IFA and Business Allies team up to thwart David Weil’s return to DOL

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In a victory for the franchise’s business model, David Weil’s return to his former position as head of the Department of Labor’s wage and hour division was voted down by the US Senate last week. The 53-47 vote against was made possible by three Democrats joining the 50 Republicans who voted in unison to defeat the nomination. Those Democrats were Joe Manchin of West Virginia and the two Arizona Senators, Kyrsten Sinema and Mark Kelly. Weil’s nomination was the first of Biden’s presidency to fail in the Senate.

The perceived threat to franchising was based on Weil’s position on joint employer rules. The fear within the franchisee community was that Weil would blow up the franchise model by deciding to classify franchisees as employees of their franchisor(s). Yes really. For anyone involved in franchising, this needs no further explanation and is a great relief, at least for now.

The IFA – along with a number of allies including the National Restaurant Association, National Association of Wholesaler-Distributors, Associated Builders and Contractors, chambers of commerce and oil and gas industry groups – had lobbied for nearly a year to educate elected officials about franchising and the potential harm Weil’s return would mean to the American economy and the millions of people employed in and around franchising.

IFA President Matt Haller said the IFA sent “a steady drumbeat of CEOs and franchisees” to the offices of Manchin, Sinema and Kelly.

“It should come as no surprise that franchise owners spoke out against a candidate who wrote very clearly that he viewed franchisees as mere ’employees’ at the stores in which they invested their life savings,” said said Michael Layman, senior vice president of government relations and public affairs at the IFA, in an email reported by BloombergLaw.com. It “never made sense to push forward an anti-small business candidate” in the midst of a pandemic upswing, he added.

Senator Kelly, a former US Navy astronaut and pilot, knows franchising better than most members of Congress, for two reasons. When she was 26, his wife, former congresswoman Gabby Giffords, was CEO of El Campo Tire Warehouses, a 15-unit automotive chain founded by her grandfather. Second, Kelly was one of the keynote speakers at the 2013 Multi-Unit Franchise Conference in Las Vegas, where he spoke with multi-unit owners and operators and had first-hand experience people behind the public face of the franchise.

Prior to Manchin’s “No” vote (who voted for Weil in 2014), West Virginia franchise owners approached their senator directly with their concerns. “West Virginia’s small businesses are the heart of our economy and our communities,” Manchin said in a public statement. “Sir. Weil’s background and previous statements are problematic for many West Virginia employees and business owners. Manchin said he could not support the nomination because he believed the health of small businesses would not be not Weil’s “top priority”.

Weil’s loss doesn’t mean the existential threat to the franchise’s business model is over. Another candidate will follow and may hold many of the same beliefs Weil set out in his 2017 book, The cracked workplace. Regardless of its stated stance on the franchise model, the book contains some positive ideas about wages and how companies are using (abusing?) the so-called gig economy to keep wages and benefits down. low. Again, this is a separate issue from the joint employer.

And in terms of wages, Haller said, the data shows that franchise jobs “actually pay higher wages and provide better benefits than non-franchise jobs and other small non-franchised businesses.”

How to get involved

This is a major victory for the IFA’s lobbying and education efforts, and Haller encourages franchisees and franchisors to get involved in influencing public policy going forward. To learn more about IFA advocacy, the Franchise Action Network, FranPAC and other ways to get involved in protecting the franchise model, click here.

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