Why Entrepreneur Stands Against the PRO Act
The Protecting the Right to Organize Act could do lasting harm to the small-business and franchise community.
As a brand, Entrepreneur is not interested in politics. Our readers fall across the political spectrum, and since our founding in 1977, we’ve been singularly focused on supporting their goals of building great things and taking control of their lives. In fact, the one thing a divided America seems to agree upon is the positive power of entrepreneurship. Entrepreneurs create jobs and solutions, and we love both.
But today, for the first time, Entrepreneur is entering the world of advocacy on a single issue: It is to oppose a bill called the Protecting the Right to Organize Act, which is currently being considered in Congress, and which could do lasting harm to the small-business and franchise community.
We’re calling this advocacy the “Entrepreneur Campaign for Our Careers.” In a series of articles, we will explore the PRO Act in-depth, and we will raise the voices of entrepreneurs whose current and future income is squarely in the legislative crosshairs.
The PRO Act would “upend” and “dramatically restructure” the nearly 800,000 franchises nationwide, according to legal and industry experts. These experts also call the PRO Act a direct threat to many of the 59 million Americans who do independent contractor work—including freelancers and solopreneurs in hundreds of professions—and say it would also harm many of our nation’s 30 million small businesses that have mutually beneficial relationships with independent contractors.
The PRO Act would also radically alter the franchising industry, which Entrepreneur has championed for decades. It could make franchises harder to open and operate, and possibly even turn franchisees themselves into employees of their parent brand — in essence eliminating a path toward entrepreneurship for millions of people.
The PRO Act is a large and complicated bill, but we want to draw your attention to two issues in particular.
First, there is a provision called the ABC Test that would reclassify millions of independent contractors as employees of their clients for the purposes of labor law. According to a former chairman of the National Labor Relations Board, the PRO Act would likely make it a violation of federal law merely to continue existing business relationships with some independent contractors, even though 79% of independent contractors say they prefer the current relationships to the types of traditional employer-employee jobs the PRO Act favors. A former chairwoman of the National Labor Relations Board says that if the bill becomes law, years of regulatory and court wrangling would ensue.
Second, there is a provision called the “joint employer standard” that would complicate the relationship franchisors have with franchisees. According to the International Franchise Association, the PRO Act could result in a loss of equity among franchisees, limit the opportunities of future franchise owners, and upend the business model that franchise brands use all across the United States. The IFA’s senior vice president of government relations says the PRO Act could outright “end the franchise business model.”
As of this writing in summer 2021, the PRO Act has passed the U.S. House of Representatives and is just three co-sponsors shy of going to the floor of the U.S. Senate for a vote. President Biden has promised to sign the PRO Act into law if it gets to his desk, and is further urging Congress to include it in the American Jobs Plan that is currently being debated in Washington, D.C.
Leading proponents of the PRO Act are the AFL-CIO and the Democratic Socialists of America, both of which have launched extensive lobbying campaigns for the bill. The AFL-CIO calls the PRO Act the cornerstone of its Workers First Agenda and a “generational opportunity” to strengthen employee bargaining rights, stop the misclassification of employees as independent contractors (who cannot be unionized under current law) and repeal the right-to-work laws in more than two dozen states that say no person can be compelled to join a union or pay union dues as a condition of employment. AFL-CIO President Richard Trumka has said his organization will withhold campaign support from any lawmaker who opposes, derails or delays the bill. The Democratic Socialists of America call the PRO Act its highest national priority, and a way to legalize the kinds of strikes that it sees as “one of the most powerful tools workers have against capitalist bosses.” Additional PRO Act supporters include the Teamsters and the Service Employees International Union.
PRO Act opponents, in addition to the International Franchise Association, include the U.S. Chamber of Commerce, which calls the bill an “attack on independent contracting.” The Financial Services Institute says the PRO Act would “undermine thousands of thriving advisory practices across the country.” The National Retail Federation calls the PRO Act “the worst bill in Congress.” The Owner-Operator Independent Drivers Association says the PRO Act would force truckers “to abandon the traditional owner-operator model,” while the National Association of Manufacturers told Congress the bill is “completely unworkable for any employer, large or small.” The American Translators Association says the PRO Act threatens “continued access to language services by those with limited English proficiency.” Associated Builders and Contractors says the PRO Act is an outright “undemocratic bill.”
The Entrepreneur Campaign for Our Careers is our brand’s way of joining this widespread, rightful opposition to the PRO Act. We support all of the franchises, small business owners and solopreneurs who want to continue doing business legally and without interference, all across the nation.
As we publish more stories on this, we will add links to them here:
- This Legal Change Could "Severely Disrupt" Franchising. Learn About the PRO Act's Joint-Employer Standard
- What Is The ABC Test, And How Could It Harm Freelancers and Independent Contractors?
- Small Business Owners Fear the PRO Act's ABC Test
- Older Women Say PRO Act Unfairly Targets Them
- Parents and Caregivers Say PRO Act Would Harm Their Families
- Women Franchise Owners Fear the PRO Act
- What Lawmakers Don't Understand About the PRO Act, According to Franchise Owners
- Franchise Owners Say PRO Act Threatens Their American Dream
- How the PRO Act Threatens High-Skill Careers
Ryan Shea is CEO of Entrepreneur Media Inc., the parent company of Entrepreneur.com and Entrepreneur Magazine.