Chairman Chabot and Rep. Cuellar Introduce Legislation to Protect Small Business Trademarks

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Texas Border Business

WASHINGTON – House Small Business Committee Chairman Steve Chabot (R-OH) and Rep. Henry Cuellar (D-TX) recently introduced H.R. 6695, the Trademark Licensing Protection Act of 2018, which clarifies that licensing trademarks, and controlling or exercising those trademarks, do not create an employment relationship.

“In an effort to strengthen the protections of small businesses, especially franchisees, we must ensure that the millions of Americans they employ have the provisions and protections they need available to them without risking being considered a joint employer. It’s imperative that Congress restores a common-sense definition of an employer and provides certainty to America’s job creators,” said Chairman Steve Chabot.

“As a former small business owner, I understand that operating a small business is a fundamental pillar of the American dream, and the franchise business model is a great way for aspiring entrepreneurs to achieve this goal,” Rep. Henry Cuellar said. “We must ensure that our franchise owners receive fair treatment instead of confusing and arbitrary regulations that hinder them. The Trademark Licensing Protection Act will provide our nation’s small and franchise businesses the certainty necessary to grow and invest in the future of their employees. I thank Chairman Chabot for his work on this bill and I encourage my colleagues from both parties to support local businesses by supporting this legislation.”

“Franchise businesses are in a Catch-22,” said Matt Haller, IFA’s Senior Vice President of Government Relations & Public Affairs. “They are at once required to maintain standards and possibly liable for efforts to maintain them. This bill can clarify these competing standards to allow for franchise businesses to grow, train workers, and strengthen local economies. Franchisees and franchisors continue to face significant legal and compliance costs, resulting in a chilling effect on economic growth and support for existing franchisees since the joint employer uncertainty began. We applaud Chairman Chabot and Rep. Cuellar for continuing their leadership in seeking a solution to this issue for the franchise sector.”

Background: For more than 30 years, the National Labor Relations Board (NLRB) used one standard to determine whether two separate businesses were joint employers. In 2015, the Obama-era NLRB abandoned this standard. The ambiguity of the new standard threatens small businesses and entrepreneurs.

Chairman Chabot is an original cosponsor of H.R. 3441, the Save Local Business Act, to reverse the NLRB’s decision expanding the definition of the joint employer standard. H.R. 3441 passed the House on November 8, 2017.

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The Committee first held a roundtable in April 2015 on the issue. In March 2016, the Committee held a hearing titled, “Risky Business: Effects of New Joint Employer Standards for Small Firms” to examine the negative impact of the rule on small businesses. In May 2018, Code Ninjas LLC of Pearland, Texas, testified at a Small Business Committee hearing on behalf of the International Franchise Association.

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