Hoyer and his entourage of staff, hotel workers, and reporters trooped to another suite, and another, the grandest one yet. This one had a tub in the bedroom itself, which the whip found amusing.
“I”ll call Terry and tell him we found another room with a tub in the bedroom,” he told a staffer, smiling jovially, referring to an associate who once had one too.
Hoyer wasn’t participating in the tour because he was looking for a place to stay. Rather, he was there to listen to the people who own franchises — along with McDonald’s and Burger Kings and other fast food outlets — who are bracing for a decision expected from the National Labor Relations Board this week that could make franchisers and general contractors liable for the labor law violations of their franchisees and subcontractors, and allow workers to bargain directly with businesses at the top of the chain. That likely would prompt principal contractors to exert more control, rather than take the risk of being sued for their subcontractors’ mistakes.
"It would turn the owners of these businesses into co-managers. They would start to be part of a corporate structure,” explained Rolf Lundberg, a spokesman for Choice Hotels, at the lunch that followed. Choice Hotels owns brands like Comfort Inn and Econolodge, and licenses its logo and operating systems to independent owners — a separation that Lundberg warned could soon disappear.
“Ultimately, you might see the elimination of the franchise model as a way to do business and as a way to rise up the economic ladder in this country,” Lundberg said.
The event was a production of a group called the Coalition to Save Local Businesses, which formed earlier this year to raise awareness about the NLRB’s push to make franchisers and other businesses accountable for the labor law violations of their franchisees and subcontractors.
The collection of 20 associations — including some of the biggest restaurant, hotel, retail, and construction lobby groups in the country — has coordinated testimony at hearings in the House and Senate on the issue, run ads explaining what an adverse decision could mean, and set up at least 16 meetings with franchisees in legislators’ home districts during the congressional recess. The Hoyer lunch was part of an attempt to reach out to Democrats, in particular — from Jared Polis of Colorado to Henry Cuellar of Texas — as the coalition considers legislative remedies to a worst-case scenario.
The NLRB’s case concerns a recycling company called Browning-Ferris Industries in Milpitas, Calif., which used a temporary staffing agency called Leadpoint to provide workers. A Teamsters local tried to organize the employees, but didn’t just want to negotiate with Leadpoint — it wanted Browning-Ferris to qualify as a “joint employer," figuring that bargaining wouldn’t be effective unless it also included the larger company that exerts much control over workplace conditions.
A judge disagreed, and the Teamsters appealed. This time, the NLRB's general counsel sided with the union, recommending in an amicus brief that the board ignore a standard in place since the 1980s and instead apply a broader definition of what it means to be an employer.
The decision, following the general counsel’s move to issue complaints against McDonald’s as a joint employer along with its franchisees in the dozens of labor cases, sent the business community into a tizzy. And it’s how Steny Hoyer found himself in a Hilton Garden Inn in Waldorf eating cake and listening to franchisees explaining how they don’t want franchisers telling them what to do.
"Let’s say I have Susie, and she’s been a housekeeper for so many years, and she needs some time off,” said Purvi Panwala, who came representing the Asian American Hotel Owners Association. “Now it’s no longer my right to say ‘yes' or ‘no' to her. It’s someone who doesn’t know Susie or what her situation is."
That’s not necessarily so. The NLRB’s decisions only apply to workers organizing under the National Labor Relations Act, and wouldn’t determine the administration of benefits under other laws, like the Fair Labor Standards Act. And it’s likely that many franchisers and businesses that use subcontractors still wouldn’t qualify as joint employers even under the General Counsel’s proposed expanded definition.
“There’s been a lot of discussion around Uber, and how we are organizing businesses,” Hoyer told the franchisees. "In many respects, we have a franchisee-franchiser relationship converging on the large business, i.e. McDonald's, that has created tens of thousands of small businesses."
Hoyer sung the praises of small businesses, but also reminded them about the stagnant wages that have animated a fast food-based campaign to pay workers $15 an hour, as well as labor’s attempts to organize McDonald’s as a joint employer. He also questioned how independent franchisees really are from their corporate parents.
"It is a compromise of your ability to make that decision on your own,” Hoyer said. "You can’t sell the kind of french fries you think are the best. You sell the french fries that McDonald's tells you to sell.”
"I think that’s absolutely right,” countered Isaac Green, who owns several McDonald’s locations in Maryland. “But I signed up for that."