Following on the heels of other states, Republicans in the Virginia House of Delegates have pre-filed a bill intended to override any action by the U.S. Department of Labor to make the employees of a franchisee also employees of the franchisor. The bill is House Bill No. 1394 for the January 2017 General Assembly legislative session. A very similar bill was vetoed by Governor Terry McAuliffe during the 2016 session. Virginia Republicans are hoping to gain the support of enough delegates to override a potential future veto.
Similar to other states, the legislation clarifies that an employee, for purposes of Virginia labor law, is not an employee of a franchisee’s franchisor. The following additional language proposed is added to the definition of “Employee”: “Notwithstanding any voluntary agreement entered into between the U.S. Department of Labor and a franchisee, neither a franchisee nor a franchisee’s employee shall be deemed to be an employee of the franchisee’s franchisor for any purpose to which this section applies.”
Delegate Chris Head, who introduced the legislation, states “Small businesses are the backbone and lifeblood of our economy. In recent years, President Obama’s National Labor Relations Board has sought to expand the influence of labor unions over small business franchises to the detriment of their hard working employees. This legislation protects employees from the overreaching federal government and overzealous labor unions. This bill is consistent with Virginia’s proud history as a right-to-work state.”
For more information, I recommend the following Bloomberg podcast interviewing Bloomberg BNA Capital Hill reporter Chris Opfer.