IFA Applauds Strong Bipartisan Opposition to NLRB’s Flawed Joint Employer Proposal

WASHINGTON, DC, Dec. 8 – The International Franchise Association (IFA) today applauded a bipartisan group of 70 members of Congress for urging the National Labor Relations Board (NLRB) to drop its proposed joint employer standard, echoing IFA’s concerns that the proposal would damage franchise businesses and their employees and put the franchise business model at risk.

"The strong bipartisan opposition to this rule shows that it is only right for it be withdrawn," said Michael Layman, IFA Senior Vice President of Government Relations and Public Affairs. "IFA thanks these lawmakers for weighing in to protect franchising, the million of jobs it supports, and the entrepreneurs around the country who deserve the same opportunity to pursue the American Dream. We urge the NLRB to withdraw its misguided joint employer rule and heed the warnings of members of both parties."

On behalf of franchise small businesses across the country, we applaud these 70 members of Congress for urging the NLRB to withdraw its harmful joint employer rule, which will eliminate jobs and increase costly litigation in every state and district.”

In a letter sent to NLRB Chairman Lauren M. McFerran, U.S. Sens. Mike Braun (R-IN), Joe Manchin (D-WV), Angus King (I-ME), James Lankford (R-OK), Kyrsten Sinema (D-AZ), and Susan Collins (R-ME), state:

“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. 

In a separate letter, 43 Senators and 24 House members expressed opposition to the rule, stating:

“Franchises in particular would be negatively impacted should the proposed rule go into effect. In the United States, there are approximately 775,000 franchises that employ 8.2 million workers, and outputting $827 billion to the economy…By moving forward with this misguided proposed rule, the Board would overwhelmingly hurt entrepreneurs who are utilizing the franchise model to own their own business.”

In the 118th Congress, IFA will prioritize bicameral, bipartisan legislation to codify a common-sense joint employer standard at the federal level, including through the Coalition to Save Local Businesses (CSLB).

The letter comes alongside IFA’s comments to the NLRB that the rule would “wreak havoc on the franchise business model,” highlighting how the proposed rule resurrects and expands the 2015 Browning-Ferris standard, which IFA estimates cost franchise businesses $33.3 billion per year, resulted in 376,000 lost job opportunities, and led to 93% more lawsuits. Over 3,000 franchisees joined IFA in warning about the “devastating consequences” this rule could have for their businesses, aspiring entrepreneurs, and the entire franchise sector.

“The proposed rule will needlessly upend the franchise business model and close the door to opportunity for hundreds of thousands of Americans, especially women, people of color, veterans, and first-time business owners,” said Layman.

The franchise business model provides hundreds of thousands of local business owners the opportunity to own their own business under a well-known brand name. According to recent Oxford Economics research, nearly one-third of business owners say they would not own a business without franchising, especially true for women, people of color, veterans, and first-time business owners. Franchised businesses provide better wages up to 3.4% higher than their non-franchised counterparts and provide more generous benefits. Around 26% of franchises are owned by people of color, compared with 17% of independent businesses generally. 

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