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"Regulatory Limbo" Under the NLRB

One year ago, bureaucrats at the National Labor Relations Board (NLRB) handed a gift to Big Labor that will upend a business model that's paved the way to the American Dream for countless individuals.

The NLRB’s partisan decision in Browning-Ferris Industries overturned decades of labor policy, and it was issued despite concerns voiced by small business owners across the country.

Clint Ehlers, owner of two local FASTSIGNS stores in Pennsylvania, warned that a revised joint employer standard would “result in fewer new franchised businesses, at a time when our economy is thirsty for growth and expansion.”

Then there is Fred Weir, who started four restaurants in Georgia employing 160 workers. Weir testified last year:

Without any doubt, there will be fewer opportunities for new entrepreneurs who want to try to start their own businesses, and would have used the franchise model to do so, but who find that the joint employer standard has shut down franchising as a pathway to prosperity.

And we could go on. Committee Republicans echoed their concerns, warning such a move would “discourage new small businesses from being created.” Now, a new Wall Street Journal article shows that those very warnings are becoming reality:

Small-business owners say they are shouldering higher costs and scaling back expansion plans because of a revised federal rule … The policy broadens the circumstances in which two businesses can be counted as employers of the same group of workers, reversing the NLRB’s 30-year-old standard for determining such ‘joint-employer’ status … Businesses say they are in a regulatory limbo because the new standard is vague about what constitutes control. 

A home health-care business in Wisconsin is taking on $10,000 in annual recruiting costs because its franchiser stopped providing assistance to steer clear of regulators, and a small hotelier in Florida is abandoning expansion plans in small markets because one of its franchisers scaled back worker training it provides.

A printing business owner in Washington state said he canceled plans to open an eighth store because he doesn’t want to risk the investment until it is clear his franchiser wouldn’t be considered a joint-employer. 

The flawed joint employer standard is clearly making it harder for small business owners to provide for their families and create jobs in their communities. But the NLRB isn’t fazed. As the Journal notes:

Mr. Griffin of the NLRB said the franchising community is overreacting.

Overreacting? Leave it to the agency’s partisan prosecutor to insult entrepreneurs instead of taking a hard look at the real world consequences of the NLRB’s Big Labor agenda. It’s what you’d expect from a government bureaucrat who isn’t concerned with running a business, hiring workers, or making payroll.

Small business owners are the backbone of our nation’s economy. We need to do everything possible to support their success and the success of their workers. 

That’s why House Republicans have put forward a Better Way, a bold agenda that will rein in bureaucratic overreach so more Americans can enjoy a lifetime of opportunity and prosperity.

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