President Biden Turns Back on Small Businesses with Veto of Bipartisan Legislation

May 03, 2024

Vetoes resolution overturning harmful joint employer standard; Ignores needs of Main Street during National Small Business Week and petition of 5,300 small business advocates

WASHINGTON – The International Franchise Association (IFA) today released the following statement in response to President Joe Biden’s veto of H.J. Res. 98, the Congressional Review Act resolution to overturn the National Labor Relations Board’s expanded joint employer rule. The veto, which took place during National Small Business Week, comes after 5,300 franchise community leaders from all 50 states sent a petition to the White House last month urging President Biden to sign the legislation to protect small businesses.

“President Biden claims to be a champion for small businesses, but today he turned his back on franchising, a business model that’s done more to put countless Americans into small business ownership, particular for traditionally underrepresented minorities, women and veterans,” said Matthew Haller, IFA president and CEO. “The Administration has solidified its position that it cares more about special interests than small business owners and their employees, who face a near-daily onslaught of costs and uncertainties from the Biden Administration’s regulatory assault.”

The rule, issued in October 2023, would deem franchisors and franchisees jointly liable, taking away the independence of franchise owners – the hallmark of the franchise business model. When a similar rule was issued in 2015, it cost franchised businesses $33.3 billion per year, resulted in 376,000 lost job opportunities, and led to 93% more lawsuits.

Today’s veto follows bipartisan passage of H.J. Res. 98 in the U.S. House in January and the U.S. Senate in April, which would have overturned the rule and prevented any future NLRB from issuing a similar rule. In addition, the Fifth District of Texas struck down the rule following an IFA and coalition-led lawsuit, taking aim at the NLRB for exceeding the scope of its authority and violating the Administrative Procedure Act (APA) by failing to respond to comments regarding the rule’s harmful economic consequences.

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About the International Franchise Association:

Celebrating over 60 years of excellence, education, and advocacy, the International Franchise Association (IFA) is the world’s oldest and largest organization representing franchising worldwide. IFA works through its government relations and public policy, media relations, and educational programs to protect, enhance and promote franchising and the approximately 806,270 franchise establishments that support nearly 8.7 million direct jobs, $858.5 billion of economic output for the U.S. economy, and almost 3 percent of the Gross Domestic Product (GDP). IFA members include franchise companies in over 300 different business format categories, individual franchisees, and companies that support the industry in marketing, law, technology, and business development.