Protecting Missouri’s Small Businesses
Last week, the Missouri Senate sent several bills to the Missouri House of Representatives for consideration, including one of my legislative priorities.
Senate Bill 38, known as the Small Business Franchise Protection Act, clarifies the relationship between a franchisee and a franchisor. A franchisee is typically a small business operating under the brand name of the franchisor. The franchisor is a larger enterprise that focuses on product development, brand management and marketing. The key to franchising has always been that the franchisor and its franchisees are considered legally separate businesses, unless the franchisor exercised “direct and immediate” control over things like wages and employees. However, this changed in 2015 when the National Labor Relations Board replaced a clear, bright-line rule as to who is and who is not a “joint-employer” with a vague test that resulted in increased litigation. With this change, the board overturned decades of precedent and allowed small business owners who owned franchise businesses to be held jointly liable with a brand name franchisor.
Several states have already taken action to clarify this relationship, and I believe Missouri should do the same. I am happy to see the Missouri Senate pass SB 38, and I look forward to seeing it move through the Missouri House of Representatives in the coming weeks.
Click the video above to view Sen. Onder’s floor speech about the importance of SB 38.
As always, thank you for your interest in our work at the State Capitol. I look forward to discussing some of the important issues affecting our state and our community in my next report. It is an honor and a privilege to serve you in the Missouri Senate!
Very Sincerely,
Robert F. (Bob) Onder, Jr.