Republican Sen. Lamar Alexander discussed recent policy reforms with franchise owners Tuesday while also warning that one major issue is at a standstill.
The International Franchise Association (IFA) hosted the senator as part of its Legal Symposium Conference. Franchise business owners gathered to hear the latest on the legal and regulatory issues that impact them. President Donald Trump entering office last year has met changes aimed at creating a more business-friendly environment.
The White House and congressional leaders have worked to lower taxes and regulations in that effort. Sen. Alexander has played a critical role in that as the chairman of the Senate Health, Education, Labor and Pensions Committee. But one lingering issue, especially for franchises, is an updated version of what is known as the joint-employer standard.
“What I have discovered is that those who like a center-right administration, which I do, have a hard time accepting success,” Alexander said during the conference. “I can probably do the accomplishments and achievements over the last 15 months in a sixty-second version, which would be a better economy, lower taxes, fewer regulations, and more conservative judges.”
Alexander also points to reforms in the financial sector and new appointees filling critical federal roles as a good shift in direction. Labor Secretary Alexander Acosta was confirmed to the position April 2017. The National Labor Relations Board (NLRB) gained a new majority Jan. 12.
“That’s a pretty good list,” Alexander said. “In fact, if you only did the economy, taxes, regulations, and judges, at the end of four years, most administrations would be pretty happy with the different direction. So if you cut through all the tweets, the chaos, confusion, and cable television in Washington D.C. and look at the direction of the country, I think that it’s definitely different.”
President Trump was able to gain a majority vote on the National Labor Relations Board (NLRB) when his last nominee filled the fifth empty seat April 11. Former President Barack Obama still has two of his picks serving since they have staggered five-year terms. His board instituted the joint-employer update that the new majority is fighting.
The joint-employer standard is used to determine whether an employer is legally responsible for the employees of a company it contracts with. Alexander and other critics have argued the rule undermines the franchise business model which has been a pathway for people to launch small businesses and enter the middle-class for decades.
“The joint-employer decision during the last administration was a direct assault on that route to the middle-class,” Alexander said. “I’m glad to see this administration headed in a different direction on that, as well as in the micro-union decision and beginning to repeal the ambush election rule. These are all major decisions.”
The joint-employer standard was previously determined based on whether a company has direct control over the employment policies of another business. The updated standard is instead determined based on indirect control which critics have denounced as an overly vague overreach of federal powers that put employers at unnecessary legal risk.
The Obama-era NLRB was able to update the standard when ruling in a 2015 case involving Browning-Ferris Industries. The new board majority has struggled to reverse the change with the most recent setback being a possible conflict of interest involving board member William Emanuel.
Congressional Republicans have also attempted to roll back the updated standard as well. The Save Local Business Act was proposed to clarify the law so future administrations make such drastic changes in how it is interpreted. It is also written to fix an even greater underlying problem which has allowed for a patchwork of legal interpretations.
“So where are we likely to go on joint-employer,” Alexander said. “The House has done its job but in the Senate, to get legislative results you need a 60 percent vote. That’s going to be impossible to do without Democratic support. We don’t have any Democratic support in the Senate right now.”
Alexander adds that it likely comes down to labor board members to fix the problem in the meantime. Unless they are able to get enough support from their colleagues on the left, the bill is not going to pass. The House was able to pass its version of the bill with some Democratic support November 2017.
“I was only one of eight House Democrats to vote for the Save Local Business Act in November,” Democratic Rep. Stephanie Murphy said during the conference. “And I didn’t do it lightly. It wasn’t an easy vote. In fact, it was a very hard vote because many people whose views I respect were on the other side of the issue. But my door was open to everyone and we met with both sides.”
Murphy added that she was motivated to get into politics to find solutions and break through the partisan bickering. She decided to support the bill after hearing from franchise business owners – determining that the law needed to be codified so it can be clearly followed and that the definition detailed in the bill was reasonable.
