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REDEFINING EMPLOYER AND THE 

IMPACT ON ALABAMA’S WORKERS 

AND SMALL BUSINESS OWNERS 

FIELD HEARING 

BEFORE THE

SUBCOMMITTEE ON HEALTH, 

EMPLOYMENT, LABOR, AND PENSIONS 

COMMITTEE ON EDUCATION 

AND THE WORKFORCE 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED FOURTEENTH CONGRESS 

FIRST SESSION 

HEARING HELD IN MOBILE, ALABAMA, AUGUST 25, 2015 

Serial No. 114–25 

Printed for the use of the Committee on Education and the Workforce 

( 

Available via the World Wide Web: www.gpo.gov/fdsys/browse/ 

committee.action?chamber=house&committee=education 

or 

Committee address: http://edworkforce.house.gov 

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COMMITTEE ON EDUCATION AND THE WORKFORCE 

JOHN KLINE, Minnesota, Chairman 

Joe Wilson, South Carolina 

Virginia Foxx, North Carolina 

Duncan Hunter, California 

David P. Roe, Tennessee 

Glenn Thompson, Pennsylvania 

Tim Walberg, Michigan 

Matt Salmon, Arizona 

Brett Guthrie, Kentucky 

Todd Rokita, Indiana 

Lou Barletta, Pennsylvania 

Joseph J. Heck, Nevada 

Luke Messer, Indiana 

Bradley Byrne, Alabama 

David Brat, Virginia 

Buddy Carter, Georgia 

Michael D. Bishop, Michigan 

Glenn Grothman, Wisconsin 

Steve Russell, Oklahoma 

Carlos Curbelo, Florida 

Elise Stefanik, New York 

Rick Allen, Georgia 

Robert C. ‘‘Bobby’’ Scott, Virginia 

Ranking Member 

Rube ́n Hinojosa, Texas 

Susan A. Davis, California 

Rau ́l M. Grijalva, Arizona 

Joe Courtney, Connecticut 

Marcia L. Fudge, Ohio 

Jared Polis, Colorado 

Gregorio Kilili Camacho Sablan, 

Northern Mariana Islands 

Frederica S. Wilson, Florida 

Suzanne Bonamici, Oregon 

Mark Pocan, Wisconsin 

Mark Takano, California 

Hakeem S. Jeffries, New York 

Katherine M. Clark, Massachusetts 

Alma S. Adams, North Carolina 

Mark DeSaulnier, California 

Juliane Sullivan, Staff Director 

Denise Forte, Minority Staff Director 

SUBCOMMITTEE ON HEALTH, EMPLOYMENT, LABOR, AND PENSIONS 

DAVID P. ROE, Tennessee, Chairman 

Joe Wilson, South Carolina 

Virginia Foxx, North Carolina 

Tim Walberg, Michigan 

Matt Salmon, Arizona 

Brett Guthrie, Kentucky 

Lou Barletta, Pennsylvania 

Joseph J. Heck, Nevada 

Luke Messer, Indiana 

Bradley Byrne, Alabama 

Buddy Carter, Georgia 

Glenn Grothman, Wisconsin 

Rick Allen, Georgia 

Jared Polis, Colorado, 

Ranking Member 

Joe Courtney, Connecticut 

Mark Pocan, Wisconsin 

Rube ́n Hinojosa, Texas 

Gregorio Kilili Camacho Sablan, 

Northern Mariana Islands 

Frederica S. Wilson, Florida 

Suzanne Bonamici, Oregon 

Mark Takano, California 

Hakeem S. Jeffries, New York 

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C O N T E N T S 

Page 

Hearing held on August 25, 2015 ........................................................................... 1 

Statement of Members: 

Bradley, Hon. Bradley, a Representative in Congress from the state of 

Alabama ......................................................................................................... 3 

Prepared statement of ............................................................................... 5 

Roe, Hon. David P., Chairman, Subcommittee on Health, Employment, 

Labor, and Pensions ..................................................................................... 1 

Prepared statement of ............................................................................... 2 

Statement of Witnesses: 

Carey, Colonel Steve, (USAF, RET.), Owner/Operator, CertaPro Painters 

of Mobile and Baldwin Counties, Daphne, AL ........................................... 15 

Prepared statement of ............................................................................... 18 

Debruge, Mr. Marcel L., Labor Attorney, Burr & Forman LLP, Birmingham, AL ................................................................................................. 6 

Prepared statement of ............................................................................... 9 

Holmes, Mr. Chris, Area Representative, Firehouse Subs, and CEO, CLH 

Development Holdings, Inc., Tallahassee, FL ............................................ 23 

Prepared statement of ............................................................................... 25 

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REDEFINING ‘EMPLOYER’ AND THE IMPACT 

ON ALABAMA’S WORKERS AND 

SMALL BUSINESS OWNERS 

Tuesday, August 25, 2015 

House of Representatives 

Subcommittee on 

Health, Employment, Labor, and Pensions 

Committee on Education and the Workforce 

Washington, D.C. 

The Subcommittee met, pursuant to call, at 10:02 a.m., at the 

University of South Alabama, Alabama Student Center Ballroom, 

350 Campus Drive, Mobile, Alabama, David P. Roe [chairman of 

the subcommittee] presiding. 

Present: Representatives Roe and Byrne. 

Staff present: Janelle Belland, Coalitions and Members Services 

Coordinator; Christie Herman, Professional Staff Member; Tyler 

Hernandez, Press Secretary; John Martin, Professional Staff Member; and Eunice Ikene, Minority Labor Policy Associate. 

Chairman ROE. A quorum being present, the Subcommittee on 

Health, Employment, Labor, and Pensions will come to order. I 

first would like to recognize myself for opening remarks, this morning. 

Good morning, everyone. We welcome today’s hearing. I first 

would like to take a moment to thank our witnesses for joining us. 

I would also like to thank the staff here at the University of South 

Alabama for their hospitality, and also to our security that is here 

today. Thank you for being here. 

I am happy to be here, and I am thankful for the opportunity to 

get out of Washington and to hear directly from you about an issue 

that could have significant consequences for a lot of people in Alabama and across this country. That issue is an effort by a handful 

of unelected bureaucrats in Washington who are trying to fundamentally change the way franchise businesses operate. 

This is a complicated issue, and before I get into what the Board 

is trying to do, I want to say a little bit about what is at stake. 

More than 780,000 franchise businesses currently operate in the 

United States, employing nearly 9 million workers. These small 

businesses, which are independently owned and operated, have 

helped create jobs and allowed countless individuals to realize the 

dream of owning their own business. Franchise businesses are vital 

to countless communities and working families. 

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A federal agency known as the National Labor Relations Board 

is trying to upend the franchise model by changing what it means 

to be an employer. The NLRB’s general counsel is pushing the 

Agency to blur the lines of responsibility between a franchisee— 

that is the person who owns and operates the business locally—and 

the franchisor—the entity that enables a small business owner to 

use an established brand to sell certain goods or services in a particular area. 

This effort would make both ‘‘joint employers’’ and give them 

equal responsibility for decisions affecting the day-to-day operations of the business: decisions like hiring, training, wages, and 

work schedules. What will this look like in the real world? 

For starters, these small business owners, these franchisees, will 

have less freedom to operate their own businesses. If a franchisor 

is suddenly responsible for decisions affecting employees at each individual franchise, they will naturally assert more control over 

those decisions. That just makes common sense. More control for 

the franchisor, of course, means less control for the franchisee—the 

local business owner. And suddenly that small business owner is 

no longer making decisions about the way his or her business is 

run. Individuals like Mr. Holmes and Colonel Carey, who have 

worked hard to start their own businesses, may no longer decide 

who their employees are, when they work, how they are trained, 

hours they work. 

But the consequences of expanding the joint employer standard 

are not just operational. Such a move will also lead to higher consumer costs, fewer small businesses, lost jobs, more litigation, 

fewer opportunities for individuals to pursue the American Dream, 

just the opposite of what we need to be doing in this country right 

now. 

To make matters worse, the NLRB might extend this flawed approach to businesses outside the franchise industry, like contractors and subcontractors. A change like that would disrupt countless 

businesses here in Mobile and all along the Gulf Coast and across 

this country. It is not easy starting a small business, let alone 

keeping a small business afloat in this economy. 

The last thing we need is an unelected and unaccountable board 

of bureaucrats to make it more difficult to pursue the American 

Dream. By sharing your stories and concerns today, you are helping us to fight back against this misguided scheme and ensure policies are in place that promote, instead of discourage, economic 

growth and development. 

I want to thank our witnesses again for being here today and 

sharing their personal experiences with the Committee. I look forward to hearing from each of you. 

Prepared Statement of Hon. David P. Roe, Chairman, Subcommittee on 

Health, Employment, Labor, and Pensions 

Good morning, everyone, and welcome to today’s hearing. I’d first like to take a 

moment to thank our witnesses for joining us. I would also like to thank the staff 

here at the University of South Alabama for their hospitality. 

I’m happy to be here and thankful for the opportunity to get out of Washington 

and hear directly from all of you about an issue that could have significant consequences for a lot of people in Alabama and across the country. That issue is an 

effort by a handful of unelected bureaucrats in Washington that are trying to fundamentally change the way franchise businesses operate. 

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3 

This is a complicated issue, but before I get into what the board is trying to do, 

I want to say a little bit about what’s at stake. More than 780,000 franchise businesses currently operate in the United States, employing nearly nine million workers. These small businesses, which are independently owned and managed, have 

helped create jobs and have allowed countless individuals to realize the dream of 

owning a business. Franchise businesses are vital to countless communities and 

working families. 

A federal agency, known as the National Labor Relations Board, is trying to 

upend the franchise model by changing what it means to be an employer. The 

NLRB’s general counsel is pushing the agency to blur the lines of responsibility between a franchisee – the person who owns and operates the business locally – and 

a franchisor – the entity that enables the small business owner to use an established brand to sell certain goods or services in a particular area. This effort would 

make both ‘‘joint employers’’ and give them equal responsibility for decisions affecting the day-to-day operations of the business – decisions like hiring, training, wages, 

and work schedules. What would this look like in the real world? 

For starters, these small business owners, these franchisees, will have less freedom to operate their own businesses. If a franchisor is suddenly responsible for decisions affecting employees at each individual franchise, they will naturally assert 

more control over those decisions. More control for the franchisor, of course, means 

less control for the franchisee, and suddenly, that small business owner is no longer 

making decisions about the way his or her business is run. Individuals like Colonel 

Carey and Mr. Holmes who have worked hard to start their own businesses may 

no longer decide who their employees are, when they work, and how they are 

trained. 

But the consequences of expanding the joint employer standard aren’t just operational. Such a move will also lead to higher consumer costs, fewer small businesses, lost jobs, more litigation, and fewer opportunities for individuals to pursue 

the American Dream. To make matters worse, the NLRB might extend this flawed 

approach to businesses outside the franchise industry, like contractors and subcontractors. A change like that would disrupt countless businesses here in Mobile, 

all along the Gulf Coast, and across the country. 

It’s not easy starting a small business, let alone keeping a small business afloat 

in this economy. The last thing we need is for an unelected and unaccountable board 

of bureaucrats to make it more difficult to pursue the American Dream. By sharing 

your stories and concerns today, you are helping us to fight back against this misguided scheme and ensure policies are in place that promote – instead of discourage 

– economic growth and job creation. 

I want to thank our witnesses again for being with us today and sharing their 

personal experiences with the committee. I look forward to hearing from each of 

you, so I’m going to yield to my distinguished colleague and our host today, Congressman Bradley Byrne, for his opening remarks. 

I will now take this opportunity to recognize our host today, Congressman Byrne, for his opening remarks. 

Mr. BYRNE. Thank you, Mr. Chairman. I am pleased to welcome 

you and our witnesses to Alabama’s 1st Congressional District to 

speak about the importance of the NLRB’s interpretation of ‘‘joint 

employer,’’ which will impact, as you said, thousands of business 

owners and their employees in my district and throughout the 

country. 

I will say, Mr. Chairman, I know that you are a physician by 

training and background, but as a former labor and employment 

attorney after watching you the last year and a half on this subcommittee, I think you missed your calling. You could be a labor 

and employment attorney. You have mastered these issues wonderfully. And I really appreciate the extent to which you have poured 

yourself into understanding not just the technical application, but 

the real world experience that we have here. 

I also want to welcome and thank the committee staff. I know 

you all have worked very hard to make this work. You are outside 

of Washington, so thank you for doing that. And, of course, the 

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University of South Alabama, I could not be prouder of this university. This is my university. It is in my district, and you all have 

done a great job today. 

I want to thank our witnesses, two of whom I know very well. 

I appreciate you being here. We have a gentleman who has driven 

a long way from Tallahassee to be here. I know how long that road 

is on I–10. Thank you for coming. 

Mr. HOLMES. My pleasure. 

Mr. BYRNE. And we want to thank all the members of the public 

for being here. 

Committee hearings have always provided transparency and a 

way for the public to hear their representatives debate important 

issues. Field hearings, however, provide a much more tangible way 

for our constituents, like the people of South Alabama, to be directly involved in the process. Issues like the NLRB’s definition of 

a ‘‘joint employer’’ under national labor law affects Main Street 

businesses in a real way, and it is imperative for Congress to come 

directly to the people to discuss the impact these decisions will 

have on their everyday lives. 

As Chairman Roe explained, the NLRB is tasked with determining whether two businesses may be considered joint employers 

under the National Labor Relations Act. This definition is then 

used by the NLRB to mediate labor disputes and to determine the 

rights and protections afforded to employees under national labor 

laws. 

We, as a committee, have discussed joint employer status before 

in the Browning-Ferris v. NLRB case. It was during that discussion 

that the franchise-joint employer relationship was brought up. 

Now, as a former management attorney who has worked in this 

field for over 30 years, it truly boggles my mind that we are even 

talking about redefining the joint employer relationship in the franchise industry. 

The franchise model’s way of doing business has been around for 

decades, and it represents a win-win for franchisors, franchisees, 

and, most importantly, franchisee employees. Franchisees get the 

gratification of charting their own course, owning their own business, while franchisors benefit from the licensing of their product. 

As a franchise expands, more opportunities are created for both the 

employees of the franchise and for the franchisee. 

During our last hearing, my colleagues on the other side of the 

aisle could not understand why the franchise industry was worried 

about their status as independent business owners and why 

franchisors were worried about what this would do to their business model. The answer is simple: expanding the definition of ‘‘joint 

employer’’ increases the liability of doing business. It changes the 

franchisor/franchisee relationship. It disrupts the flow of commerce 

and puts long-term job growth in jeopardy. These proposed changes 

will directly impact products and services that people have come to 

depend on across the United States. 

I look forward to hearing from our witnesses about the impacts 

this change will have for business owners and their employees. 

Thank you, Mr. Chairman, and once again we welcome everybody 

to the 1st District of Alabama. 

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Prepared Statement of Hon. Bradley Byrne, a Representative in Congress 

from the state of Alabama 

I am pleased to welcome Chairman Roe and our witnesses to Alabama’s First 

Congressional District to speak about the importance of the National Labor Relations Board’s interpretation of a ‘‘joint employer’’, which will impact thousands of 

business owners and their employees in my district and throughout the country. 

I would like to thank Chairman Roe, Committee Staff, the University of South 

Alabama, as well as our witnesses and members of the public here today for being 

a part of this hearing. 

Committee hearings have always provided transparency and a way for the public 

to hear their Representatives debate important issues. Field hearings, however, provide a much more tangible way for our constituents, like the people of South Alabama, to be directly involved in the process. 

Issues like the National Labor Relations Board’s definition of a ‘‘joint employer’’ 

under national labor law affect Main Street businesses in a real way and it is imperative for Congress to come directly to the people to discuss the impact these decisions will have on their everyday lives. 

As Chairman Roe explained, the NLRB is tasked with determining whether two 

businesses may be considered ‘‘joint employers’’ under the National Labor Relations 

Act. This definition is then used by the NLRB to mediate labor disputes and to determine the rights and protections afforded to employees under national labor laws. 

We as a Committee have discussed joint employer status before in the Browning 

Ferris v. NLRB case, and it was during that discussion that the franchise joint employer relationship was brought up. Now as a former management attorney who has 

worked in the field for 30 years, it truly boggles my mind that we are even talking 

about redefining a joint employer relationship in the franchise industry. 

The franchise model, as a way of doing business, has been around for decades and 

represents a win-win for franchisors, franchisees, and franchise employees. 

Franchisees get the gratification of charting their own course and owning their own 

business while franchisors benefit from the licensing of their product. As the franchise expands, more 

opportunities are created for both the employees of the franchise and for the 

franchisee. 

During our last hearing, my colleagues on the other side of the aisle couldn’t understand why the franchise industry was worried about their status as independent 

business owners and why franchisors were worried about what this would do to 

their business model. The answer is simple – expanding the definition of ‘‘joint employer’’ increases the liability of doing business, changes the franchisor-franchisee 

relationship, disrupts the flow of commerce, and puts long-term job growth in jeopardy. 

These proposed changes will directly impact products and services that people 

have come to depend on across the United States. I look forward to hearing from 

our witnesses about the impacts this change will have for business owners and their 

employees. 

Chairman ROE. Thank you very much for yielding. And pursuant 

to Committee Rule 7(c), all subcommittee members will be permitted to submit written statements to be included in the permanent hearing record. And without objection, the hearing record will 

remain open for 14 days to allow statements, questions for the 

record, and other extraneous materials referenced during the hearing to be submitted into the official hearing record. 

It is now my distinct pleasure to introduce our distinguished witnesses. First, Mr. Marcel Debruge is Chair of the Labor and Employment Practice Group at Burr & Forman LLP in Birmingham, 

Alabama. He focuses his practice on representing management in 

all aspects of labor and employment law, including litigation before 

Federal and State courts and administrative agencies. Welcome, 

Mr. Debruge. 

Colonel Steve Carey owns and operates CertaPro Painters of Mobile and Baldwin Counties in Daphne, Alabama, an interior and exterior house painting contractor, which has won an A-plus rating 

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from the Better Business Bureau. Colonel Carey, retired, is a Commandant at the College of Aerospace Doctrine Research and Education, and the Vice Commander at Air Force Doctrine Center, Air 

University, Maxwell Air Force Base, Alabama. Sir, thank you for 

your service to our great Nation. 

And Mr. Chris Holmes is CEO of CLH Development, Inc. of Tallahassee, Florida, since its incorporation in 2001. Mr. Holmes is an 

area representative for Firehouse Subs in Southeast Alabama, 

South Georgia, and North Florida. He has sold the rights to five 

Firehouse Sub restaurants in Southeast Alabama, 15 Firehouse 

Sub restaurants in South Georgia, and 10 Firehouse Sub restaurants in North Florida. Mr. Holmes also owns and operates one 

Firehouse Sub restaurant in Tallahassee, Florida. 

And I might add for the record that we did invite members from 

both sides of the aisle to be here, both Democrats and Republicans. 

Democratic witnesses were also invited, but declined. 

Gentlemen, I will now ask you to stand and raise your right 

hand. 

Do you solemnly swear or affirm that the testimony you are 

about to give will be the truth, the whole truth, and nothing but 

the truth? 

[A chorus of ayes.] 

Chairman ROE. Let the record reflect the witnesses answered in 

the affirmative, and you may take your seat. Before I recognize you 

for your testimony, let me briefly explain our lighting system. You 

have five minutes to present your testimony. When you begin, the 

light in front of you will turn green. With one minute left it will 

turn amber, and when your time has expired, the light will turn 

red. And at that point I will ask you to wrap up your remarks. I 

will not certainly cut you off mid-sentence. Each member will also 

be given five minutes, and we will probably have more than one 

round of questioning. 

And just before, Mr. Debruge, you are recognized, this is an official hearing of the United States Congress. And one of the things 

I like about field hearings is it does something I wish we would do 

more often, which is to bring the Congress to the people, which is 

what we are doing here, as opposed to the people going to the Congress. This is the people’s House, the House of Representatives, 

and we are here to learn what is on your mind. 

And, again, Mr. Debruge, you are recognized for five minutes. 

TESTIMONY OF MARCEL L. DEBRUGE, LABOR ATTORNEY, 

BURR & FORMAN LLP, BIRMINGHAM, ALABAMA 

Mr. DEBRUGE. Thank you, Chairman Roe, Congressman Byrne. 

My name is Marcel Debruge, and I am a partner at Burr & 

Forman LLP in Birmingham, Alabama, and have been practicing 

labor and employment law since 1991. For many years, my practice 

has focused on representing clients in the manufacturing sector, 

primarily in the State of Alabama, but also throughout the United 

States. I represent dozens of manufacturing operations in our 

State, which employ tens of thousands of Alabamians, and I have 

personally visited the vast majority of major Alabama manufacturing operations. 

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Our State has had a resurgence of manufacturing jobs in the 

past 25 years. By the mid-1990s, Alabama had seen the decline of 

its older unionized industries, such as steel, textiles, chemicals, and 

paper. Our State understood that it had to attract new business to 

create manufacturing jobs for people with a high school education, 

and limited work experience and job skills. 

Our State, like many other States in the Southeast, therefore invested heavily to recruit global automotive, steel, and aerospace 

companies, among many others. In many cases, these marquee 

companies have attracted dozens of suppliers who build factories in 

Alabama as well. The numbers tell the story. 

In 1993, not a single automobile was made in Alabama. Today 

Alabama employs over 35,000 men and women in automotive manufacturing, and has produced more than 8.2 million cars and light 

trucks. Alabama earns the number two spot on Business Facilities 

Magazine’s Annual State Automotive Manufacturing Strength 

Ranking. This ranking emphasizes growth potential as well as production figures and industry trends. 

Alabama ranks fifth in the U.S. in car and light truck production. Alabama auto makers produced more than 918,000 cars and 

light trucks in 2013. Ten passenger vehicle models are built by Alabama manufacturers. Alabama’s export dollars for vehicles and vehicle parts totaled nearly $7.1 billion for 2013. And finally, 1/4th 

of all passenger vehicles built in the South are made in Alabama. 

Alabama’s political leaders, both Republican and Democratic, recognized that the old way of doing business was not working, so 

they put the State’s resources behind the recruitment of these new 

manufacturing jobs. Unlike in the old days, these post-1990s manufacturing jobs are primarily, but certainly not exclusively, in plants 

that are foreign owned, union free, and staffed with a variety of 

categories of employees, such as regular full-time, regular parttime, temporary, and contract labor. 

These new plants are modern, efficient, safe, clean, flexible, and 

capable of achieving the highest quality in the world. They pay 

competitive wages based on the nature of the business and the location of each facility. Controlling costs is vital to their survival because they are forced to compete with overseas operations in Mexico, Central America, and China. For example, automotive supplier 

wages in Mexico are between $1 and $2 per hour. These same 

types of supplier plants in Alabama pay 10 to 20 times more than 

those Mexican wages. 

On March 17, 2015, in the Wall Street Journal, an article appeared titled, ‘‘Why Automakers are Building New Factories in 

Mexico, Not the U.S.’’ And that article states: ‘‘It has been more 

than six years since an automaker picked the U.S. South for a 

green field plant, meaning one where the company did not already 

have facilities. Such projects have all gone to Mexico lately.’’ Flexibility is critical to Alabama’s manufacturing facilities. It means 

having the right number of trained workers and being able to classify those workers in a way that makes economic sense. 

In my experience, most companies rely on a mix of regular, temporary, and contract labor to operate. It is common to see a facility 

utilize regular full-time associates, regular part-time associates, 

temporary associates, and on-site contractors handling tasks such 

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as shipping and receiving, sorting, quality control, maintenance, 

and logistics. 

A one-size-fits-all approach in which virtually everyone is performing some task on site as either an employee or a joint employee is simply not realistic, and, in my judgment, one, will cause 

fewer new plants to locate here, two, will put at risk the jobs we 

currently have, three, will discourage existing companies from expanding in the U.S., and, four, will give foreign manufacturing operations an even bigger cost advantage than they already have. 

Expanding the definition of ‘‘joint employer’’ and then forcing 

these newly-defined joint employers to negotiate together with a 

bargaining unit comprised of people who work for different employers is not the way to promote flexibility, contain costs, and increase 

competitiveness. It will result in more litigation, more labor unrest, 

more strikes, more picketing, more union organizing drives, and ultimately fewer jobs. 

Thank you. 

[The statement of Mr. Debruge follows:] 

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Chairman ROE. Thank you. Colonel Carey, you are recognized for 

five minutes. 

TESTIMONY OF COLONEL STEVE CAREY (USAF, RET.), OWNER/ 

OPERATOR, CERTAPRO PAINTERS OF MOBILE AND BALDWIN COUNTIES, DAPHNE, ALABAMA 

Mr. CAREY. Yes, sir. Chairman Roe, Congressman Byrne, distinguished members, it really is a pleasure to be here and testify before you today. I am the owner of CertaPro Painters of Mobile and 

Baldwin Counties. We are a licensed, bonded, and insured residential and commercial painting company. 

I appear before you on behalf of the Coalition to Save Local Businesses and the International Franchise Association. I, like my fellow witnesses here, am extremely troubled about the National 

Labor Relations Board’s expanded application of ‘‘joint employer,’’ 

and the very real threat to my business that a new joint employer 

standard brings. 

As a small business owner, entrepreneur, and franchisee, I believe that the NLRB is doing Congress’ job in making a new law 

by inventing a new definition. This new standard seems to ignore 

all the precedent in federal labor law and threatens the livelihoods 

of small business owners like myself. 

As background, the Coalition to Save Local Businesses is a diverse group of locally owned and independent small businesses, associations, and organizations. This group is dedicated to protecting 

and strengthening all sectors of small business, which are now 

under attack by the NLRB. 

My wife, Charlotte, and my three children, Clark, Camille, and 

John Charles, and I moved to Mobile seven years ago after I retired 

from my short 30-year career in the Air Force. I am a combat veteran, flew F–15s and F–16s, squadron commander, instructor pilot, 

and mission commander. My leadership position was at Maxwell 

Air Force Base at the College of Doctrine and Research. 

When I retired, I wanted to settle near a close-knit community. 

I had drug my wife around the world for some 15 years, and she 

said, ‘‘We are going back to Alabama.’’ So we settled down here, 

and I decided to start a career as a small businessman. I 

transitioned to a successful career in franchising. I want to highlight the fact that the International Franchise Association’s 

VetFran initiative has been very helpful to veterans like myself. In 

fact, over 75,000 veterans and their spouses have become franchise 

business owners and employees in various franchise industries. 

During my Air Force career, I developed the characteristics and 

honed the skills necessary to run what I consider a world-class organization. I transferred those skills into my second life as a small 

businessman and franchisee. The skills include things like leadership, professionalism, integrity, and attention to detail. That is how 

I could walk away with an A-plus rating from the Better Business 

Bureau, how I can put my face on the side of my truck and tell 

people I bring certainty and integrity into your home. I generated 

a brand for the painting industry in southern Alabama that is unmatched, and I am proud of that. And I can look back at my Air 

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16 

ing men and women have carried through to me now as a small 

businessman. 

Locally, I serve on the executive board for two chambers, Eastern 

Shore and Mobile. I am director of the Foundation for Workforce 

Development, and vice chair of a student group called the Student 

Training and Exploration Program. I also serve in Mobile as the 

vice chair for Military Affairs where I help build public awareness 

and promote veteran issues with local businesses, hosting a military appreciation luncheon at our local USS Alabama battleship. I 

was recently selected to serve on the Alabama Red Cross Board of 

Directors, and I now have a state appointment to the Alabama 

Aviation Hall of Fame Directors Board. 

I am a strong supporter of education for our youth, and as president of our South Alabama Air Force Association, we go a long way 

to improve science, technology, engineering, and math for our 

young men and women, and that carries right through here to our 

Air Force ROTC detachments at the University of South Alabama. 

I was asked why did my wife and I pursue a career in franchising. When I retired from the Air Force, we spent a lot of time 

deciding what would be best for my family. I had a business bug. 

I had an MBA. We explored the idea of purchasing an existing 

business and considered both independent businesses and franchises themselves. We decided that the franchise opportunity would 

be the best fit for our family because it allowed me to run an independent business, but still be able to work with a proven brand 

and a solid business model. 

I purchased CertaPro Painters as a franchise in 2008, probably 

not the best time in the course of business history to buy a franchise. But immediately I was profitable and ran a smart, lean, good 

business operation. It was a good fit for me because it was a service 

business based on working with people, and getting out of the office, and spending time with homeowners as well as commercial clients that had a particular need. 

CertaPro offers a 10 percent discount to all franchisees that are 

veterans like myself, and when I decided to buy that franchise, 

they put out their hand and said we thank you for your service, 

we want you to be part of our team. And that is exactly what I felt 

like when I joined and bought my franchise from CertaPro. 

The agreement, in my view, is fairly simple. It is pretty thin, but 

it is very detailed and very precise. What they do is they help me 

with brand materials, including trademarks and logos, estimating 

and project management tools, software, and some marketing. But 

in all other aspects, I operate as an independent stand alone business, just like any non-franchise small business owner. I have the 

autonomy to run my business as I see fit. I make the decisions 

every day, and that is what I bought into, not to be told what to 

do. 

Much like my time as a commander in the military when I sent 

young men out flying F–15s or F–16s in harm’s way, I did not expect myself to sit back at the headquarters there and pass to them 

decisions and make radio calls that they would then have to act on. 

I wanted them to be independent. That is the way I operate my 

business. I want to be independent. I want to lead my business, 

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make decisions, and grow my business so that I have a legacy for 

myself and for my family. 

Small businesses like mine play a valuable role in our community, not only in opportunities, but also in the growth of the local 

economy. We provide entrepreneurial opportunities for people looking to create new jobs and grow. Small business is bracing for the 

NLRB’s decision for the forthcoming Browning-Ferris case, a decision that some expect may come as early as next week. I am not 

a lawyer, but there appears to be little suspense about where the 

NLRB is headed, and I want to be sure that we make the right decisions. 

Fortunately, after I retired from the Air Force, the opportunity 

for small business presented itself with the franchise of CertaPro 

Painters. I probably would not have signed up to take on the work 

and the hard dedication it takes to run a business had I been handcuffed with a change in definitions. 

Mr. Chairman, I strongly urge this committee to consider the 

devastating impact on small business owners that this may have. 

I ask you to do what Congress can to ensure that the NLRB cannot 

take away the livelihoods of small business owners like myself. 

I thank you for this opportunity. 

[The statement of Colonel Carey follows:] 

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Chairman ROE. Thank you, Mr. Carey. 

Mr. Holmes, you are recognized for five minutes. 

TESTIMONY OF CHRIS HOLMES, AREA REPRESENTATIVE, 

FIREHOUSE SUBS, AND CEO, CLH DEVELOPMENT HOLDINGS, INC., TALLAHASSEE, FLORIDA 

Mr. HOLMES. Thank you. Chairman Roe, Congressman Byrne, 

thank you for the opportunity to testify before you today. My name 

is Chris Holmes. I am the area representative for Firehouse Subs 

in Northern Florida, South Georgia, and Southeast Alabama. I currently own and operate one Firehouse Subs restaurant in Tallahassee, Florida, and led the development of 30 other Firehouse Subs 

restaurants in this region of the country. 

I am here today to discuss my concerns regarding the National 

Labor Relations Board’s attempt to expand the definition of what 

constitutes a joint employer, and the very real threat of that effort 

to not only my business, but thousands of small businesses like 

mine throughout the country. 

Changing the definition will have a significant impact on another 

definition as well, the definition of the American Dream. As a small 

business owner and an entrepreneur who started off my career as 

a 16-year-old kid working at a local McDonald’s, I embody that definition every day. From the first job, I pursued a career in the restaurant business, working my way up the ladder of the industry 

from dishwasher, to manager, to district manager, and now to a 

business owner, who has the privilege of testifying before the 

United States Congress. What an amazing journey, but yet at the 

same time, what a typically American one. 

I am here today because I believe that dream may be in jeopardy. Our story is not unlike millions of other small business owners. My wife and I decided that after numerous roles in the industry, we wanted the independence of owning and operating our own 

small business and the ability to take control of our family’s financial future. As we looked for those opportunities, we became associated with Firehouse Subs, and for the first time were exposed to 

the franchise business model. 

For us, this was the perfect scenario. We could run our own independent business, while at the same time participating with an exciting and growing brand that customers clearly loved. The ability 

to franchise was our entry point into small business ownership. So 

we did what so many other entrepreneurs have done. We took out 

second mortgages. We sold everything that was not nailed down. 

We maxed out credit cards and even borrowed money from our parents. The franchise model opened the door for ourselves and millions of others just like us to pursue small business ownership. 

Without it, we would never have been able to realize the dream. 

Franchising is an often misunderstood, but actually a very simple and effective model. My arrangement with Firehouse of America is very straightforward. They provide the brand materials, including the trademarks and logos, recipes, significant marketing 

support, and countless other resources to maintain consistency 

across the brand. But in all other respects, I operate as an independent stand-alone business, just like a non-franchise small business owner would. 

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I have the autonomy to run my business as I see fit, including 

on matters such as staffing, labor costs, vendor relationships, 

among others. I do all the hiring, all the firing, and I set the wage 

rates for my business. Firehouse of America has no role in this. It 

is my business. 

I believe, however, the new joint employer standard, if allowed 

to go forward, will irrevocably change that model. If the larger 

franchisor is now liable for the employment decisions of their service providers, franchisees, or other contractors, then they would 

have no choice but to be completely involved in those decision making processes. I will have lost my autonomy, my independence, and 

potentially my investment. 

Instead of being a small businessman, I would become virtually 

overnight a manager for a large company. While I have played that 

role before and certainly do not begrudge that, it is not what I aspire to. I took the risk to start and run a small business, but now 

I find myself in the position of potentially having an unelected 

board in Washington, D.C., just unilaterally determine that my 

American Dream is over. Could that really be possible? 

For us, our business has been the site of a family reunion that 

has lasted close to 20 years, where our children, our brothers and 

sisters, our nieces and nephews, and even our parents have all 

worked in the restaurant, collectively building the security of multiple generations of our household. And it is a place where the careers of hundreds of young people began their own journeys that 

would have never happened if it were not our business and our opportunity to pursue our dream. 

While it is quite clear that the NLRB wants to negatively impact 

the business model of some of America’s largest companies through 

this action, it is ironic that what they will actually be doing is hurting America’s smallest businesses. The real effect will be small 

franchisee operators essentially losing their business to an often 

larger franchisor, making the large company larger and the 

franchisee extinct. If your goal is to push small business operators 

to the curb and stifle investment into new startup businesses, you 

could not come up with a more effective tool than this joint employer decision. 

Mr. Chairman, Congressman Byrne, it is my hope that you and 

your committee will do everything in your power to ensure that the 

NLRB is not able to finalize this decision. My small business and 

the security of my family are riding on it. Thank you again for the 

opportunity to share my concerns with you. 

[The statement of Mr. Holmes follows:] 

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Chairman ROE. Mr. Holmes, thank you very much. I will now 

recognize myself for five minutes. And, Mr. Holmes, when I was 16, 

actually 15, at a scout camp, I washed 350 dishes three times a 

day, and I determined that I did not want to be in the restaurant 

business after that summer— 

[Laughter.] 

Mr. HOLMES. I understand. 

Chairman ROE.—for the rest of my life, although I did spend the 

next six years running the dining hall, but I got that all out of my 

system as a young person. 

I think the three of your testimonies have really made me angry 

because what I hear is I hear people who went out, took the risk, 

and invested their life savings into a business now to maybe have 

it taken away from them by not five, but three unelected bureaucrats in Washington, D.C., who think they know better about how 

to run your business than you do. 

And my question is to you all to start with, what do you all see, 

and maybe, Mr. Debruge, you could start this. What is the motivation of the NLRB because their purpose, I mean, it is very simply, 

clearly written what their purpose is. And I always thought, you 

know, I am an old basketball player, and I thought when I went 

on the court there were a set of referees out there that gave their 

best estimate about what the rules are. You knew what they were, 

and you played by them. This NLRB is not doing that, and they 

have definitely shifted it in favor of the unions. And I just wonder 

what you think their motivation is. It cannot be to help these gentlemen right here because they clearly said it is not helping them. 

Mr. DEBRUGE. Well, from my perspective, the motivation is pretty obvious: it is to increase the number of people who pay union 

dues. The current leadership, the current board, is focused almost 

exclusively on how to expand union membership in the private sector. Today, since World War II, unions have dropped from roughly 

40 percent of the private sector workforce to—I think the number 

is—6.6 percent today. They are almost an afterthought in most industries, especially anything built in the last 25, 30 years. 

The Wagner Act was enacted in 1935. It was not really amended 

in any meaningful way until 1947 with Taft-Hartley, and it has 

kind of stayed the same since then. It is outdated, it is outmoded, 

and it adheres to a 1930s model, a New Deal model that collective 

bargaining is the way to ensure economic stability, a safe, fair 

workplace for workers, and rights on the shop floor. That model no 

longer applies in the 21st Century in the global economy. The National Labor Relations Act is completely outmoded when it comes 

to the vast majority of industries today in this country, especially 

manufacturing. 

So the NLRB’s focus has become incredibly politicized. It has almost dropped any pretense of being an arbiter or a referee, Mr. 

Chairman, as you put it. And the goal simply is to find ways to expand union coverage to increase that 6.6 number, and by expanding the definition ‘‘joint employeer,’’ and then requiring multi-employer bargaining units, which to me is truly disturbing. Everything we have heard is disturbing, but the thought of taking all 

these newly-created joint employees, cramming them into a single 

bargaining unit, and requiring bargaining with multiple employers 

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who do not agree to it, I think is a recipe for disaster and inefficiency, and it is going to kill jobs. 

Chairman ROE. I think one of the things in the joint employer 

model that they are looking at was just rebutted by both Colonel 

Carey and Mr. Holmes. And I heard Mr. Holmes say very clearly, 

as clear as I can understand it, I run my own business as I see fit. 

I think that is what he said. Certainly you have logos, and models, 

and business models out there to help you promote your business, 

but you run your business, and what they are saying now—I totally 

agree. 

And the example I use is as a medical office, as a private small 

business owner, we contracted out our janitorial services. We did 

not do that, but every day we had certain standards in our office, 

but they did not work for me. And if they were not doing the job, 

I asked them to get people who did do the job. Did that mean I was 

the employer? Well, under this NLRB, the answer would be yes. I 

would be the employer. It is ridiculous. I was not the employer. We 

bid that contract out every year or two, and I am sure you do the 

same thing with many things you do, bid out. 

So would you just again for the record talk about, and Colonel 

Carey, if you would, about how this would affect your business. If 

you no longer had day-to-day control over the people, because I 

heard you say you very much prided yourself in going into homes, 

taking the expertise that you had learned as a military officer for 

30 years, and put that in the business world. How would that affect 

how you run your business? 

Mr. CAREY. Sir, before I answer that, just another add-on here 

from a subtle standpoint with what the situation presents is, in my 

view this is about control, control at a higher level versus at a 

lower level, ‘‘lower level’’ meaning the small businessman. My time 

in the military, and I will use this as kind of an analogy. Our Air 

Force is the greatest air force in the world. It even is today. The 

reason it is, is because we have autonomy in the cockpits of the 

young men and women that fly out and have their missions. 

In the Soviet Union that was not the case. The autonomy did not 

exist. Those young men and women in the Soviet aircraft, they 

were completely controlled by the senior officers sitting on the 

ground. That is the same situation just in a business perspective 

that we face here is that we are moving the power and decision 

making up to a higher corporate level, which then disables businessmen and even the employees underneath to be independent, to 

have the initiative that they need to run a good business, and to 

really create some style and character as a local businessman. 

To answer your question, though, when you talk about the impact on me is, you know, I have a great deal of pride when I walk 

into those homes. I love it when I walk into a store and somebody 

goes, ‘‘Hi, Steve.’’ And maybe it is a homeowner that I met three 

or four years ago, but they recognize me not as CertaPro, but as 

a local businessman. That independence, that sense that I am a 

small local business owner would disappear if I became just a puppet or somebody that was mimicking a lot of what I was told to do. 

And I take a great deal of pride in being able to shape my business because from a franchisee standpoint in the case of CertaPro, 

there are 350 of us out there. All of us run dramatically different 

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businesses. How I run my business in Mobile, Alabama, is not the 

same as Philly, not the same as San Francisco, not the same as the 

middle of Kansas. I tailor it to my market, and it is the decisions 

and risks that I take as a business owner because I am at that 

level, I am in the weeds. 

If that is taken away from me, if I am told what to do, how to 

act, and how to respond, then I am probably going to lose the desire and the initiative to really run my business and work as hard 

as I do. And that is what I signed up for. I tell many folks now 

that I work harder now as a small businessman than I did as a 

colonel commanding hundreds of men. 

Chairman ROE. I believe that. 

Mr. CAREY. And it is an 8-day-a-week job. 

Chairman ROE. My time has expired. Mr. Byrne, you are recognized. 

Mr. BYRNE. Thank you, Mr. Chairman. Colonel Carey, how many 

people do you employ in your business? 

Mr. CAREY. I have three employees, but I use mostly subcontractors. 

Mr. BYRNE. And how many subcontractors on average? 

Mr. CAREY. Seasonally on average I would probably say individually probably in the 30 range. 

Mr. BYRNE. Okay. And, Mr. Holmes, how many people do you 

employ in your restaurant? 

Mr. HOLMES. In the one restaurant that I own and operate, we 

have approximately 20 people. 

Mr. BYRNE. Okay. So what we do is we take your small businesses and we multiply that by hundreds of thousands of similar 

businesses. 

Chairman ROE. Mr. Byrne, when you all answer the questions 

for the questions, could you all speak a little more directly into the 

microphone, bring them up a little closer to you? 

Mr. BYRNE. When you multiply those numbers of employees, subcontractors included, by hundreds of thousands of businesses, you 

see an enormous impact on the American economy. You are creating millions of jobs, and sometimes we get lost when we look at 

the big employers, and I am all for employment at whatever level. 

But you are creating millions of jobs for people that probably would 

not have them without you. 

Not only that, Colonel Carey, I know what you are doing in our 

community. You get hit up all the time for providing this or that 

and contributing this or that, and you do it because you want to 

be a part of your community. Mr. Holmes, I am sure you are doing 

the same thing in Tallahassee. 

Mr. HOLMES. Yes, sir. 

Mr. BYRNE. So not only are you providing jobs to all these people, 

you are an integral part of your local community. We depend upon 

people like you. Colonel Carey is one of our big leaders in our 

Chamber of Commerce. I mean, you are the bedrock of our communities, and the idea that we would change the law and take the employment opportunities away from all your employees and the support you give to our communities not only as small business people, 

but active in your communities, is just beyond me why we would 

think that is a good idea. 

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So I want to say I appreciate what you do, and I know you did 

it because you were trying to do something right for your family. 

But by doing something right for you and your family, you have 

benefitted your communities and the Nation. And so, I will pledge 

for myself, I am going to do everything I can to try to preserve this, 

not just for you, but for years to come. 

Mr. Debruge, your testimony was compelling. I am a native Alabamian, and I am very proud of what we have accomplished in Alabama just since 1993. You mentioned the automotive industry. In 

1993, we did not have a single steel plant in Mobile County. We 

have three now that employ over 4,000 people. Really great jobs, 

pay great wages, provide wonderful benefits. 

But they did not just show up here. We worked as a community 

hard to get them to come here. We worked hard to get those steel 

plants. We worked hard to get Austal Shipyard. We have worked 

like crazy to get Airbus to open up here, which they are going to 

open up next month, and we hope that there are a whole bunch of 

suppliers coming with Airbus. 

Now, what happens to that economic development model for Alabama, and for southwest Alabama, and for other southern States 

because a lot of southern States have done it, what happens to that 

if the NLRB changes the joint employer definition? 

Mr. DEBRUGE. I think, and I will try to be succinct, a couple of 

things. First, it is going to be more expensive to do business here. 

The labor costs are going to go up, efficiencies are going to go 

down. And I think the best example I can give you is what happened, the painful memory of 2008 and 2009. And as I listened to 

CNBC and Fox Business yesterday I had a flashback to what that 

felt like, lest we forget. 

General Motors went bankrupt, Chrysler went bankrupt, and 

they had to be bailed out. For a variety of reasons they went bankrupt. The root cause is people did not have the money or the credit 

to buy cars, and they could not adapt. They were not flexible, and 

they were weighted down by union contracts, so that made it incredibly difficult to respond to the market. 

By contrast, all of the plants in Alabama stayed open. Toyota 

stayed open. BMW stayed open. The transplant operations, as we 

would call them, were flexible. They had a contingent of temporary 

workers that they were able to shed in order to keep their regular 

people employed. Every company approached it in a different way, 

but the bottom line is these union free diverse workforces with different categories of employees and contractors were able to respond 

to those market conditions. 

We still have those jobs in Alabama, and they have increased exponentially since then. Every one of our major manufacturers has 

expanded. And so, if all of a sudden their ability to be flexible, to 

staff their plants in the way they need to staff them is taken away, 

and this one-size-fits-all approach is imposed on them, and they 

have to collectively bargain, along with multiple employers, with a 

diverse workforce, it spells disaster, in my opinion. 

Mr. BYRNE. Well, thank you for that. Thank all of you being 

here. My time is up, and I yield back, Mr. Chairman. 

Chairman ROE. Okay. I thank the gentleman for yielding. Being 

an employer for 30-plus years, I think the person who signs my 

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paycheck is my employer. In my case it is me, but whoever writes 

that check to me is who is employing me, I think. Would you all 

agree with that? 

Mr. HOLMES. Yes, sir. 

Mr. DEBRUGE. Yes. 

Chairman ROE. Mr. Holmes, if somebody is working in your restaurant or, Colonel Carey, you are servicing a home, painting a 

home, when you sign that check, it is not CertaPro that signs that 

check. It is you. It is Steve Carey that signs that check and puts 

it in the mail. That is who those employees work for. 

Do you all see this, if this joint employer status, if the NLRB 

rules that way, do you see this as promoting job growth in this 

country or stifling job growth in this country? 

Mr. CAREY. Well, I think it will stifle it. In my view, small businesses, in particular, at my level of business, and even the independent-owned businesses, we are a fragile entity. A lot of times 

we kind of just hover on the edge of success and failure tied to the 

economy, tied to weather. If I can have the flexibility to make critical decisions, to trim employees at the right time, to be more aggressive in a certain marketing venue, and I make those decisions 

based on my business assessment, I stand a much higher likelihood 

of being successful, whereas if I am driven to kind of follow a 

model, to sort of march in line with what a larger company decision 

above me has enforced upon me, then I am less likely to show that 

flexibility and to survive, which is what it honestly takes at the 

lower levels of business. 

Chairman ROE. And what I see with the franchise model, as you 

pointed earlier in your statement, is what is going on in Kansas 

may not be going on in Mobile, Alabama. 

Mr. CAREY. Exactly. 

Chairman ROE. It may be very different. And the business conditions and environments there may be different, and that allows you 

to adapt very quickly. And that is one of the reasons I think the 

franchise models work so well in the country and why almost 9 

million people work for it. It can turn on a dime. 

And even though McDonald’s, let us say, is a huge corporation, 

most of them are run by just local people in local communities. And 

so, they can adapt to the local environment much more quickly 

than somebody in California, where their headquarters is, can 

adapt to it. 

Mr. CAREY. Here is a great case in point. Four or five years ago, 

I was pretty new to the franchise business, and I wanted to invest 

in TV, which is a lot of money for a very small business like mine. 

The corporate folks at CertaPro, you know, they offer advice, but 

they said, you know, that is probably not a good idea for you, you 

know. It will put you at a higher risk. I—as the business owner— 

made that decision at a risk to myself, and it was a great decision 

because it catapulted me quicker in terms of branding and my market. 

But, again, that was my decision, and I could either be successful 

or fall on my own decisions, but that is what we want to hold onto. 

That is what makes us, you know, entrepreneurs and businessmen. 

Chairman ROE. Here is another question I have, and this is to 

Mr. Holmes, basically two questions. One, what are the benefits, 

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and either one of you can answer this, of buying a franchise instead of opening an independent restaurant? In other words, what 

is the benefit of the brand to you as a business person? 

Mr. HOLMES. Well, just using the sports analogy that you mentioned earlier about basketball, it is sort of like having a great 

game plan for a coach, whether it be, you know, football or basketball, and they have, you know, the playbook, and this playbook 

works. And we have seen it. It is Coach Wooten’s playbook, and it 

works. So I would want to take that playbook, and I would want 

to execute that playbook, and then that would help me be successful. That is the same with franchising. Franchisors have a successful playbook. They have the logos, they have the recipes, and they 

have the procedures; all those things already in place for you to be 

successful. 

So it removes a lot of the risk. It does not remove all of it as an 

operator. You still have to go out and secure jobs and get business, 

and then you have to satisfy those customers, but you already have 

the big part taken care of. You do not have to create something 

that causes a lot of risk. You already have that in your playbook. 

Chairman ROE. It is a proven business model. 

Mr. HOLMES. Yes, sir. 

Chairman ROE. That is what it is. As a former employee at a 

quick service restaurant, quick business, why did you decide to become a franchisee instead of moving up the ranks in the corporate 

structure? Why did you do that? 

Mr. HOLMES. Well, like I said in my testimony, I was actually a 

dishwasher at 19, and was able to move up with that corporation 

as a district manager of ten steakhouses. And through different 

things that happened to our corporation, it was buy-outs. They got 

bought out several times, which created a lot of debt. It removed 

a lot of the opportunity, and then we were faced with some bankruptcy in that steakhouse chain. 

So I went that route, I tried that ladder, and someone else controlled my destiny. Someone in a board room or on the stock market, I do not really know, but it was not me inside those four walls 

of that restaurant. So owning my own business was very appealing 

because I controlled my own destiny. And so, the franchise model, 

after I was exposed to it, was a great step to that because it removed some of the risk of, you know, going out and creating my 

own thing. 

But now on a daily basis I control my own destiny. And I will 

add really quickly, when we talk to business owners, it used to be 

that just finding good people was some of the biggest threat. Finding good people to work with, finding great customers, and just 

continuing the profitability of your business. Now we say our biggest threat is government regulations. That is our biggest threat. 

Chairman ROE. My time has expired. Mr. Byrne, you are recognized. 

Mr. BYRNE. Thank you, Mr. Chairman. When I was listening to 

you talk, Mr. Holmes, I was thinking about a biography of Benjamin Franklin I read a couple of months ago. He was a small business guy. 

Mr. HOLMES. Yes, sir. 

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Mr. BYRNE. He had a print shop, and he organized all the other 

small business people in his community, and they worked together 

to try to help one another, and that is what built America. And 

when he was sitting there in the Constitutional Convention, I know 

he had in his mind, because that was his background, what is 

going to help create the environment in which people can do what 

I did, which is start my own business and make it grow, where I 

take responsibility, and I employ people? 

And I cannot imagine that he and the other people that sat in 

the Constitutional Convention would have dreamt in a second that 

the government they were creating would take away from people 

the opportunity to create that. So I just wanted to offer that. 

But also I want to go back to both you and Mr. Carey. What does 

this do to your employees? I mean, we are concerned about you obviously, but what about your employees, the people you employ? If 

this definition is changed, what is it going to do to them? 

Mr. CAREY. You know, as I created my business, one of the 

things I have tried to do is to create a culture within my small 

business. Although most of my painters are subcontractors, I want 

them to understand that we are delivering something from the 

standpoint that they have never, ever thought about. I want my 

painters, my supervisors, my production managers, to look at me, 

to look at the business with pride. And sometimes you tend to lose 

that identity of a small business of what you can represent if you 

become big. The more global you are at the lower levels, it is a lot 

harder to identify. 

So in my case, I think it is easier for my painters, my subcontractors, to identify with a guy or a gal, Steve Carey sitting 

there, you know, trying to build a culture, and you create loyalty 

when you do that. And from that loyalty, you create pride, and you 

can grow the professionalism and the brand at a small local level. 

But we risk losing that, the identity of that small business if we 

become, you know, in a position where we are driven by a larger— 

Mr. BYRNE. You have got a closer relationship between you and 

your employees than if they are working for some big company. 

Mr. CAREY. Right. 

Mr. BYRNE. And that benefits them because they can come and 

see the owner of the company, just walk in your office to see you. 

Mr. CAREY. Right, and they do. 

Mr. BYRNE. Mr. Holmes, what about your employees? 

Mr. HOLMES. Well, I mean, I agree with Mr. Carey. The upside 

to this is very limited. The downside to this going into effect is 

huge. There are already systems in place to represent our employees if they are being mistreated in any way. So I think the result 

will be they will lose opportunity in the future. It will be removed 

from them. 

We have just in my Firehouse Subs a history, I have an employee that now owns his own Firehouse. He started with us as a 

college student, got out of college and he and his father-in-law 

opened their own Firehouse Subs. They own two restaurants. I 

have a general manager that owns his own Firehouse Subs now. 

I have another general manager who owns his own Firehouse Subs 

now. Both of those gentlemen worked for us for eight to ten years. 

I had an inspector, you know, he would go around helping people 

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out, that worked with us for years. He now owns his own Firehouse 

Subs. 

And so, you know, with that, this regulation will basically remove all that opportunity, every bit of it. So I look at it as we are 

removing the opportunity in the future for the employees. 

Mr. BYRNE. Mr. Debruge, you and I both have practiced in this 

field for a long time. How big a change in precedent would this 

change in definition be? 

Mr. DEBRUGE. I think a good way to illustrate this, and I do not 

want to upset or depress my fellow panelists any more than they 

already are. 

[Laughter.] 

Mr. DEBRUGE. But I do not think they really see the train that 

is coming from the other direction. The focus rightly is on control 

from the top and the loss of flexibility. The NLRB is about unions 

and the National Labor Relations Act. They are looking at liability 

for unfair labor practices possibly, the idea of secondary action, 

them being pulled in as joint employers and no more immunity 

from secondary boycotts, strikes, or picketing. 

But also, and this may be the most chilling thing, they may have 

labor contracts imposed on them because if they are in a joint employment relationship now, and let us say, for example, the Teamsters can organize, on a nationwide basis, everyone who is an employee or even a subcontractor of these entities. And I cannot think 

of anymore interference with their direct relationship with their 

people or the loss of flexibility and control than to have a national 

labor contract imposed on them through this new definition of joint 

employment. 

It is really difficult even to comprehend that we would go down 

this road in this 21st Century economy with the sort of workplaces 

that we have. It makes no sense at all, unless your goal simply is 

to try to get more people to belong to labor unions. 

Mr. BYRNE. Thank you, Mr. Chairman. I yield back. 

Chairman ROE. Along that line, the NLRB’s job and purpose is 

to—look, I grew up in a union household. Full disclosure: my dad 

belonged to a union, worked in a factory, and basically he had a 

right to belong to that union or not belong to that union. He had 

a right to vote and so forth, and that is fine. In America you can 

do that if you want to do that. 

This current NLRB, for the record, has pushed ambush elections. 

Before we had union elections in 38 days. It takes 40 days to take 

a chicken to where you can eat it, and that is pretty quick I think. 

38 days: that is the average time. It would give employees and employers a chance to understand what it means. If they want to vote 

for a union, fine, they can do it. Now that is 11 days. 

As an employer, I could not find you in 11 days to have you represent me to get a labor lawyer. Two micro unions, and not for the 

small business people, but where you have a business like a 

Bergdorf Goodman or others where you have the shoe department, 

the women’s department is different than somebody else. You cannot cross-train people. People cannot move up, as Mr. Holmes 

talked about. 

And, Mr. Holmes, I could see the pride in your face when you 

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37 

ness owners and succeeding. I mean, we want people to succeed in 

the workforce. If you get good employees, they will. 

Card check. We have a bill out there, the Secret Ballot Protection 

Act. Colonel Carey put on a uniform and for 30 years protected this 

country so we have a right to vote. And I say this, I have said it 

publicly, my wife claims she voted for me. Maybe she did, maybe 

she did not. She had a secret ballot. 

[Laughter.] 

Chairman ROE. She said she did, and I assume she did, but that 

is what it is for. Why in the world would we give that up? I was 

elected by a secret ballot. The President was elected by a secret 

ballot. Why should anybody not be elected by a secret ballot? And 

this NLRB is the most activist NLRB in the history since 1935 

when it first came into being. 

And, Mr. Debruge, I want to ask you a question today. I want 

this for the record. We have heard a great deal about the joint employment and the franchise system. However, the potential holding 

in Browning-Ferris will apply beyond the franchise system. Who 

else will be affected by this decision? 

Mr. DEBRUGE. Virtually everyone who is involved in any kind of 

arrangement whereby they use different categories of labor in their 

business on their worksite, people who use temporary employees, 

contractors, subcontractors. You know, I have talked about manufacturing, but really any entity, Mr. Chairman, where today the 

company, it is clearly defined employees in these other categories, 

they are going to be impacted. 

Chairman ROE. So once you have started down this slippery 

slope, there is no end to it then. 

Mr. DEBRUGE. Yes, sir. 

Chairman ROE. Almost any employment arrangement could almost be identified. Am I correct on that? 

Mr. DEBRUGE. You are absolutely correct, yes. This new test is 

nebulous. Looking at the economic or the industrial realities, it is 

just almost a blank check for the NLRB to create these joint employment relationships whenever it wants to. 

Chairman ROE. So as I was telling you before the hearing started, in a large distribution center, I will not mention who they are, 

but I was in one the other day, which was huge, million square 

feet. And obviously during holiday times, be it Christmas or, you 

know, maybe Valentine’s Day, when business picks up, they hire 

temporary employees. Would it affect them also? 

Mr. DEBRUGE. They could very well be, yes, sir. 

Chairman ROE. Okay. I guess one of the other questions for Colonel Carey and Mr. Holmes is how much involvement does your 

franchisor have in the daily affairs of your staff in running your 

business day-to-day. When you get up in the morning, when you 

leave this hearing, and you guys go back to work tomorrow, today, 

this afternoon, are you going to call CertaPro and say, Mr. Jones 

worked eight hours today? How much do they do each day if they 

affect your business? 

Mr. CAREY. None. 

Mr. HOLMES. None. The same, none. We do not communicate on 

employee relationships like that. 

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38 

Chairman ROE. Both of you are truly independent, meaning no 

strings, independent business owners. 

Mr. CAREY. Very, and that is what I love about it. The good part, 

though, too, is I do have a hotline. I mean, I have a phone that 

I can pick up. I can call one of my other franchisees to ask for advice. I can call at the corporate level to say I have got a scenario 

here, what have you seen occur with other businesses. So that conduit of experience that can help me make the right decisions, I 

have that open channel. 

But beyond that and beyond the normal guidance that they give 

for branding and standardization, I do not have daily engagement 

with them. I mean, maybe once a month I reach out to them, but 

generally I do not. 

Chairman ROE. Well, what I have heard today in this testimony 

from all of you all and Mr. Byrne is that I think it has been fairly 

clearly laid out what the motivation of the NLRB is, and that it 

will be deleterious. It certainly will interfere with your business 

model. It may stop it all together, but it will certainly make it 

harder for you to grow your business. And you did not go into this, 

but Mr. Holmes has already been through that experience once. 

And I think we see what the motivation is. 

With that, I yield to Mr. Byrne. 

Mr. BYRNE. Thank you, Mr. Chairman. When we were in a hearing on this or perhaps another topic in Washington a few months 

ago, some of our colleagues from the other side of the aisle were 

saying, well, you know, we are acting as if we are assuming the 

NLRB is going to make this type of decision or that type of decision, and we do not know that. 

And I said then and I am going to say again, I know exactly 

what the NLRB is going to do. This Board is going to do whatever 

the union wants them to do, and that is not the way this was set 

up. Mr. Debruge, I think the Chairman put it very well: The Labor 

Board is supposed to be our referee. It is not supposed to come 

down on the union side, it is not supposed to come down on the 

management side, but keep the equilibrium that was established 

under the law. 

This Labor Board is trying to definitely weight tilt this equilibrium away from that balance and to one side. And it really does 

not matter which side it is because the law was set up to maintain 

the balance. So I think I know what the Labor Board is going to 

do. They are going to continue to do everything they can to help 

unionization. 

And I really think, Mr. Chairman, that ought to be up to the employees. And to take away from the employees by these sort of 

backdoor methods the ability to work with their own employers, 

people that are local to them, people that they know, that they see 

face-to-face, is just un-American. But the political environment we 

are in, that is the reality, and this Labor Board is going to continue 

to do that. 

And I would be interested, Mr. Debruge, is there something you 

think that we could do in statutory law that could rectify this? 

Mr. DEBRUGE. Assuming you could ever get it through this Congress, of course. There could be modifications to the National Labor 

Relations Act. There could be language inserted to prohibit multiCEWDOCROOM with DISTILLER

39 

employer bargaining units, for example. There could be clear direction in the statute about who is and who is not an employer, defining these joint employer relationships. 

Mr. BYRNE. We would essentially—excuse me—put it into statute 

what has been the recognized precedent of the Labor Board for decades. 

Mr. DEBRUGE. Yes, sir, or if there is a way to limit the ability 

of the Board to do through regulatory fiat, you know, what they are 

accomplishing. And, Congressman, you make an excellent point, as 

does the Chairman. The Board was not intended to be an advocate 

for one side or the other. It was supposed to enforce the National 

Labor Relations Act. This Board over the past several years, I think, has done lasting 

damage to the entity, to the concept. Day in and day out, Board 

agents, long-timers, 30-plus years people shake their heads and are 

surprised at what is happening in Washington at the general counsel level in particular and with obviously the Board itself. 

And I cannot speak for them, obviously, but the impression I get 

is they feel like the damage is almost irreparable, that people are 

going to expect now with every political cycle it to sort of be just 

whose turn is it to do this, or to fix this in kind of tit for tat. And 

that is not good for labor. It is not good for employers. It is not 

good for the country. 

And I think in Europe and in Asia, they look at this model and 

they must just shake their heads in disbelief, that we politically do 

not have the will to fix this, to put in place a system that actually 

works, that protects employees, that encourages job growth. But instead we adhere to this fatally flawed system that we have had 

since 1935, and we are watching it be manipulated. 

Mr. BYRNE. You know, there is a reason why all these foreign 

companies are located here. We provide them a labor and employment environment and quality employees. Let us face it, it is the 

quality of our people, and they are coming here because they want 

to take advantage of that. And as a result, if you look at the American economy versus the economy of other countries around the 

world—I will not pick any—the American economy is where everybody is looking to say there is the bright spot right now. Not a 

whole lot of bright spots watching the stock market in the last several days. We are the bright spot because we have maintained this 

sort of freedom of activity by both employers and employees. 

And now we want to take it away and remove the one bright spot 

that we can offer to the worldwide economy? Mr. Chairman, I just 

do not get it. I do not know why in this environment we would 

want to do something like this. I understood what Mr. Debruge 

was saying that we got to get it through the Congress and that 

there are some hurdles to that, but my mother always taught me 

you got to start somewhere. 

And I just think, Mr. Chairman, we have got to start thinking 

about legislation and maybe it does not pass this year, maybe it 

does not pass next year. But we are going to have to pass some legislation to enshrine in statutory law what has been the NLRB 

precedent for decades to make sure we preserve a system that has 

worked for decades. 

And I yield back. 

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40 

Chairman ROE. I thank you. I think of the old adage ‘‘if it is not 

broke, do not fix it.’’ When you have got something that has already provided 9 million jobs and billions of dollars to the U.S. 

economy and is growing, why would you want to stifle that unless 

you had another motive? 

You know, I was standing in Beijing, China, two and a half years 

ago, with this committee on a trip. And it dawned on me when I 

was in Beijing, a country of 1.4 billion people, we have 315 or so 

million people in America, that this country because of our system, 

unless we do something to stop it, this entrepreneurial free spirit 

that we have produced more goods and services. One-fourth of the 

people produced more goods and services than a country with four 

times as many people, which shows you how productive it is when 

you turn and allow that entrepreneurial spirit to flourish. 

And I want to get on the record one of the reasons I think that 

this is going on. The General Counsel for the NLRB is a gentleman, Mr. Richard Griffin, who was a recess appointment to the 

National Labor Relations Board, and his term expired. The way he 

got to be general counsel, and I want to make sure this is in the 

record, in return for voting for cloture on the President’s nomination to the NLRB and Consumer Financial Protection Bureau, Senate Democrats agreed not to change the Senate filibuster rules to 

lower the maximum threshold required to approve executive nominees from 60 to 51. That is how he got there. It was a political 

deal, and this deal, now we are dealing with it. 

We should not be wasting our time on this in this committee 

hearing. We should be spending our time on how to, as Mr. Holmes 

said, to lower regulations. Just to give you an example, and it 

pains me to say this, that I have a friend at Vanderbilt University, 

having two degrees from UT, but he’s the chancellor there. He is 

a friend, Nick Zeppos. Dr. Zeppos analyzed the reporting requirements that he has to do at Vanderbilt University, and this was just 

not there. Just those requirements added $11,000 for every student’s tuition. 

It is ridiculous that we are doing that. Instead of making it more 

expensive to go to school, we should be making it less expensive. 

Instead of making it harder to start a business and run it like you 

are, we should be looking at ways to make it easier as Mr. Byrne 

just clearly said. 

I have no further comments. Mr. Byrne, do you have any closing 

remarks you would like to make or questions you would like to ask. 

Mr. BYRNE. I would just like to thank the panel. I think that you 

very, very ably clarified and sharpened the understanding of this 

issue, and help created the record that we can use going forward. 

And to pledge to each one of you and to the people that I represent 

down here in the 1st Congressional District, I am going to do everything I can to make sure that we preserve what has been a system that has worked so well, and is not only producing wonderful 

small businessmen as you see here, but it is producing jobs for individual people that work for you, and creates local people, local 

businesses that are part of our community, and do so many good 

things. 

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41 

So I am going to continue to work with the chairman here and 

with other people on the staff of the committee to see what we can 

do try to push back against this. And I yield back, Mr. Chairman. 

Chairman ROE. I thank the gentleman for yielding, and I want 

to, again, take the time to thank the witnesses for taking your time 

and effort to do this, to come in front of us, and make this part of 

the congressional record. I want to thank our staff who came down 

early, and the University of South Alabama. I appreciate all the 

hospitality you all showed, and certainly our security folks who are 

here today, thank you for being here. 

You now, it is a privilege to live in this great country, and we 

would not be able to live in this country if it were not for veterans 

like Colonel Carey that put his family on hold many times. He said 

he dragged his wife halfway around the world for 15 years to maintain that. 

This country did not become great by more and more regulations. 

This country became great because of the freedom that we have to 

operate in this great system, and it has made it possible because 

of Colonel Carey and other veterans have done. And I want to 

thank you personally for your service. 

Also, what has been the backbone of America has been small 

business. We know that most of the jobs are created in this country 

by small business people, and they take great pride in it. And I can 

tell you as a small business person, the single most important 

thing in my business were the people that worked with me, not for 

me. They worked with me. And I had many people that worked 

with me for almost 40 years, loyal employees that got up every day 

and came to work and gave their best effort. 

And that is what has helped make this country great. You see 

it. I talked to some of the police officers that were here. They take 

great pride in what they do, and that has been public service. 

Other Americans do that, and I know Mr. Byrne does. And thank 

you all here in south Alabama for sending Bradley Byrne to the 

U.S. Congress. I mean, a breath of fresh air, and he has certainly 

been terrific to work with on this committee. 

Look, I am a doctor, and usually when I see lawyers, you know, 

my blood pressure goes up and all that. 

[Laughter.] 

Chairman ROE. But he has brought an expertise to our subcommittee and to our full committee that was very much needed. 

And I want to thank the people of South Alabama for sending such 

a skilled citizen servant to the U.S. Congress. 

And with that, I thank you once again for being here. No further 

business, the meeting is adjourned. 

[Whereupon, at 11:12 a.m., the Subcommittee was adjourned.] 

Æ 

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