The president’s appointees at the National Labor Relations Board (NLRB) seem determined to undercut the American Dream. With the General Counsel’s unprecedented decision last July that McDonald’s Inc. and its franchisees are joint employers, and a similar case pending before the full board, the Obama NLRB is poised to upend a business model that has benefited countless American entrepreneurs. Take for example Amir Siddiqi, who recounts his journey from immigrant to job creator in a recent Wall Street Journal op-ed:
In 1985 I left my home in Pakistan at age 19 and came to the United States with the help of an uncle. I considered this my best chance to start a life away from the government control and corruption that troubled my country. That proved true. Through hard work, I learned to run restaurants and I now own dozens of stores as a franchisee … My restaurants employ more than 900 people, including teenagers and immigrants working their first jobs. I take great pride that the next person with goals like mine could be working in one of my restaurants today.
But Siddiqi also relays the difficulties created by the NLRB’s new standard:
The National Labor Relations Board is threatening to upend my business model by muddling the distinction between local franchisees like me and the national brands affiliated with them … Because of this, my franchiser might feel the need to protect itself from liability by exerting control over my employment decisions … Forcing franchisers to worry about their franchisees’ employees would destroy the business model I signed up for. It could also destroy a road to the American dream for people who are willing to take some risks for the chance to build a business and a better life.
Other small business owners share Siddiqi’s concerns. At a recent committee hearing, first generation American and hotelier Jagruti Panwala spoke of similar problems:
To be completely honest, if these were the conditions of the franchising model before I became an hotelier, I would have never entered into this business. I am an entrepreneur and a small business owner and because of my ambition, work ethic and determination, I have been able to succeed. I measure that success in my ability to expand my business, create good jobs and the opportunity to reinvest in my community. Expanding joint employer status would collapse the franchising model and extinguish aspirations of business ownership. I also strongly believe that as a result, jobs would be lost, or never created.
The NLRB’s radical rewrite of long-standing labor policies would be a boon for Big Labor at the expense of hardworking entrepreneurs. The Obama administration should abandon this flawed scheme and uphold the standard that has served employers, employees, and consumers for decades.
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