Providing for Congressional Disapproval Under the Rule Submitted By the National Labor Relations Board Relating to ``Standard for Determining Joint Employer Status''

Floor Speech

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Ms. FOXX. Madam Speaker, pursuant to House Resolution 947, I call up the joint resolution (H.J. Res. 98) providing for congressional disapproval under chapter 8 of title 5, United States Code, of the rule submitted by the National Labor Relations Board relating to ``Standard for Determining Joint Employer Status'', and ask for its immediate consideration in the House.

The Clerk read the title of the joint resolution.
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Ms. FOXX. Madam Speaker, I yield myself such time as I may consume.

Madam Speaker, House Republicans are coming to the rescue of small business owners once again. The House will soon vote on a bipartisan Congressional Review Act resolution to rescind President Biden's antifreedom, antigrowth joint employer rule.

Business-to-business relationships are fundamental to American commerce. At its most basic level, a joint employer standard should ensure that the entity calling the shots in the workplace is legally liable. That is why it is important to get this right.

Under the Trump National Labor Relations Board rule, it was right. The Trump NLRB made sure that clear criteria were met before an employer was deemed legally liable for an individual's employment conditions.

Critically, the Trump rule recognized that the ability of businesses to control their destinies is a pillar of the American Dream. It established a standard that enticed countless men and women to start and grow small businesses and employ millions of workers.

The Biden NLRB upended this easy-to-understand joint employer standard that promoted economic growth and job creation. Under the new joint employer rule, small business owners are going to be compelled to acquiesce to more Big Government regulation and union boss control.

Here is why: The traditional Trump rule stated that two or more businesses were considered joint employers under the National Labor Relations Act if they shared actual, direct, and immediate control over the essential terms and conditions of employment, including hiring, firing, discipline, supervision, and direction of employees. This predictable and clear standard ensured employers would not be saddled with collective bargaining obligations or with liability of a company they do not control.

Under the Biden NLRB rule, an employer now includes those who have only indirect or even potential control over employees' essential terms and conditions of employment. Like a rerun of a low-rated TV show, we have seen this story before.

While the Trump Board restored the commonsense, traditional joint employer standard, the Biden NLRB's rule largely revives an Obama-era standard. The Obama NLRB upended decades of precedent and broadly expanded the definition of joint employment. That means working families and small businesses are up against a confusing and damaging new rule from Biden's NLRB, which will sow confusion and destabilize the economy in a time when persistently high prices are crushing hardworking Americans.

The results from Obama's joint employer rule give us an eerie glimpse of what is to come. Franchise operational costs increased by $33 billion. The decision caused 376,000 lost job opportunities in the franchise sector alone. It increased NLRB unfair labor practice charges by 93 percent, imposing significant litigation costs on businesses, both large and small.

Special interests are hard at work attempting to sweep these facts and the failed historical record under the rug. The AFL-CIO purports that the rule will in no way threaten or disrupt franchise arrangements or staffing firms. Big Labor set the line, and the Biden administration took the bait--hook, line, and sinker.

Moreover, this is not the only myth Big Labor is spreading about the resolution. Let me be clear. This resolution does nothing to restrict union activity. It does not alter the rights afforded to workers under the National Labor Relations Act. What it does is ensure the appropriate parties meet at the bargaining table to resolve labor disputes.

While the Biden NLRB's joint employer rule takes the side of the special interest masters, House Republicans have heard the pleas and are taking the side of workers, small businesses, and the American entrepreneurial spirit.

Congress must stand with franchisees, small and large business owners, and millions of workers by voting with a bipartisan mandate to rescind the Biden NLRB's joint employer rule.

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Ms. FOXX. Madam Speaker, I yield 2 minutes to the gentleman from Virginia (Mr. Good).

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Ms. FOXX. Madam Speaker, I yield 1 minute to the gentleman from Texas (Mr. Williams), the distinguished chair of the Small Business Committee.
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Ms. FOXX. Madam Speaker, I yield 2 minutes to the gentleman from Oklahoma (Mr. Hern), chair of the Republican Study Committee.
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Ms. FOXX. Madam Speaker, I yield 5 minutes to the gentleman from Michigan (Mr. James), and the prime sponsor of the resolution.

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Ms. FOXX. Madam Speaker, I yield 2 minutes to the distinguished gentleman from California (Mr. Obernolte).

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Ms. FOXX. Madam Speaker, I yield 2 minutes to the gentlewoman from Texas (Ms. Van Duyne).

Ms. VAN DUYNE. Madam Speaker, I rise today in support of this joint resolution to rescind this detrimental and job-killing regulation from the Biden administration. This final rule revives the Obama-era joint employer standard and leaves companies liable for employees whom they don't oversee or directly manage.

As co-chair of the Congressional Franchise Caucus and chair of the Committee on Small Business' Oversight Subcommittee, I have heard from countless franchise businesses about this rule. Overwhelmingly, they would suffer drastically. They would lose out on income, opportunity, and autonomy over their business.

The cost is not small. A very similar 2015 standard cost the franchising sector over $33 billion per year. It resulted in nearly 400,000 lost job opportunities, and it practically doubled litigation against franchises.

My home State of Texas continues to lead the Nation in job growth and is the fastest growing State for franchise establishments. This misguided policy would hurt these job creators who want nothing more than to provide for their families and offer job opportunities to our communities.

Madam Speaker, I urge my colleagues to support this resolution to push back on the Biden administration's vast overreach and give our small businesses the chance to survive and to thrive.

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Ms. FOXX. Madam Speaker, I yield 2 minutes to the gentleman from Michigan (Mr. Walberg).

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Ms. FOXX. Madam Speaker, I yield 2 minutes to the gentleman from Georgia (Mr. Allen).

Mr. Speaker, I include in the Record a letter from the National Asian/Pacific Islander American Chamber of Commerce and Entrepreneurship, U.S. Black Chambers, and U.S. Hispanic Chamber of Commerce supporting H.J. Res. 98. January 3, 2024.

Dear Member of Congress: On behalf of the undersigned organizations representing millions of minority-owned businesses across the United States, we write in support of the joint Congressional Review Act resolution concerning the National Labor Relations Board's (NLRB) joint-employer rule.

As discussed below, we support this bipartisan measure because of the opportunities it represents to bridge the racial wealth gap through entrepreneurship and fair competition. While our organizations agree with the aim of the National Labor Relations Act and the mission of the NLRB, this rule represents a broader need to modernize our laws for the diverse economy of the 21st century.

On October 26, 2023, the NLRB released a final rule setting forth a new standard for joint employer status under the National Labor Relations Act (NLRA). This rule would have a concerning impact on all small businesses, contractors, and franchisees around the country who could be held liable for potential NLRA violations for employees that they do not directly control, just by the virtue of entering a standard business-to-business contract.

We write you today, however, because we believe this rule could particularly impact minority-owned small businesses and franchisees that rely on these contracts to sustain and grow their businesses. The rule will take effect on February 26, 2024, unless Congress acts.

The franchise model has been a driver for minority entrepreneurship and job creation, by allowing budding entrepreneurs to partner with well-known brands and bolster local ownership of Main Street businesses around the country. It has also been particularly successful on ramping first- and second-generation immigrants into business ownership. We believe that the unintended consequences of this rule could threaten the entire franchise modal. It is our experience that when business models are transformed--for better or worse--the minority community, often under-capitalized, shoulders a disproportionate burden of the immediate harm. We are very concerned that what will remain of the franchise model could undo progress toward diversity and inclusion in this major sector of the economy.

This is particularly harmful at a time when minority entrepreneurs are just beginning to reap the benefits of this model. A recent study found that minority entrepreneurs are more likely to own franchised businesses as opposed to non- franchised businesses. The franchise model can be a helpful tool to encourage higher rates of entrepreneurship among women, minorities, and other underrepresented groups. Below are some of the key findings:

Nearly one-third (32%) of survey respondents said they would not own a business without franchising. Women and other first-time businessowners were even more likely to consider the franchise opportunity as critical to their ability to launch a small business.

Nearly one-third (26%) of franchises are owned by minorities, compared with 17% of independent businesses.

On average, Black-owned franchises earn 2.2 times more than Black-owned independent businesses; Hispanic-owned franchises earn 1.6 times more than Hispanic-owned independent businesses; and Asian-owned franchises earn 1.4 times more than Asian-owned independent businesses.

Beyond the concerns of the minority franchisee community that we represent, we also believe this rule could harm minority business success subcontracting to large prime contractors. Subcontracting is an important pathway for businesses that are just starting--which in recent years are more likely to be owned by minorities and women. This rule similarly threatens the relationship between subcontractors and their prime partners, undoing the important work that has already been done to diversify our supply chains.

For these reasons, we ask you to support the Congressional Review Act joint resolution of disapproval (H.J. Res. 98/S.J. Res. 49) to undo the NLRB's final rule on joint employer status. We must all collectively then ensure that policies that support a modern, diverse economy are at the front of the legislative calendar in the new year. Sincerely, National Asian/Pacific Islander American Chamber of Commerce and Entrepreneurship (National ACE). U.S. Black Chambers, Inc. U.S. Hispanic Chamber of Commerce.

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Ms. FOXX. Mr. Speaker, this letter raises concerns about the NLRB joint employer rule's ``impact on all small businesses, contractors, and franchisees around the country.''

Particularly, the letter notes that the rule could ``impact minority- owned small businesses and franchisees that rely on these contracts to sustain and grow their businesses.''

The letter continues: ``The franchise model has been a driver for minority entrepreneurship and job creation by allowing budding entrepreneurs to partner with well-known brands and bolster local ownership of Main Street businesses around the country. It has also been particularly successful on ramping first- and second-generation immigrants into business ownership.''

Mr. Speaker, I urge my colleagues to consider these views, vote ``yes'' on H.J. Res. 98, and overturn the Biden NLRB joint employer rule.

Mr. Speaker, I include in the Record a letter from a coalition of more than 70 organizations, led by the International Franchise Association, supporting H.J. Res. 98. November 9, 2023. Support Using the Congressional Review Act to Overturn the NLRB's Final Joint-Employer Rule

Dear Member of Congress: The undersigned organizations, on behalf of a diverse group of workers, small businesses, and critical sectors of our economy, write in strong support of H.J. Res. 98/S.J. Res. 49, a joint resolution of disapproval under the Congressional Review Act to nullify the National Labor Relations Board's (NLRB) Final Rule on Joint-Employer Status. This misguided rule will harm millions of workers and small businesses across the country, and we urge you to vote to protect your constituents from the NLRB's overreach.

Issued in October 2023, the NLRB's Final Joint-Employer Rule institutes an unworkable, overly broad set of circumstances under which a company is considered a ``joint employer'' under federal law. The Final Rule will cripple small businesses in numerous sectors by exposing them to frivolous litigation, eliminating jobs, and slowing wage growth across the country--just like it did when a similar standard was implemented in 2015. At a time of continued economic uncertainty, it is alarming that the NLRB has chosen to move forward on such a divisive and damaging joint employer rule.

Fortunately, in the coming weeks, members of Congress will have the opportunity to vote to nullify the NLRB's Joint- Employer Final Rule by utilizing the Congressional Review Act. By voting in favor of H.J. Res. 98/S.J. Res. 49, members can demonstrate that they support workers and small businesses in their states. Accordingly, we urge your support for nullifying the NLRB's Final Rule and look forward to our continued partnership. Sincerely,

Air Conditioning Contractors of America; American Bakers Association; American Car Rental Association; American Health Care Association; American Hospital Association; American Hotel & Lodging Association; American Pipeline Contractors Association; American Seniors Housing Association; American Staffing Association; American Supply Association; American Trucking Associations; Argentum; Asian American Hotel Owners Association; Associated Builders and Contractors; Associated Equipment Distributors.

Associated General Contractors of America; CAWA-- Representing the Automotive Parts Industry; Coalition to Promote Independent Entrepreneurs; Family Business Coalition; FMI--The Food Industry Association; Franchise Business Services; Global Cold Chain Alliance; Heating, Air- conditioning, & Refrigeration Distributors International; HR Policy Association; IHRSA--The Health & Fitness Association; ICSC; Independent Electrical Contractors; International Foodservice Distributors Association; International Franchise Association; International Warehouse Logistics Associations.

NATSO, Representing America's Travel Plazas and Truckstops; National Association of Convenience Stores; National Association of Electrical Distributors; National Association of Home Builders; National Association of Manufacturers; National Association of Professional Employer Organizations; National Association of Realtors; National Association of Small Trucking Companies; National Association of Wholesaler- Distributors; National Center for Assisted Living; National Cotton Ginners Association; National Council of Chain Restaurants; National Federation of Independent Business (NFIB); National Franchisee Association; National Grocers Association.

National Lumber & Building Material Dealers Association; National Multifamily Housing Council (NMHC); National Ready Mixed Concrete Association; National Restaurant Association; National Retail Federation; National Roofing Contractors Association; National Small Business Association; National Tooling and Machining Association; National Waste & Recycling Association; Power & Communication Contractors Association; Precision Machined Products Association; Precision Metalforming Association; Real Estate Roundtable; Retail Industry Leaders Association (RILA).

Small Business & Entrepreneurship Council; TechNet; Technology & Manufacturing Association; The Association for Hose and Accessories Distribution; The Community Gyms Coalition; Tile Roofing Industry Alliance; Transportation Alliance; TRSA--The Linen, Uniform and Facility Services Association; Truck Renting and Leasing Association; Wholesale Florist and Florist Supplier Association; Workplace Policy Institute; Workplace Solutions Association; U.S. Chamber of Commerce.

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Ms. FOXX. Mr. Speaker, the letter argues that the NLRB's joint employer rule is ``misguided'' and ``will harm millions of workers and small businesses across the country.'' The letter also states the final rule ``will cripple small businesses in numerous sectors by exposing them to frivolous litigation, eliminating jobs, and slowing wage growth across the country, just like it did when a similar standard was implemented in 2015.''

The letter continues: ``At a time of continued economic uncertainty, it is alarming that the NLRB has chosen to move forward on such a divisive and damaging joint employer rule.''

Mr. Speaker, it is clear to me in listening to this debate this morning from speaker after speaker on the other side that they have no experience in the private sector and no idea of how our economy works. Our country has flourished economically because of freedom and the entrepreneurial spirit that exists in this country. They constantly want to squelch both of those principles.

I will point out a key difference in the Republican and Democratic Parties illustrated by the joint employer rule. Listen carefully to the language under debate. The conservative language: direct, immediate. The liberal language: indirect, potential.

Any casual observer of American politics can understand how the blatant attempt to smuggle legal ambiguity into the otherwise clear-cut law will be abused by a weaponized and partisan agency. It will open every American franchisor and franchisee to lawfare from the left if it does not toe the Democratic Party line.

With the spurious pretenses we have seen this administration use to go after Catholic Americans and concerned mothers, we don't need to give it another tool to go after American small businesses.

Therefore, Mr. Speaker, I urge the passage of the resolution, and I yield back the balance of my time.

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Ms. FOXX. Mr. Speaker, on that I demand the yeas and nays.

The yeas and nays were ordered.

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