NFIB Supported Franchise Protections Now Law

Date: February 17, 2016 Last Edit: February 24, 2016

NFIB Victories in Michigan!

After almost
a year of effort by NFIB, the final bills necessary to ensure that state law in
Michigan recognizes that franchisors and franchisees are separate distinct
employers were signed into law by Governor Snyder.

Public Acts 17, 18, 19 and 20 of 2016 amend the state’s MIOHA, Unemployment Insurance and
Wage and Hour laws to clarify that franchisors and franchisees are treated as
separate businesses under Michigan law. The bills are part of a package of
legislation made necessary because of a ruling by the NLRB (National
Labor Relations Board) that changed current law in the relationship between
employers, franchise arrangements and independent contractors.

Two other bills
in the legislative package were already signed
into law by Governor Snyder at the end of 2015 as Public Acts 266 and 267 of 2015.

legislation is necessary because of a new ruling by the federal NLRB (National
Labor Relations Board) that expanded the definition of a “joint employer” to
make a franchisor responsible for a franchisee’s employees even
in areas where they do not exercise direct control over employees of the
franchisee. The bottom
line is that the NLRB actions were encouraged by the Obama administration in
order to make it easier for big labor unions to strike and organize franchise
business employees and small independent businesses. This action threatens the
future viability of the franchise business model, one that has been successful
in creating hundreds of thousands of jobs and successful small business

The Michigan
Legislature’s action is to be sure that, in matters of state law, the ruling by
the NLRB will not affect the traditional and correct interpretation of the
employer and employee relationship that has governed franchise law in our state
for decades.

However, the
damage done by the NLRB and labor unions still needs to be corrected at the
federal level and federal legislation has also been introduced in Congress to
nullify the actions of the NLRB. The “Protecting Local Business Opportunity
Act” HR 3459 is sponsored by U.S. Representative John Kline from Minnesota.
Michigan Congressmen John Moolenaar, Tim Walberg, Bill Huizenga and Mike Bishop
are all co-sponsors of the bill. In the U.S. Senate an identical bill, S.2015,
is sponsored by Senator Lamar Alexander from Tennessee. NFIB will continue to
fight for small business and the franchise model in Congress.

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