Sending Office: Honorable Henry Cuellar
Republican Lead: Rep. Steve Chabot
Co-sponsors: Rep. Scott Peters, Rep. Dean Phillips, Rep. Lou Correa,
Next week, the House will consider the Protecting
the Right to Organize (PRO) Act (H.R. 2474), which attempts to implement adequate safeguards to protect rights of the American worker.
While well-intentioned, this legislation falls short in the area of franchising and effectively eliminates the opportunity for entrepreneurs to achieve the American dream by opening and operating a franchise business.
How could the PRO Act eliminate franchising? The bill would amend the National Labor Relations Act (NLRA) to codify the NLRB’s harmful 2015 joint employer standard, which makes franchise brands liable for the actions of their franchisees.
This unnecessary liability plainly eliminates the incentive to grow a business through franchising. In recent years, the unclear joint employer standard has already cost the franchise business community $33.3
billion per year and led to a 93% increase in joint employment litigation.
In my district alone nearly 12,000 jobs and over 1,000 establishments exist today because of franchising. These small businesses pay $320 million in payroll taxes, contribute $857 million in economic output, and $491 million into the national GDP.
Nationally, the economic impact of franchising is staggering: 733,000 establishments, 7.6 million jobs, and $404.6 billion of the US GDP.
To protect these vital establishments, my amendment would clarify that a brand’s efforts to preserve its trademark to ensure the brand is uniform and consistent to the public would not be classified as evidence of joint employment. Employment controls, such
as hiring, firing, pay and scheduling would not be considered a protected trademark control.
This vital clarification will ensure that the PRO act will not cripple the vast economic impact that franchising brings to the economy. Join me to champion small businesses, franchising, and a continuation of the economic boom we see today in the United
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