House Republicans moved Wednesday to rein in the National Labor Relations Board, the main federal labor law enforcement agency, by advancing legislation that would undermine the board's complaint against McDonald's Corp.
The lawmakers argue that the board overstepped its authority in the case, which could have a major impact on all companies that franchise out their brand.
The House Education and the Workforce Committee voted 21-15 to pass the Protecting Local Business Opportunity Act. The legislation would clarify that a business can be held liable for violations of workers' rights at another company, including its franchisees, only if it has "actual, direct and immediate" control over the second company's workforce. Effectively, it would free most franchisers from liability caused by their franchisees as well as limit liability when a company subcontracts its operations.
"The National Labor Relations Board has played a leading role in advancing the president's flawed, top-down approach to the economy, and its effort to redefine what it means to be an employer is just the latest example," said committee Chairman John Kline, R-Minn. "It's time to get Washington out of the way and let small businesses do what they do best: creating jobs and opportunity for workers and their families. This commonsense proposal is an important part of that effort. The legislation will stop a handful of government bureaucrats from upending countless small businesses and help working families and job creators succeed."