalition, said the NLRB’s ruling remains “a major threat to the life of the franchise industry and to the dreams of business ownership for millions of Americans.”
“I’ve heard this message loud and clear from my businesses in my district, from San Antonio all the way to my hometown in Laredo to Mission, Texas. Franchise businesses in my state, in Texas, provide over 635,000 jobs contributing over $31 billion to the economy, including nearly 12,000 of those jobs in my district alone that adds about a half a billion dollars to our economy,” he said. “I talked to them, I have spent time with them, I’ve been at the restaurants, I’ve been with them, we’ve sat down and this is real. This is not one of those hypothetical situations, it’s something that’s real and this is why this bipartisan legislation will be important to those small businesses.”
Cuellar suggested that the federal government should adopt the approach of “do no harm” to small businesses.
“Small businesses should at least get something from the federal government and that is do no harm, do no harm to those job creators because, after all, those small businesses create two-thirds of all the jobs that we have,” he said.
Rep. Virginia Foxx (R-N.C.), chairwoman of the House Education and Workforce Committee, called the NLRB’s decision a “very bad ruling” that must be reversed right away.
Rep. Bradley Byrne (R-Ala.) said the NLRB’s decision created confusion for franchise employees.
“Now, look at it from the standpoint of the employee: You thought that the person who signed your paycheck, that you report to every day and tells you what to do, you thought that was your employer and then you find out that in addition to who you thought your employer was, there’s somebody or some company that you’ve had no contact with and now somebody’s saying that also is your employer,” he said. “That’s pretty confusing to the employee, but to the businesses – we have a lot of different types of business up here today. It actually interferes with their ability to start their businesses in some circumstances and to grow their businesses, and these are almost always small businesses where most of the people in America are employed.”
Rep. Tim Walberg (R-Mich.) said the NLRB decision should be overturned because it undermines the independence of small businesses.
“It threatens to upend small business, undermine their independence and put jobs and livelihoods at risk. I heard these concerns, expressed in many ways from many people, from many sectors, from small businesses and franchisees as I traveled my district, as we held hearings in Congress and talked with folks who were impacted in their lives and their experience,” he said.
Rep. Andy Harris (R-Md.) said passing the proposed bill would create some certainty for small businesses in America.
“They don’t need the certainty from one-year appropriations bill to the next, they need the certainty of a permanent change in law that, for all intents and purposes, if we ask any person on the street who an employer is they wouldn’t come up with the NLRB definition. They would come up with the definition in this bill, that’s what Americans expect from their government, that’s what they expect from Congress. So the sooner we get this done the better and, again, restore the small-business economy to large parts of each and every one of our districts,” he said.
Ed Bradley, a Burger King franchisee from Baltimore, predicted that the franchise system “won’t exist” if the legislation is not signed into law.
“Small businesses like mine need that certainty to expand because the larger franchisees, franchisors now see me as a risk. They don’t want me to go any further because they think that because I’m a small franchisee I don’t have the resources to be able to fight off anything, any threats that they have,” said Bradley, who appeared at the press conference on behalf of the National Franchise Association. “So now they’re turning to larger franchise, franchisees, super franchisees within the corporation because they have their human resources and their attorney to fight off any suits. I am an endangered species, but within the franchise system the franchise system won’t exist unless we get this certainty.”