Opinion

Protecting the Right to Monopolize? What the PRO Act Means to Small Businesses

By James M. Wordsworth
February 5, 2020 at 5:00 am ET

The U.S. economy is thriving, and restaurants continue to be an industry of opportunity — whether it is providing a first job, a second chance after incarceration or a job change, a flexible family-friendly income or a stable and advancing career.  

But the opportunity millions seek in our industry is at risk because of a special interest bill soon expecting a vote in the House of Representatives.

Called the Protecting the Right to Organize Act, the bill’s changes would be devastating to my industry as well as to the nation’s thriving economy.

The PRO Act will eliminate secret ballot elections for unions. In its place, workers could be coerced by colleagues, activists and organizers to sign union pledges, and their home address, email, phone and shift information would be made available to labor unions, which can only lead to intimidation and harassment.

The bill will also supercede and erase right to work laws already enacted in 27 states. And, it will eliminate arbitration agreements in employment contracts — upending settled law consistently upheld since the 1920s.  

In addition, the PRO Act will cut opportunities for people to work independently through the gig economy, in second side jobs and consulting roles as well as erase the due process rights of many businesses in disputes, and wipe out attorney-client protections for those that seek advice on labor-related matters.

The PRO Act will delete protections from “secondary boycotts” that currently prevent unions from using their antitrust exemptions and immunity to target businesses for anti-competitive purposes other than organizing. And it would allow demonstrations regarding disputes to occur and impact a company’s suppliers, sources, partners and clients — even if the other entities are wholly unrelated to the dispute. 

And, the bill would set in law the controversial Browning-Ferris joint employer standard that threatens to cripple small and local businesses that are franchises. This expansive standard has forced brands to pull back education and training programs for their independently owned franchise employees for fear of liability exposure. 

The PRO Act erases a century of bipartisan consensus and balance reached by courts, regulators and lawmakers, and creates a new national model for the employer-employee workplace, crafted solely by special interests who represent 1 in 10 current American workers.

A nonprofit economic analysis group called American Action Forum recently noted that just the bill’s joint employer changes would impact 44 percent of private sector employers in the country, and lead to as much as $33 billion in lost annual output for the franchise segment of the industry alone. 

The group’s review of the bill also pointed out that the provision hobbling independent contractors would affect 8.5 percent of the nation’s gross domestic product and place additional upward pressure of as much as $12 billion on employers.

Economists have noted that from 2001-2015, the number of businesses increased 10.2 percent in right to work states and only 2.8 percent in states without the laws. 

And think of how it hurts employees and growing businesses that operate in a tougher litigation climate: workers don’t have access to training and education programs and franchisees have a tougher time recruiting, training and retaining team members.

U.S. restaurants today employ more than 15 million Americans at some 1 million different locations.  Ninety percent are small- and family-owned businesses with 50 or fewer employees. Restaurants are the leading employer for young workers and students and we employ more women and people of color in management and ownership roles than any other sector of the economy. Nearly every single one of these businesses operates on single-digit profit margins. 

Employees consistently report that they choose jobs in the restaurant because the pay is good, the opportunity is real, as is the diversity of work and flexibility. The median server pay in our industry is between $19-25 per hour nationwide.  

My industry is strong today, but there is no guarantee we could survive the costs, compliance and legal challenges sure to come if this bill becomes law. What hurts these businesses hurts their employers and their communities.

Supporters say this bill Protects the Right to Organize, but to me it looks more like Protecting the Right to Monopolize, regardless of the consequences and without regard for protections and balance that have governed employer-employee relations for a century. That’s a risk neither of us can afford.

 

Jim Wordsworth is the owner of J.R. Goodtimes, J.R. Stockyards Inn, J.R.’s Custom Catering, Colonial Caterers, Fairfax Hunt Club and Aquia Bay Marina. He has been in the Northern Virginia restaurant, food service and catering business for more than 40 years.

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