Weekly Column by Lamar Alexander: “Rolling Back the Labor Decision That Threatens to Steal the American Dream from Owners of the Nation’s 780,000 Franchise Businesses and Millions of Contractors”

Posted on September 12, 2015

This week, I introduced legislation to roll back the National Labor Relations Board (NLRB) “joint employer” decision that threatens to steal the American Dream from owners of the nation’s 780,000 franchise businesses and millions of contractors. 

The new “joint-employer” standard would make big businesses bigger and the middle class smaller by discouraging companies from franchising and contracting work to small businesses. Millions of employees will lose the ability to negotiate things like pay, hours and leave time with their actual employer, because those decisions will now be made by the larger franchisor or contracting company and the union.

Last month, the NLRB adopted this new standard, which redefines “joint-employers” and threatens the more than 21,000 Tennessee franchisees and the nearly 224,000 Tennesseans they employ. The ruling means that in many cases multiple employers will have to jointly negotiate working conditions with unions and share liability for labor law violations.

Since 1984, federal labor policies held that two separate employers are “joint employers” if both employers have actual, direct and immediate control over employment terms and working conditions, such as being responsible for tasks like hiring and firing, setting work hours, issuing direction to employees, determining compensation and handling day to day record keeping.

To roll back this radical decision and protect small businesses, this week I introduced The Protecting Local Business Opportunity Act that would reinstate the long-held standard that an employer must have “actual, direct and immediate” control over an employee to be considered a joint-employer – the same standard that was in place decades before the board’s extreme decision.

This latest action by the board is an outrageous move that will wreak havoc on families and small businesses across the country. The ruling seems intended to destroy a small business opportunity for the thousands of Tennesseans working 12 hours a day as franchisees or contractors, who face the pressure of meeting payroll, paying taxes, and providing for their families.

It doesn’t make sense for the board to question law that has been settled for decades. Our commonsense proposal restores the policies that served workers, employers and consumers well.

The NLRB ruling will jeopardize small businesses, worker rights and job growth. This is an ominous move and one which I will continue to do everything in my power to stop.