The NLRB’s Latest Blow to Working Families and Small Businesses

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WASHINGTON, D.C., August 28, 2015 | comments
They’ve done it again. The National Labor Relations Board (NLRB) has handed down another misguided decision that will have costly consequences for working families and small businesses. This time, the activist board has redefined what it means to be an employer, blurring the lines of responsibility for decisions affecting the day-to-day operations of hundreds of thousands of businesses across the country. As House Education and the Workforce Committee Chairman John Kline (R-MN) and Health, Employment, Labor, and Pensions Chairman Phil Roe (R-TN) said soon after the decision was released:

The board has set a dangerous precedent that will lead to higher costs for consumers and fewer jobs for workers. This radical scheme will also threaten the livelihoods of men and women who achieved the dream of owning a small business and will make it even harder for others to pursue the same opportunity.

Small business owners have been warning for months that such a partisan ploy would destroy established business relationships, limit opportunities for entrepreneurs, and harm both workers and job creators. Here is how a number of employers described in their own words what’s at stake:

  • Colonel Steve Carey, owner and operator of CertaPro Painters of Mobile and Baldwin Counties in Alabama: Small businesses like mine play a valuable role in our local economy … However, if large businesses were liable for the employment decisions of their service providers, franchisees, or other contractors, then the opportunity for small businesses are surely going to disappear … The success or failure of my business is, essentially, all on me – and that’s exactly what I signed up for. It would be a real shame to take these opportunities away from other veterans looking to start their “second life” …
  • Chris Holmes, owner and operator of a Firehouse Subs restaurant in Tallahassee, Florida: I took the risk to start and run a small business, and that is what has sustained our family these many years … But I now find myself in the position that an unelected board in Washington, D.C., can just unilaterally determine that my American dream is over … While it is quite clear that the NLRB wants to negatively impact the business model of some of America’s largest companies through this action, it is ironic that what they will actually be doing is hurting America’s smallest businesses.
  • Kal Patel, owner of Marriott, Hilton, Hyatt and Wyndham, and Choice branded hotels throughout southeast Georgia: The franchise business model has been essential in creating entrepreneurship opportunities for hoteliers, thousands of whom are first and second generation Americans … A new, essentially coerced partnership arrangement between franchisees and franchisors that would arise based on a new joint employer standard would devastate the industryAnd it is most likely that my employees and staffs may suffer … 
  • Jagruti Panwala, owner and operator of franchise hotels in Pennsylvania: I am an entrepreneur and a small business owner and because of my ambition, work ethic, and determination, I have been able to succeed … 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
  • Alex Salgueiro, owner of Burger King restaurants in and around Savannah, Georgia: My experiences with the Burger King brand helped me recognize the opportunities available for lower and middle class Americans; through franchising, people can live the American Dream of owning a business, creating jobs, and giving back to the community … The new joint employer proposal will likely lead to store closures, job losses, and reduced economic activity and community supportit will destroy the ability for many middle class minority individuals like myself to be able to use franchising to attain the American Dream.
  • Clint Ehlers, owner and operator of FASTSIGNS locations in Lancaster and Willow Grove, Pennsylvania: The real impact of a new standard that considers my franchisor the joint employer of my workers is that I will have less independence and less control over the business that I worked so hard to build … A revised joint employer standard will result in fewer new franchised businesses at a time when our economy is thirsty for growth and expansion.
  • Fred Weir, owner of Zaxby’s restaurants in Cherokee County, Georgia: I know beyond the shadow of a doubt our business has solely been successful because of the amazing people who work for us and the decisions I have been able to make about our business culture … A new joint employer standard would fundamentally alter the way I operate and inhibit my ability to expand … That does not benefit the hardworking people we now have on our team and prevents many others from joining our family and growing with us, creating even more jobs.

These small business owners personally know that redefining what it means to be an employer will have devastating effects. Yet, once again, the NLRB has decided to listen to its union allies, rather than the men and women who work hard every day creating jobs, making payroll, and running a small business. That is why, as Reps. Kline and Roe noted yesterday:

Congress should not stand idly by while the board disrupts countless lives and small businesses across the country. That is why we will work to roll back this flawed decision and the damaging effects it will impose on families and small business owners.


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