Kitchen Table Economics

PRO Act Series: Legislation Will Curtail Entrepreneurial Opportunities

Last week, the deceptively named Protecting the Right to Organize (PRO) Act received a hearing in front of the Senate HELP Committee. Supporters like to frame the legislation as a set of reforms that will empower workers. But in reality, union bosses will be benefiting at the expense of worker freedom and privacy.

The PRO Act will also specifically harm small businesses.

Among provisions, the bill would enshrine an Obama-era standard known as “joint employer”—which targets the franchise business model.

In essence, franchises—such as McDonald’s, Burger King, or Hardees restaurants—run and operate as independent small businesses. While they may borrow branding from the parent company, franchisees are largely responsible for hiring employees, distributing compensation, scheduling hours, and various other operational decisions of the business.

The changes proposed in the PRO Act would make the national firms more responsible for the independent small businesses that use their brands. As a result, franchisors would be much less likely to partner with entrepreneurs in local communities—drying up opportunities for small business ownership and the American Dream it helps so many realize.

The PRO Act is chock full of reforms that will restrict worker freedom and choice, as well as put the job creators that employ them in a chokehold. Solidifying Obama’s “joint employer” standard is only one example.