Additional State Activity
- Minimum Wage: Last summer, NY Governor Andrew Cuomo (D) convened a “Fast Food Wage Board” to examine minimum wage within the fast food sector. As expected, the Board recommended an increase in the fast food minimum wage to $15 per hour to be phased in by 2018 in New York City and 2021 across the rest of the state. The Wage Board process allowed Cuomo to circumvent the legislature in Albany. The National Restaurant Association (NRA) has filed suit challenging the Wage Board. IFA, along with the NFIB has filed an Amicus brief supporting NRA’s lawsuit. Oral arguments have been heard and a decision could be rendered at any time.
- Living Wage/Joint Employer: Similar to HB 6791 & SB 1004 from 2015, CT SB 391 was reintroduced and would have established a living wage rate for employees of big box retail stores and QSRs. The legislation would have set a dangerous precedent of a franchisor as a joint employer. IFA vigorously opposed the legislation on the grounds that small business owners should be able to determine the most competitive starting and subsequent wages for their employees within their respective industries and local economies. SB 391 would have levied a surcharge on the franchisor as a joint employer to cover its franchisees’ employees who elect to enroll in the Connecticut State Health Program, known as the Husky Program. IFA is preparing for a similar fight in 2017. Additionally, IFA Board member Michael Seid was appointed to the Connecticut Low Wage Board and is actively participating in ongoing meetings with the goal of making recommendations to the legislature later in 2016.
Franchise Relationship: Representative Daley reintroduced his franchise relationship legislation as PA HB 1620 (same bill number as 2014). This session’s (2015 – 2016) version is similar to Rep. Daley’s misguided HB 1620 from 2014. While the political climate in Pennsylvania remains favorable with Republican majorities in both the House and Senate, IFA is still aggressively opposing HB 1620 and testified against the bill in Harrisburg last October.
HB 1620 was heard by the House Consumer Affairs Committee. IFA, along with local FANs attended and testified at the hearing. While the Committee did not vote in October and has not taken any action on the bill thus far, there is still a chance HB 1620 will pass its first hearing as a result of political horse-trading, but would not progress beyond the House floor. Pennsylvania is in the final year of its two year legislative session and is scheduled to adjourn in the end of November, 2016.
- Predictive Scheduling and Minimum Wage: There were several legislative proposals that contained discriminatory minimum wage provisions against franchised businesses, all of which died when Massachusetts adjourned in the beginning of August 2016. Additionally, IFA worked against a potential harmful bill attempting to ban non-compete clauses from use in MA.
- Sourcing: Iowa Senate File 2277 was defeated in 2016. The legislation would have given franchisees almost unfettered latitude in purchasing petroleum products for resale. Although the amended bill's scope only concerned petroleum products, it would have set a dangerous precedent. As IFA explained to legislators, if this bill were to have passed, there would have been no logical reason to prevent franchisees from sourcing other products and services in a similar manner. Although franchising dodged a bullet this year, we fully expect the proponents of this legislation to return next session.
- Predictive Scheduling – The Seattle City Council & Mayor Murray are working towards introduction of a discriminatory predictive scheduling ordinance. The ordinance will initially only apply to large retail establishments with 500+ employees nationwide (Walmart, Target, Walgreens, etc…); quick service restaurants with 500+ employees nationwide, taking all franchisees employees across the country into account; and full service restaurants with the same numbers. The Council and Mayor have expressed their intentions to expand the ordinance to all businesses in the future. IFA is working with a broad coalition opposing the ordinance. Given the minimum wage legal efforts in Seattle, leverage is limited. The ordinance will most likely be voted on by the City Council towards the end of September with a likely implementation date of January 1, 2017. IFA is working with the local coalition and Seattle FANs to voice opposition at City Council hearings and via direct contact with Councilmembers.
- Non-Compete Agreements: IFA led the effort on LB 942 to allow arbitrators and the courts to enforce non-compete agreements after removing unreasonable restrictions, which is the standard practice in more than 40 states. Governor Ricketts signed the legislation in April.
- In California, two pieces of legislation are pending that will benefit franchising in the state. AB 2637 will make it easier to sell franchises in the state by amending the CA negotiated sales rule and exempt franchisors from disclosing the terms of all other franchise agreements to potential franchisees. Current law discourages negotiations between franchisors and potential franchisees. AB 1782 will allow franchisors to attend trade shows without having to register in the state and awaits another hearing.