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Small business owners implored Congress to rein in the National Labor Relations Board, the main federal labor law enforcement agency, warning that the board's recent moves to change the definition of "joint employer" threatens to undermine entrepreneuers like themselves. They made their case during a hearing Tuesday held by the House Education and the Workforce Committee.

"I am proud to have been part of starting a successful franchise operation, but from a legal, business and cultural perspective, the joint employer standard is harmful to the future of my locally owned business," said Mara Fortin, owner of a California cake store. "The real world consequence of the NLRB's decision is that it will lead to a loss of autonomy for local small business owners."

The hearing concerned legislation called the Protecting Local Business Opportunity Act, which would limit the legal definition of a joint employer to two or more businesses that have "actual, direct and immediate control" over a group of workers' terms and conditions. The legislation would effectively undo a recent NLRB decision in a case called Browning Ferris that said a contractor can be considered the joint employer of a subcontractor's employees.

The board also has a pending case against McDonald's Corp. that could expand the definition to include corporate franchisers and their franchisees. It has solicited legal opinions on whether it should make companies that hire temp agencies also joint employers of the agencies' employees. Both cases could vastly expand legal liability for businesses by making them responsible for labor practices at other companies. That could draw them into disputes with labor unions and make them vulnerable to NLRB legal action.

The business owners expressed concerns that the changes could rob franchise owners of their independence. "My franchiser has nothing to do with the day-to-day operations of my small business. But if they are to be considered a joint employer, my franchiser may decide to exert more control over my business, relegating me to a middle manager role for which I did not sign up," Fortin said.

They found a sympathetic audience among the committee's Republicans. Rep. Phil Roe, R-Tenn., chairman of the health, education, labor and pensions subcommittee, noted that this was the third hearing on the subject and he had yet to hear from a single franchiser or franchisee who endorsed the Browning Ferris decision or any other potential expansion of the joint employer standard.

"If it ain't broke, don't fix it," Roe said.

The committee's Democrats were skeptical of the business owners' concerns, though, and few have backed the legislation, which has 43 GOP cosponsors but just one Democrat.

Rep. Jared Polis, D-Colo., told the entrepreneurs that they were reading too much into the NLRB's actions. He argued that the Browning Ferris decision was a narrow one that did not create a broad precedent and noted the McDonald's case has yet to be decided. Therefore, there was no basis for the anxiety.

"A simple reading of the [Browning Ferris] case would suggest that you have nothing to worry about," he said.

Rep. Virginia Foxx, R-N.C., retorted that if that was the case, then the Democrats' opposition to the Protecting Local Business Opportunity Act didn't make much sense.

"If my colleagues don't think that the legislation would have any impact, then I don't know why they would oppose it," she said.

http://www.washingtonexaminer.com/small-business-owners-urge-lawmakers-to-curb-nlrb/article/2573029