In Bipartisan Vote, U.S. House Overturns Expanded Joint Employer, Stands Up For Franchising
WASHINGTON – Today, the U.S. House of Representatives passed H.J.Res.98, a Congressional Review Act (CRA) resolution overturning the National Labor Relations Board’s (NLRB) expanded joint employer rule. Led by Congressman John James (R-MI), the CRA passed the chamber by a bipartisan vote of 206-177.
The CRA now heads to the Senate, where it was introduced by U.S. Senator Bill Cassidy (R-LA) and has 44 co-sponsors.
“We commend lawmakers for defending franchising on a bipartisan basis by rejecting a rule that needlessly harms the franchise business model that provides upward mobility for employees and business ownership opportunities,” said Matt Haller, President and CEO of the International Franchise Association. “This bipartisan vote not only demonstrates that support for franchising spans the political spectrum, but also recognizes the Biden Administration’s joint employer policy is yet another component of their economic agenda that favors Washington insiders and union leadership over working Americans and small businesses.”
Released in October of 2023, the NLRB’s final rule broadens the scope of joint employment between franchisors and franchisees. The rule newly defined and ambiguous concept of "indirect control" introduces a pathway for categorizing franchisors and franchisees as joint employers – surpassing all previously established standards, including a previous Obama era standard which resulted in an annual cost of $33.3 billion for franchises, the loss of 376,000 jobs, and a significant increase of 93% in lawsuits.
A diverse spectrum of economic and business organizations, including the National Asian/Pacific Islander American Chamber of Commerce and Entrepreneurship (National ACE), U.S. Black Chambers, Inc. and U.S. Hispanic Chamber of Commerce, have mobilized against joint employer.
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 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.