IFA Applauds Bipartisan Congressional Review Act Effort to Overturn Joint Employer Rule
WASHINGTON – The International Franchise Association (IFA) today applauded a bipartisan and bicameral coalition for introducing Congressional Review Act (CRA) resolution of disapproval that would overturn the final joint employer rule issued by the National Labor Relations Board (NLRB).
Led by U.S. Senators Joe Manchin (D-WV), Bill Cassidy (R-LA) and U.S. Representatives Virginia Foxx (R-NC), John James (R-MI), the CRA requires a simple majority vote to pass.
“The CRA is one of the most effective means for Congress to curb regulatory overreach, and we are grateful to this bipartisan group of lawmakers for their swift and decisive action to protect franchising,” said Matt Haller, President and CEO of IFA. “Make no mistake: allowing this NLRB rule to stand would destroy the franchise model, imperiling franchisors and franchisees alike. Members of Congress should support this bipartisan CRA and stand up for the 800,000 franchises whose livelihoods will be negatively impacted by this rule.”
Issued on October 26, the NLRB’s final rule expands joint employment between franchisors and franchisees. The rule provides a path for franchisors and franchisees to be deemed joint employers based on a new, vague definition of “indirect control.” It goes further than an Obama-era standard that cost franchises $33.3 billion each year, destroyed 376,000 jobs, and led to 93% more lawsuits.
During the last expansion of the joint employer rule in 2015, franchises lost $33.3 billion each year, 376,000 jobs were lost and lawsuits increased by 93%. According to research conducted by Oxford Economics, 70% of franchisees expect increased litigation and costs due to the NLRB rule, while 66% believe the new standard will raise barriers to entry into the franchising sector.
Celebrating over 60 years of excellence, education, and advocacy, the International Franchise Association (IFA) is the 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 790,492 franchise establishments that support nearly 8.4 million direct jobs, $825.4 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.