In a letter sent this week, a coalition of more than two dozen prominent free market organizations and individuals, led by the Center for Individual Freedom (CFIF), urged Congress to support the Save Local Business Act.

The legislation aims to restore the traditional joint-employer standard under the National Labor Relations Act (NLRA), which has been a cornerstone of American labor law for decades. This standard determines when two or more entities can be considered joint employers of the same employees.

Understanding the Joint-Employer Standard

Under longstanding court precedent and National Labor Relations Board (NLRB) interpretation, a business could only be deemed a joint employer if it exercised direct and immediate control over essential terms and conditions of employment. This clear standard provided certainty for businesses, franchisees, and workers alike.

However, recent regulatory changes have created confusion and uncertainty in the business community. The new interpretation expands the definition of joint employer to include indirect control and even the mere reservation of authority to control, even if that authority is never exercised.

Impact on Small Businesses

The coalition argues that this expanded definition threatens the franchise business model and could have devastating consequences for small business owners and job creation. Franchising has long been a pathway to entrepreneurship for many Americans, allowing individuals to start their own businesses with the support and brand recognition of established companies.

"On behalf of the undersigned organizations and the millions of members, supporters and activists across America whom we collectively represent, we write to urge your support for the Save Local Business Act," the letter states.

The legislation would provide much-needed clarity and restore the traditional standard that has served American businesses and workers well for generations. It would ensure that businesses are only considered joint employers when they exercise actual, direct, and immediate control over essential employment terms.

Broader Economic Implications

Supporters of the Save Local Business Act argue that the current regulatory uncertainty discourages business expansion, franchise development, and job creation. By restoring the traditional joint-employer standard, the legislation would provide the predictability and stability that businesses need to invest, grow, and create jobs.

The coalition includes organizations representing millions of business owners, workers, and consumers across the country. Their united support demonstrates the broad consensus that the Save Local Business Act is necessary to protect American entrepreneurship and economic opportunity.

As Congress considers this important legislation, the coalition urges lawmakers to support policies that promote economic growth, protect small businesses, and preserve the franchise model that has created countless opportunities for American entrepreneurs.