A union-backed effort to bolster flagging dues and membership at the expense of franchise businesses across the United States received a huge boost from the Obama administration recently. The highly partisan National Labor Relations Board’s (NLRB) Division of Advice ruled that McDonald’s Corp. could be designated as a “joint employer” with its franchisees. This recommendation is wrong and unjustified. It would upend years of precedent and threaten the sanctity of contracts, a bedrock principle of the rule of law. Millions of jobs and the livelihoods of independent business owners dependent on the success of the franchise model are at risk.
The move was clearly intended to benefit labor unions such as the Service Employees International Union (SEIU). A new “joint employer” standard would make it easier for unions like the SEIU to organize multiple franchisees since they would be considered part of a single entity. This could result in disruptions of service at multiple locations, harming workers and consumers. At the same time, the unions argue that corporations already assume operational control over employment and human resources decisions. In fact, corporate headquarters have no control over day-to-day operations of their franchisees. Taking them over would be a huge and expensive task.
Thirty years of legal rulings and practice dictate the relationship between franchisors and franchisees, which is cemented by legal contracts. Those contracts state clearly that employee management decisions are at the discretion of the franchisee, not the franchisor.
Under this arrangement, franchisees and their employees do not work for franchisors. Across the United States, franchisees have built nearly 770,000 businesses and employ roughly 8 million people. Franchisees establish day-to-day employment practices and policies for their own businesses. They decide who to hire and fire, wage rates, benefits and work schedules. If the “joint employer” recommendation is adopted, these thousands of small business owners would lose control of the operations they built and lose equity that they worked so hard to create.
The NLRB recommendation is a drastic and far-reaching solution in search of a problem. Ample federal, state and local remedies are available and are regularly used to enforce current law. These remedies include NLRB action, state attorneys general action and private rights of action. Given these many avenues of redress, why destroy the tenets of the franchise model that has been providing jobs to the economy for the last 50 years? It would do more harm than good to workers, consumers and small business owners. The NLRB would be wise to ignore this flawed opinion because it would make hiring workers more difficult in an already challenging environment.
America’s small business community is a powerful voting bloc. In fact, individuals who work for or run a small business comprise 70 million people in the United States—that’s one-third of the U.S. voting population. But if we don’t keep in mind the small business issues that are important to all of our economic security, those numbers don’t mean much. (more…)
From Yahoo’s Marissa Mayer to Ursula Burns at Xerox, women capture a growing number of top spots at leading corporations. Compared to the 1960s, when women were barred from certain jobs, we have made great strides in earning management positions at various levels. But despite the gains over the last 50 years, women still account for only 24 of the Fortune 500’s chief executive officer positions. (more…)
As many of you probably already know, Kansas City is working to become the most entrepreneurial city in the country through the Greater Kansas City Chamber of Commerce’s Big 5 Ideas. To reach that goal, we have to ensure our community is inclusive so that all entrepreneurs can turn their unique ideas into reality and, hopefully, a healthy bottom line. Engaging women-owned businesses and molding city government’s processes to be a conduit for prosperity and not a paperwork impediment is essential to that endeavor. (more…)
There’s a threat facing the small business community that could cost small employers billions of dollars in lost revenue. What’s even more disturbing is it’s not something entrepreneurs are usually prepared for, like a drop in consumer demand or the rising cost of doing business. This little-known threat is coming from what are commonly referred to as patent trolls, and it’s frequently affecting end users of common technologies, such as a coffee shop offering WiFi to its customers. (more…)
When Digital Sandbox KC launched in February 2013, we were committed to tackling one of the most important problems facing the United States: how can we encourage the creation of more startups? (more…)
Every entrepreneur knows that “cash is king.” But the tougher lesson—and one that many business owners struggle to learn—is that credit standing is just as important. Our financial track record follows us everywhere. If it’s bad, it will haunt us for a long time. If it’s good, it opens doors and gives us access to the cash we need to maintain and grow our businesses. (more…)
The holiday season is here, and for a lot of people, it’s a time for giving gifts. Before you drive to the mall or head to Amazon.com, though, I’d encourage you to check out the locally owned shops just down the street. (more…)
Entrepreneurship can be an intimidating thought for some. However, the definition is sometimes misunderstood. You don’t have to start your own business to be an entrepreneur. An entrepreneur, whether a business owner or employee, solves problems for profit, which is essential to boost the economy. (more…)