Political Update: What's going on with NLRB

Michael Layman, vice president of regulatory affairs at the International Franchise Association, said the organization had been “waiting at DEFCON 1” for the decision on the Browning Ferris case.

As expected, the National Labor Relations Board ruled Aug. 27 that Browning-Ferris Industries, a waste-disposal company based in Houston, was responsible for workers it employed that were provided by a staffing agency. They decided Browning-Ferris is a joint employer of its contract employees and, therefore, responsible for their treatment.

Industry groups like the IFA oppose the verdict, saying it is a threat to the private sector.

“The bottom line is that the decision is as bad, or worse, than we feared,” Layman said.

For franchise business, the decision will transform the level of control that franchisees have in in running their own business as well as what franchisors can contribute to their franchisees. According to Layman, it threatens the franchise business model, because franchisors universally have nothing to do with employment practices of the franchise.

“What the NLRB has done has teed up a perfectly nebulous new joint employer standard that allows them to target any business that they want,” Layman said.

The decision is seen by many as step in streamlining corporate structures to unionize workers and do away with small businesses.

“This decision is designed to drive a wedge between franchisors and franchisee,” Layman said.

In order to protect the autonomy of franchises, IFA has partnered with hundreds of small business owners and its allies. Elected leaders from both parties seem to be responding very positively to franchise owners in coalition round tables as well as other joint employment meetings across the country, according to Layman. The IFA is hopeful that numerous members of Congress will defend small business owners in their districts and is identifying those members in Congress.

“We will be trumpeting the negative impact of the [decision] to all of our partners, IFA members and all policy makers to be sure that everyone understands that small businesses have their livelihood threatened by the outcome of this decision,” Layman said.

The IFA recommends that franchisees go to franchiseactionnetwork.com or savelocalbusinesses.com to get involved with the effort to protect their business.