Job Creators Network Applauds Labor Secretary’s Withdrawal of Joint Employer Guidance

Calls for legislative fix to protect the franchise business model from future activist administrations

June 7, 2017

Atlanta—Today, the Job Creators Network (JCN) commended U.S. Secretary of Labor Alexander Acosta for withdrawing the previous Labor Department’s joint employer guidance. Secretary Acosta’s decision will protect the franchise and independent contractor business models that account for millions of the nation’s small businesses and tens of millions of jobs. JCN is calling on Congress to now produce a legislative fix that will protect small businesses from future activist administrations that may reinstate this guidance.

Treating franchise small businesses as joint employers with their franchisors threatened to upend the wildly successful franchise model. It would have made franchisors liable for the thousands of daily decisions made by what are essentially independent small businesses. As a result, liability insurance would skyrocket and this cost would be passed on to franchisees who often already struggle accessing the capital necessary to thrive. This would have also forced franchisors to rely on those with a proven track record and not take chances on upstarts – cutting off a well-worn path to the American Dream.

JCN CEO Alfredo Ortiz explains how joint employer would have had a particularly negative impact on minorities in a Florida Sun-Sentinel op-ed. Read it here.

Ortiz released the following statement:

By withdrawing the potentially devastating joint employer guidance, Labor Secretary Alexander Acosta took a major step in advancing President Trump’s agenda of lifting job killing mandates in order to create a more robust and vibrant economy that will lead to more and better paying jobs for all. By protecting small business franchises from having to share employment with their franchisor, Secretary Acosta is protecting tens of millions of good jobs and a well-worn path to the middle class, especially for minorities.