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REDEFINING EMPLOYER AND THE 

IMPACT ON GEORGIA’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 SAVANNAH, GEORGIA, AUGUST 27, 2015 

Serial No. 114–26 

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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(II) 

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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(III) 

C O N T E N T S 

Page 

Hearing held on August 27, 2015 ........................................................................... 1 

Statement of Members: 

Allen, Hon. Rick, a Representative in Congress from the state of Georgia . 5 

Carter, Hon. Buddy, a Representative in Congress from the state of 

Georgia ........................................................................................................... 4 

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

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

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

Prepared statement of ............................................................................... 3 

Statement of Witnesses: 

Mintz, Mr. Jeffrey, Shareholder, Littler Mendelson P.C., Atlanta, GA ....... 7 

Prepared statement of ............................................................................... 11 

Patel, Mr. Kalpesh ‘‘Kal’’, President and CEO, Image Hotels, Inc., Savannah, GA .......................................................................................................... 21 

Prepared statement of ............................................................................... 23 

Salgueiro, Mr. Alex, President and CEO, Savannah Restaurants Corporation, Savannah, GA ....................................................................................... 29 

Prepared statement of ............................................................................... 32 

Weir, Mr. Fred, President, Meadowbrook Restaurant Co., Inc., Cumming, 

GA .................................................................................................................. 35 

Prepared statement of ............................................................................... 38 

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(1) 

REDEFINING ‘EMPLOYER’ AND THE 

IMPACT ON GEORGIA’S WORKERS 

AND SMALL BUSINESS OWNERS 

Thursday, August 27, 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 10:03 a.m., in Live 

Oak Room and Cypress Room, Coastal Georgia Center, 305 Fahm 

Street, Savannah, Georgia, Hon. David P. Roe [Chairman of the 

Subcommittee] presiding. 

Present: Representatives Roe, Carter, and Allen. 

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 will first recognize myself for opening remarks. 

Good morning, everyone and welcome to today’s hearing. I would 

like to thank our witnesses for joining us, and I would like to 

thank the staff here at the Coastal Georgia Center for their hospitality. 

It is nice to have an opportunity to get out of Washington for a 

hearing like this, which allows us to hear directly from you about 

the issues that will have a significant impact on workers and employees in your community and across the country. And I would 

also like to thank the people here in Savannah for the incredible 

hospitality you have shown us. 

Yesterday, I had a chance to visit the St. Mary’s Health Center, 

a collaboration between Methodists and Catholics—I am a Methodist—it shows that if Methodists and Catholics can make something that nice work, imagine what Methodists and Baptists could 

do. 

[Laughter.] 

Chairman ROE. I also visited the Memorial Medical Center, very 

similar to our medical center at home. And I do not think I am 

going to have to eat for another week, I ate at the Wilkes Boarding 

House restaurant yesterday, and I am totally stuffed, and I had a 

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2 

great dinner last evening. The hospitality has been as expected: 

Southern and very warm. And thank you for that. 

The issue we are discussing today is an effort by a group of 

unelected bureaucrats in Washington that could fundamentally 

change the way franchise businesses operate. It is an important 

issue because there is a lot at stake. Hundreds of thousands of 

franchise businesses currently operate in the United States. More 

than 780,000 of them, actually. And they employ nearly 9 million 

workers. These are small businesses that are independently owned 

and operated and that help create jobs and provide opportunities 

for many individuals to pursue the American Dream. Franchise 

businesses are vitally important to communities like Savannah and 

the families that live and work in them. 

A federal agency known as the National Labor Relations Board 

is trying to upend the franchise model that has worked well for 

decades. This is the same federal agency that tried to tell Boeing 

that they could not open a plant in Charleston, South Carolina, 

threatening thousands of good paying jobs for South Carolinians. 

Now the NLRB is again doing the bidding for big labor by making it easier to organize franchise workers, no matter the cost to 

working families and to job creators. To that end, the NLRB’s General Counsel, Richard Griffin, is pushing the agency to rewrite the 

rules that determine who is responsible for the decisions affecting 

the day-to-day operations of a franchise business. Is it the 

franchisee, the individual that owns and operates the business locally, or is it the franchisor, the entity that enables the small business owner to use an established brand to sell certain goods or 

services in a particular area? 

If Griffin has his way, both will be joint employers and will have 

equal responsibility for those decisions, which will include hiring, 

training, wages, and work schedules. And if that happens, there 

will be serious consequences for workers and employers. 

First, let us talk about what it would mean to the franchisees, 

the small business owners. A change like the one Griffin is pushing 

will mean less freedom to actually run their businesses. If a 

franchisor is suddenly responsible for the day-to-day decisions at 

each franchise, they will assert more control over the business—obviously they will. 

That means the franchisees, the small business owners like Mr. 

Patel, Mr. Weir, and Mr. Salgueiro will have less say over these 

important decisions and will no longer decide how to run their own 

businesses. That is just the beginning. 

Expanding the joint employer standard will also lead to higher 

consumer costs for small businesses, lost jobs, more litigation, and 

fewer opportunities for individuals to pursue the American Dream. 

On top of that, the NLRB could extend this radical approach to 

other businesses like contractors and subcontractors. A change like 

that would threaten countless businesses in Savannah, throughout 

Georgia, and across the country. 

It is never easy running a successful small business, especially 

in an economy plagued by the persistent challenges we face today. 

We do not need an unelected, unaccountable board of bureaucrats, 

with an activist agenda, changing the rules to favor big labor. That 

is exactly what the NLRB is trying to do. 

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3 

As we have seen time and time again with this administration, 

the Board is bending to the will of the union bosses who want to 

grow the ranks of dues-paying members. And they are doing it at 

the expense of hard-working Americans. 

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

sharing their personal experiences with the Committee. With your 

stories and personal experiences, you are helping us determine 

what will need to be done to address this misguided scheme and 

put in place policies that encourage—not stifle—economic growth 

and job creation. I look forward to hearing from each one of you. 

And I will state for the record today that we did invite Democratic members of the House to participate and we also invited 

them to have a Democratic witness, which they did not do. 

I now will recognize our host today, Congressman Carter, for his 

opening remarks. Mr. Carter, you are recognized. 

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 like thank our witnesses for joining us, and I’d like to thank the staff here at the Coastal Georgia 

Center for their hospitality. 

It’s nice to have the opportunity to get out of Washington for a hearing like this, 

which allows us to hear directly from you about issues that will have a significant 

impact on workers and employers in your community and across the country. The 

issue we’re discussing today is an effort by a group of unelected bureaucrats in 

Washington that could fundamentally change the way franchise businesses operate. 

It’s an important issue because there is a lot at stake. 

Hundreds of thousands of franchise businesses currently operate in the United 

States – more than 780,000 of them actually – and they employ nearly nine million 

workers. These are small businesses, they are independently owned and managed, 

and they have helped create jobs and provided opportunities for many individuals 

to pursue the American Dream. Franchise businesses are vitally important to communities like Savannah and the families that live and work in them. 

A federal agency, the National Labor Relations Board, is trying to upend a franchise model that has worked well for decades. This is the same federal agency that 

tried to tell Boeing they couldn’t open a plant in Charleston, South Carolina, threatening thousands of good paying jobs. Now, the NLRB is again doing the bidding of 

Big Labor by making it easier to organize franchise workers – no matter the cost 

to working families and job creators. 

To that end, the NLRB’s general counsel, Richard Griffin, is pushing the agency 

to rewrite the rules that determine who is responsible for decisions affecting the 

day-to-day operations of a franchise business. Is it the franchisee – the individual 

who owns and operates the business locally? Or is it the franchisor – the entity that 

enables the small business owner to use an established brand to sell certain goods 

or services in a particular area? If Griffin has his way, both will be ‘‘joint employers’’ 

and will have equal responsibility for those decisions, which include hiring, training, 

wages, and work schedules. And if that happens, there will be serious consequences 

for workers and employers. 

First, let’s talk about what it would mean for the franchisees, the small business 

owners. A change like the one Griffin is pushing will mean less freedom to actually 

run their businesses. If a franchisor is suddenly responsible for the day-to-day decisions at each franchise, they will assert more control over the business. That means 

the franchisees – small businesses owners like Mr. Patel and Mr. Weir – will have 

less say over these important decisions and no longer decide how to run their business. 

But that’s just the beginning. Expanding the joint employer standard will also 

lead to higher consumer costs, fewer small businesses, lost jobs, more litigation, and 

fewer opportunities for individuals to pursue the American Dream. And on top of 

that, the NLRB could extend this radical approach to other businesses, like contractors and subcontractors. A change like that would threaten countless businesses in 

Savannah, throughout Georgia, and across the country. 

It’s never easy running a successful small business, especially in an economy 

plagued by the persistent challenges we face today. We don’t need an unelected and 

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4 

unaccountable board of bureaucrats with an activist agenda changing the rules to 

favor Big Labor. But that’s exactly what the National Labor Relations Board is trying to do. As we’ve seen time and again under this administration, the board is 

bending to the will of union bosses who want to grow the ranks of dues-paying 

members, and they’re doing it at the expense of hardworking Americans. 

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

personal experiences with the committee. With your stories and personal experiences, you are helping us determine what needs to be done to address this misguided scheme and put in place policies that encourage – not stifle – economic 

growth and job creation. I look forward to hearing from each of you, so I’m going 

to yield to my distinguished colleague and our host today, Congressman Buddy Carter, for his opening remarks. 

Mr. CARTER. Thank you, Mr. Chairman, and good morning. And 

thank all of you all for being here today. This is a very important 

hearing and the way I like to put this is instead of you coming to 

Congress, Congress is coming to you. And this is good; we need to 

do more of this. And I want to thank Chairman Roe, and especially 

thank my colleague, Congressman Rick Allen, from the Twelfth 

District here in Georgia for being here as well and making that effort to come down, not too far, but a little bit. But we appreciate 

it and appreciate you spending some time down here, both of you 

I think had an opportunity to see what we are so very proud of 

here in the First Congressional District. I believe that Congressman Allen was able to tour the ports yesterday, and that is certainly an economic engine, not only of Southeast Georgia but really 

of the Southeastern United States and we are very proud of that 

and want to do everything we can to help them. 

Chairman Roe, thank you for your leadership in this important 

issue and everything that you do, we appreciate your service very 

much. 

Earlier this year, the National Labor Relations Board announced 

they were proposing a change to the existing joint employer standard. The new joint employer standard by the NLRB has major implications for every small business community across the country. 

Let me interject right now, full disclosure, I am a small business 

owner. I have a small business that I own, three different stores, 

three locations. I should say my wife owns them now. One of the 

things that you have to do when you become a member of Congress 

is divest yourself of business interests. So let me say that I am 

married to someone who owns three pharmacies right now, 19 employees. So mine is the quintessential small business. So I just 

want to make sure that everyone knows, full disclosure, that I am 

a small business owner. 

But again, the new joint employer standard by the NLRB has 

major implications for every small business community across the 

country. Essentially the new rule would turn franchisees from 

small business owners into managers. Now there is a big difference 

between a small business owner and a manager. I am sure that 

what we are going to hear today, that these business owners are 

going to tell us how much they appreciate their managers. I can 

tell you that I would not be able to be here if it were not for having 

good managers and good people. However, there is a big, big difference between a manager and a small business owner—I will tell 

you that as well. 

CEWDOCROOM with DISTILLER

5 

So essentially, the new rule would turn franchisees from small 

business owners into managers and would result in franchisors 

limiting their expansion because of undue legal liabilities. From retail stores to financial service providers, almost every business in 

every community in the country would be affected. 

In Savannah, there are countless businesses that run under the 

franchisee-franchisor model, whether it is a Hilton or a McDonald’s, we have got them here in Savannah. With this new rule, Savannah’s small businesses would be subjected to legal liabilities 

that they have never been subject to before, causing many businesses to shut their doors. That is why we are here today. We cannot continue to allow the government to enact rules and regulations that squeeze small businesses until they close their doors. 

I look forward to a lively discussion on this issue here today and 

I yield back the remainder of my time. 

Prepared Statement of Hon. Buddy Carter, a Representative in Congress 

from the state of Georgia 

Good morning! I would first like to thank everyone for coming out this morning 

to learning more about this very important issue to the small business community. 

Second, I would like to thank Chairman Roe and the other Congressional members 

for holding this hearing in Savannah, Georgia, and for allowing me to show you 

around Savannah the last few days. It has been an honor and a privilege. 

Earlier this year, the National Labor Relations Board announced that they were 

proposing to change the existing joint-employer standard. The new joint-employer 

standard by the NLRB has major implications for every small business community 

across the country. Essentially, the new rule would turn franchisees from small 

business owners into managers and would result in franchisors limiting their expansion because of undue legal liabilities. From retail stores to financial service providers, almost every business in every community in the country would be affected. 

In Savannah, there are countless businesses that run under the franchiseefranchisor model. Whether it is the Hilton or McDonalds. With this new rule, Savannah small 

businesses would be subjected to legal liabilities that they have never been subjected to before, causing many businesses to shut their doors. 

That is why we are here today. We can’t continue to allow the government to 

enact rules and regulations that squeeze small businesses until they close their 

doors. 

Chairman ROE. Thank you, Mr. Carter. 

I will now recognize Mr. Allen for his opening remarks. 

Mr. ALLEN. Good. Thank you, Mr. Chairman. And again, I want 

to thank you for taking your time and our staff on the Education 

and the Workforce Committee for putting this hearing together. 

This is important business, and I want to thank my colleague, Congressman Carter. 

I will tell you, we also toured Gulfstream yesterday and I will 

tell you what, of course a lot of those folks live in the Twelfth District of Georgia. So, I just wanted you to know that. But, boy, everyone has been wonderful. And of course, we were there at the 

port and I will tell you, you know, I told those businesses and I tell 

my colleagues, you know, our colleagues in Congress are pretty envious of us down here in the Twelfth District and the First District 

of Georgia because I am going to tell you what, we are doing some 

business. 

And it is so refreshing to get out and get with these companies 

and talk about their challenges, as we are going to be talking about 

the challenges of our small business community here today. That 

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6 

is the way you learn and that is what we take back to Washington, 

unlike those who are heading those agencies. You know, apparently 

they are not listening to the American people, and that is the message we need to take back and, of course, that is the reason for this 

hearing today. 

To tell you real quickly, our districts—obviously we border, I am 

in Springfield, Georgia. About 20 minutes up the road is the edge 

of the district and then, of course, to the west is Claxton in Evans 

County and further south is Appling County. 

We also have a number of our staff members. If you would stand, 

our staff, Congressman Allen’s staff, of course, thank you. We have 

got a great group traveling with us there. And boy, they are keeping me on a tight schedule. 

This is an important hearing and, you know, small business creates over 70 percent of the jobs in this country. It is small business 

that has been under attack, particularly the last six years. And, 

you know, I tell my friends in the small business community everywhere I go, I say hang in there, hang in there. We are doing the 

best we can do, and as we listen to this testimony today and we 

hear about the challenges of our small business community, let us 

remember their resiliency. Because it is not easy folks—and I have 

to disclose my wife owns a holding company now that owns a variety of businesses and, you know, I will tell you one group that took 

on the challenge, I really almost apologized to them about a year 

ago because I said, you know, I am not sure I did you folks a favor 

by allowing you to buy this business. It has been tough. You know, 

we are seeing a little light at the end of the tunnel now, but again, 

as we continue to see this regulatory assault on our small business 

community continue, it just gets more and more difficult to say is 

it worth it? It is worth it, folks. We must get people back to work 

in this country; it is the small business community that is going 

to do it. 

And again, I thank you, Mr. Chairman, and I yield back the remainder of my time. 

Chairman ROE. Thank the gentleman for yielding. And just for 

the record, this is an official hearing of the U.S. Congress. 

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 material referenced during the 

hearing to be submitted in the official hearing record. 

It is now my pleasure to introduce our distinguished panel. First, 

Mr. Jeffrey Mintz is a shareholder of Littler Mendelson, P.C. in Atlanta, Georgia. Mr. Mintz is an experienced practitioner before the 

NLRB and has defended employer positions before the Equal Employment Opportunity Commission, the EEOC, and other state and 

federal administrative agencies and courts. He is considered a subject-matter expert with respect to representation elections and related NLRB proceedings, and preventative labor relations. He also 

has extensive experience advising employers facing non-traditional 

organizing including corporate campaign tactics designed to enhance union leverage so as to achieve labor’s objective. 

I will now yield to my friend, Mr. Carter, for introductions. 

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7 

Mr. CARTER. Thank you, Mr. Chairman. 

We are very fortunate to have two very influential business leaders in Savannah with us today. First, Kal Patel, who is President 

of Image Hotels in Savannah. Image Hotels owns and operates 

eight hotels as licensees of Starwood, Hilton, IHG, and Marriott 

brands. Mr. Patel has served on the boards of the Asian American 

Hotel Owners of America and on the Savannah Convention and 

Visitors Bureau. He was born in India in 1978, and moved to the 

United States in 1979, and he is a second generation hotel owner. 

Mr. Patel is a graduate of Savannah State University. Kal, thank 

you for being with us today. 

Also, we are very fortunate to have Alex Salgueiro, who is the 

President and CEO of the Savannah Restaurants Corporation. Mr. 

Salgueiro is the President of the Burger Kings, he actually owns 

and operates numerous Burger Kings throughout the Savannah 

area. Before starting Savannah Restaurants Corporation, Mr. 

Salgueiro was a project manager and the area manager with Burger King Corporation from 1971 to 1986. He was born in Havana, 

Cuba, a place that I had an opportunity to visit earlier this year. 

And he is a graduate of Florida International University. And by 

the way, I want to mention that we are glad you are here and that 

your health is better. We appreciate that, and glad you are doing 

better. And congratulations, I believe you are opening your store 

today, reopening on Derene Avenue. 

Mr. SALGUEIRO. Open now. 

Mr. CARTER. Open now, open this morning. That is great. So 

thank both of you for being here. And I yield back. 

Chairman ROE. I thank the gentleman for yielding. 

Mr. Fred Weir is the President and CEO of Meadowbrook Restaurant Corporation in Cumming, Georgia. Currently owns and operates 10 franchise Zaxby restaurants in Georgia and Arkansas. 

You will be glad to know, full disclosure, had one of your salads 

before I came down here to Alabama the other day. He is a third 

generation restaurant operator. Mr. Weir currently serves on the 

Board of Trustees for Reinhardt University and the Board of Directors of Cherokee County Chamber of Commerce, and CASA, the 

Court Appointed Special Advocate. And thank you, Mr. Weir, very 

much for doing that. Many times that is the only advocate these 

young people have. So that is an incredible thing that you are 

doing, public service. 

I will ask our witnesses to stand and raise your right hand. 

[Witnesses sworn.] 

Chairman ROE. Let the record reflect the witnesses answered in 

the affirmative. You may take your seats. Thank you, gentlemen. 

Before I recognize you to provide your testimony, let me briefly 

explain our lighting system. You will have five minutes to give 

your testimony. When you begin, the light in front of you will turn 

green. With one minute left, it will turn amber. And then at five 

minutes, it will turn red. At that point, I will ask you to wrap up 

your comments. I am not going to cut you off in mid-sentence, but 

try to keep it around five minutes. And I will also ask the members 

to do the same thing. 

Mr. Mintz, you are recognized for five minutes. 

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8 

TESTIMONY OF JEFFREY MINTZ, SHAREHOLDER, LITTLER 

MENDELSON P.C., ATLANTA, GEORGIA 

Mr. MINTZ. Thank you. Good morning, Chairman Roe, Representative Carter, Representative Allen. I appreciate the opportunity to 

provide testimony today. I am going to focus on providing a legal 

context for subsequent testimony from the franchisees in the room. 

Under the current doctrine used by the National Labor Relations 

Board to determine joint employer status, they use and have used 

for many years the common law of agency. And the question before 

the Board has been do two or more businesses share or co-determine the essential terms and conditions of employment of the employees that are the subject of the inquiry. The key is whether or 

not the second employer, the putative joint employer, meaningfully 

affects matters regarding the employment. And this is a broad 

range of things ranging from recruitment to hiring, disciplinary 

standards, supervision, the wages and benefits that are offered. Effectively, anything and everything that arises out of the employment relationship. 

The standard has required direct and immediate control, not just 

theoretical or hypothetical. And what the Board has done is review 

the totality of circumstances. No single factor is determinative. 

With respect to supervision, limited and routine responsibilities 

have not been enough. They require, have required, some degree of 

control over how work is done, not necessarily what or where or 

when, but how the work itself is to be performed. 

The Labor Board had, about a little over a year ago, invited interested parties to file amicus briefs; that is, summaries of rationale and argument, legal argument, as to why the standard should 

be changed, and if so, how it should be changed. And most commentators in the legal community view that as an invitation signaling a desire to change a well-established standard. 

However, they also agree that the ‘‘solution’’ sought—and I use 

that term ‘‘solution’’ in quotes—the ‘‘solution’’ sought by the Labor 

Board seems to be coming where there is no apparent problem in 

the current administration of this component and interpretation of 

the National Labor Relations Act, and I question why they would 

be using administrative power to change a rule. If a change is warranted at some point in time, which I don’t think anybody concedes 

is necessary, then it should be done via the legislative process as 

opposed to the administrative process of the Labor Board. 

Before the current standard, the Board’s approach had been subject to some degree of controversy. And they used conflicting standards which made it difficult for businesses to develop the scope of 

their business relationships in a manner compliant with the legal 

precedent. With the current standard, however, businesses have 

been able to act and strategize and change in accord with this 

precedent that has been around for in excess of 30 years. And the 

result I think is clear, it has led to an expansion of franchised businesses and specialized subcontractor employers and jobs that they 

provide. 

So essentially, the business community’s perspective is that there 

is no compelling reason to change the legal standard when the 

long-standing standard has offered predictability, stability, and a 

framework for their contractual relationships. 

CEWDOCROOM with DISTILLER

9 

Which takes us to the problem that is going to be answered I 

think very, very shortly. And that is the case that has prompted 

much of this debate currently before the Labor Board. It’s called 

BFI and BFI is involving facts that are not unusual or controversial, it’s an organizing drive in which a group, a Teamster Local, 

tried to organize the employees of a subcontractor of BFI’s called 

Leadpoint. Leadpoint has the sole responsibility in this case for recruitment, hiring, discipline, evaluation, and termination. They 

have their own separate supervision on site. They have separate 

HR departments. So in effect, there’s no role whatsoever that BFI 

plays in setting wages, administering benefits, scheduling employees, or maintaining their employment efforts. 

The ‘‘support’’—and I use that in quotes—for the joint employer 

contention is that BFI’s contract with Leadpoint was cost-plus, and 

it had a cap. And I’m sure they capped it at whatever it would 

have cost BFI to pay for those employees and their wages and benefits had they employed them directly, and there was a financial 

incentive and benefit for them to subcontract the work to 

Leadpoint. But the cap doesn’t determine what the employees are 

paid, and despite that, Counsel for the General Counsel has taken 

the position that BFI and Leadpoint are joint employers. 

Why would the Board do this now with this case? Well, his amicus—the General Counsel for the Labor Board’s amicus brief says 

that the current standard has particularly inhibited meaningful 

bargaining regarding the contingent workforce and non-traditional 

employment relationships. 

General Counsel proposes that the Board move from day-to-day 

control to operational control at the system-wide level and they 

want to broaden it to consider the totality of circumstances, which 

would include indirect or potential control, even if it’s unexercised. 

With the caveat that the decision that we’re talking about here 

is likely to be issued today or possibly early next week, but many 

expect it to be today in conjunction with the ending of the term of 

one of the Republican members of the Labor Board, we are concerned that it’s going to lead to a lack of clarity, uncertainty regarding employment status, unwanted second-employer influence 

over the putative joint employer, and have direct impact upon the 

franchisor and franchisee relationships, which I will certainly let 

others in the room testify to. 

But in quick summary, the likely consequences of the anticipated 

change, none of them are welcomed by the employer community, 

and one commentator has said that it’s an attempt to turn hundreds of individually-owned small businesses into one giant union 

hall. The employer, who does not directly control the terms or conditions, is going to face bargaining obligations under the National 

Labor Relations Act. They are going to be enmeshed in potential industrial disputes on a broader scale. They are going to lose the protections that the National Labor Relations Act provides as a secondary or neutral employer, meaning they are subject to picketing 

and other pressure points applied by the union in play. They are 

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ployer to develop a different, more receptive attitude towards their 

labor objectives. And there’s going to be confusion and uncertainty 

during the expected requests for review while this is certainly undergoing some form of appeal process. 

So there’s certainly going to be a negative impact on franchise 

development, and corporate small business ownership is going to be 

jeopardized if the new model is used, and the bottom line is there 

is great legitimate and growing concern among franchisors, 

franchisees, and small business owners at both the large and the 

small level. I’ve been contacted by many clients who you would consider larger employers and they want to know what they should do 

in anticipation of this dramatic change. I don’t know what they’re 

going to do, it’s going to depend on a case-by-case assessment, but 

I do know that they are going to do something and something is 

not going to bode well for the impacted employers. 

Chairman ROE. Thank you, Mr. Mintz. And for the record, BFI 

is Browning-Ferris Industries, for the record. 

Mr. Patel, you’re recognized for five minutes. 

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TESTIMONY OF KALPESH PATEL, PRESIDENT AND CEO, IMAGE 

HOTELS, INC., SAVANNAH, GEORGIA 

Mr. PATEL. Chairman Roe, Congressman Carter, and Congressman Allen, I would like to thank you and the members of the Subcommittee for the opportunity to testify at this hearing today. I 

look forward to sharing my story of entrepreneurship and the 

American Dream. 

My name is Kal Patel and I am a small business owner from 

Pooler, Georgia, and the president and CEO of Image Hotels. I am 

also a past Board of Director at the Asian American Hotel Owners 

Association and second generation hotelier, and I am proud to continue the family business. 

My family emigrated from India to the United States in 1979 in 

order to pursue opportunities for entrepreneurship and to improve 

our station in life. 

In 1985, my parents bought the Red Carpet Inn, a 50-room hotel 

and our first experience with franchising. Franchising provided the 

consistency of customers, security of a national brand, a larger 

market share, and tools and resources to help us succeed in growing our business. 

While I was growing up, the hotel was not only our family business; it was our way of life. I learned important life lessons about 

the value of hard work and community service while I was making 

beds, cleaning rooms, taking out trash, and maintaining the upkeep of the property. Soon, as a teenager, I was learning the financial and managerial aspects of the business, and I became a more 

active participant in running the operations of our hotel and seeking opportunities for the development of additional properties. 

At 17 years old, I started Image Hotels to consolidate our operations and secured an SBA loan to develop my first property, a 50- 

room Ramada Limited in Port Wentworth, Georgia. I am proud to 

be a lifelong entrepreneur and job creator and I am grateful for the 

opportunities my family and I have had to be small business owners. 

Today, we own eight properties throughout the Southeast, including Marriott, Hilton, and Choice branded properties, where we 

employ 275 hardworking Georgians. 

Franchising is the preferred model in the lodging industry because it allows hoteliers to control our own businesses. It is for that 

reason I am here today to discuss the overwhelmingly negative impact a change in the joint employer legal standard for franchise 

business relationships will have on small businesses and our employees. 

The franchise business model has been essential in creating entrepreneurship opportunities for hoteliers, thousands of whom are 

first and second generation Americans. I fear the prospects for 

business ownership would be significantly limited if franchising 

were no longer available to us. 

Hotelier franchisees are responsible for undertaking all of the financial risk and directly operating the business. Further, it is the 

hotel owner and operator who controls staffing decisions. 

For their part, my franchisors provide a support system for my 

business and ensure I maintain a minimum brand standard. However, aside from some general conversations with my management 

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teams, brand representatives do not interact with my staff and 

both the franchisee and franchisor prefer it that way. 

Franchisees also pay the franchisor a one-time license fee for the 

use of the flag or brand name and pay royalties based on gross revenue. These specific responsibilities are clearly defined in the franchise agreements I signed with each brand for each hotel but in no 

way does the agreement create an agency expectation or diminish 

my independence as a business owner. 

As a hotelier, I have come to depend on the franchise-model as 

the most advantageous means to small business ownership. An expanded joint employer legal standard indicated by the NLRB would 

compel franchisors to take an active role in staffing decisions due 

to the newly manufactured potential for liability. Franchisees 

would lose independence in decision-making and would effectively 

become employees of the franchisor because they would be forced 

to follow someone else’s directives. 

Similarly, as franchisors spend more time and additional resources at my properties, they will likely insist on charging higher 

royalties and license fees to account for their increased cost and, 

thus, add financial burdens on my businesses. As brands are coerced into micromanaging my businesses, our contractual agreements outlining our responsibilities will undoubtedly be upset and 

potentially invalidated. 

What I struggle with most is trying to understand the rationale 

of the NLRB and its General Counsel in seeking to upend a business model that has been exponentially successful for decades. The 

NLRB’s General Counsel has referred to franchising as an outsourcing arrangement where the franchisor inserts an intermediary 

and merely designates the title of employer onto the franchisee in 

an effort to evade bargaining with organized labor. This is an absurd and offensive characterization of the life and business my 

family and I have built over the past 36 years. 

Chairman Roe and members of the Committee, I urge you to investigate this issue thoroughly and keep my employees and my 

story in mind as you review administrative decisions affecting 

small business owners. 

I encourage you and your colleagues to tour hotels in your districts and get to know the proprietors and employees who are eager 

to serve the guests who come to stay with them. I sincerely appreciate Congressman Carter taking time to visit our Double Tree, last 

week, at the airport recently and experiencing firsthand the impact 

of the lodging industry and the franchise model on the lives of our 

team, our families, and our community here in Southeast Georgia. 

I am grateful for the opportunity to speak with you today and I 

urge you to stand up for us and protect us from oppressive government overreach from bureaucrats in Washington, D.C., who do not 

understand our businesses, our communities, or our ways of life. 

Thank you. 

[The statement of Mr. Patel follows:] 

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Chairman ROE. Thank you, Mr. Patel. 

Mr. Salgueiro, you are recognized for five minutes. 

TESTIMONY OF ALEX SALGUEIRO, PRESIDENT AND CEO, SAVANNAH RESTAURANTS CORPORATION, SAVANNAH, GEORGIA 

Mr. SALGUEIRO. Thank you, Chairman Roe, Representative Allen, 

and Representative Carter for the opportunity to submit my testimony today. My name is Alex Salgueiro and I am Chief Executive 

Officer of Savannah Restaurants Corporation, owning 10 Burger 

King restaurants in and around the Savannah, Georgia area. I 

would like to note that I am a small business owner; my views are 

my own and may not reflect those of Burger King Corporation or 

other franchisees within the Burger King brand. 

I was born in Havana, Cuba, in 1954. I am the son of a former 

Cuban governor who fled to the United States after the Cuban revolution. After two years in hiding, my family and I were able to 

join my father and seek refuge in the United States. As a boy growing up in Miami, Florida, I first became a crew member at a local 

Burger King, which is the world headquarters city, when I was 14 

years old. After years of hard work and dedication, I became a district manager for Burger King Corporation and was tasked with 

opening the first Burger King restaurants in countries including 

England, Denmark, Sweden, Panama, Ecuador, Venezuela, and Colombia. After that stint, I then settled in Atlanta, Georgia, where 

I became the area manager for Burger King Corporation in that 

area for five years. 

My experiences with the Burger King brand helped me to recognize the opportunities available for lower- and middle-class Americans. Through franchising, people can live the American Dream of 

owning a business, creating jobs and giving back to their community. After 16 years working for the Burger King brand, I decided 

to leave the corporation and purchase my own Burger King franchise in Savannah, Georgia. 

I now own ten Burger King restaurants, employing over 350 individuals in and around the Savannah, Georgia, area. Several years 

ago, I owned as many as 15 restaurants and employed over 480 individuals, but due to government mandates contained in laws such 

as the Patient Protection and Affordable Care Act, I have been 

forced to sell or close some of my restaurants, a third of my business, and put some of my employees out of work. 

I am here today to talk to you about the impact of yet another 

likely mandate on my business—the joint employer standard as 

proposed by the National Labor Relations Board (NLRB). As I understand it, the NLRB would like to expand the standard from requiring direct control to looking at the totality of the circumstances 

in determining whether franchisors or franchisees should be considered joint employers for labor claims. For the reasons below, and 

on behalf of a business that is solely owned and run by me, application of the proposed new standard would be devastating to my 

business, my employees and the franchise model in the United 

States in general. 

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The Franchise Model: appreciating the franchise model is essential to understanding that a new joint employer standard would be 

devastating to all parties involved. As a franchisee, I am required 

to carry certain trademarks and other identifiers consistent with 

the Burger King brand. This model provides my business with 

brand recognition, quality control measures designed to ensure that 

customers receive a high quality experience no matter what franchise they visit. 

That being said, I’ve signed agreements specifically identifying 

myself as an independent owner and operator of my Burger King 

restaurants. I became a franchisee because of the opportunity to be 

my own boss and hire people from my community. I own my business and I’m in complete control of the hiring, firing, scheduling, 

and duty assignments of all my employees among many, many, 

many other responsibilities that I have. In fact, in my 45 years 

working for both the Corporation and on the franchisee side of the 

business, I have never been part of any discussion with Burger 

King Corporation and a franchisee over personnel matters. 

Franchisor-franchisee discussions have always been limited to nonlabor business issues such as advertising, marketing, restaurant 

operations, and vendor sourcing, just to name a few. The franchise 

agreement specifically establishes franchisee independence, the cornerstone of the entrepreneurial spirit. By changing the definition 

of control from indirect to direct, the proposed joint employer language destroys an essential element of the franchise model. 

As a franchisee, I also agree to a provision in my franchise agreement that indemnifies Burger King Corporation against claims, demands, losses, obligations, costs, expenses, liabilities, debts, and 

damages. There’s a whole lot of stuff that they’re indemnified 

against, I could go on. 

As a result, if Burger King Corporation is treated as a joint employer, labor claims will skyrocket and all legal and financial obligations related to those claims will fall on my shoulders. As a small 

business owner, the time and cost required to defend those claims 

against both the corporation and myself will take time away from 

running my business, drain my resources, and will very likely 

cause me to go out of business. 

To put it plainly, a more broad joint employer standard would 

destroy the franchise model as we know it. Threatened with increased liability, franchisors will be forced to implement extreme 

oversight policies in local franchises across the country. And I have 

worked on that side of the business, so I know what I’m talking 

about. As a result, franchisors will increase not only corporate oversight efforts, but implement extreme, detailed franchisee and employee policies which will shift franchisees’ focus from running 

their business and providing superior customer service. 

As a franchisee, I will be no more than a glorified manager in 

my own business and in my own restaurant. As the best resource 

to determine the needs of my local community and workforce, I will 

have no flexibility in determining the daily operations of my business. Further, increased franchisor oversight will undermine my relationship with my employees and leave me in a constant fear of 

labor claims. The years of labor and hundreds of thousands of dollars I have invested in my business will result in nothing more 

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than an income and an employer manual. I will be a glorified manager. 

In addition to the oversight described above, a broader joint employer standard will likely cause franchisors to reconsider their corporate structures. A threat of increased liability may lead to increased corporate buyouts in an effort to consolidate franchisor 

oversight and management. As a result, the new joint employer 

proposal will likely lead to store closures, job losses, reduced economic activity, and reduced community support. In a brand that is 

almost 100 percent franchised, thousands of Burger King owners 

and operators will be forced to sell their business and leave their 

employees in uncertain futures. 

In closing, the new joint employer standard—as proposed by the 

NLRB—will quickly destroy a successful business model, which has 

been in place for decades. The current standard, which correctly defines the terms in which an entity should be considered an employer, has been effective for all parties involved and will continue 

to work for many, many years to come. For those reasons stated 

above, implementation of a new broader standard will place unprecedented burdens on franchisees. For me, I will likely be forced 

to either close my restaurants or sell them to the Corporation. Either way, this proposal will likely cause small business owners like 

me to close their doors and put hundreds of thousands of employees 

out of work. 

My BK franchise has allowed me, and many other minorities like 

me, to attain the American Dream. Unfortunately, if the new joint 

employer standard, as proposed, is enacted, it will destroy the ability for many middle class Americans like myself to be able to use 

franchising to attain the American Dream. 

Thank you. 

[The statement of Mr. Salgueiro follows:] 

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Chairman ROE. Thank you, Mr. Salgueiro. 

Mr. Weir, you’re recognized. 

TESTIMONY OF FRED WEIR, PRESIDENT, MEADOWBROOK 

RESTAURANT CO., INC., CUMMING, GEORGIA 

Mr. WEIR. Good morning, Chairman Roe, Congressman Allen, 

and Congressman Carter. My name is Fred Weir, I own four 

Zaxby’s restaurants here in Georgia. Thank you for inviting me to 

testify on the new joint employer standard that frightens small 

business owners like me. This is a proposal that has almost unlimited destructive capability, and it threatens to undermine how I 

run my business, as well as the jobs of many in our employee family. 

I appear before you on behalf of the Coalition to Save Local Businesses and the International Franchise Association. The CSLB is 

a diverse group of locally owned small businesses like me, as well 

as associations and organizations that represent small business. 

The group is dedicated to protecting and strengthening sectors of 

small business, which are now under attack by the National Labor 

Relations Board, a regulatory body of five unelected Washington 

bureaucrats. The Coalition’s goal is to maintain the current joint 

employer legal standard across federal and state statutes. 

The IFA is a leading association member of the CSLB, and works 

to protect, enhance, and promote franchising. In franchising today, 

there are more than 780,000 establishments across the U.S. that 

support nearly 8.9 million direct jobs, $890 billion of economic output for the economy and 3 percent of the Gross Domestic Product. 

IFA members include franchise companies in over 300 different 

business format categories, individual franchisees, and companies 

that support the industry in marketing, law, and other areas. 

The new joint employer standard is aimed directly at the destruction of small business in my local community outside Atlanta, 

of the small business in this state, and in every state across the 

country. This statement may sound like a pretty good example of 

hyperbole, except that it is not hyperbole. It is true. It’s happening 

now and only the United States Congress can stop this economic 

juggernaut. 

Mr. Chairman, the title of this hearing is ‘‘Redefining Employer.’’ 

Please forgive me, but saying the joint employer redefines employer 

like a Category 5 hurricane redefines the shoreline. No, Mr. Chairman, a Category 5 hurricane eradicates the shoreline and everything on it. And this new standard for joint employer proposed by 

the NLRB is specifically designed to do the same thing: eradicate 

franchising and irreparably damage every small business built on 

the franchise model. 

Franchising is a method of doing business that has allowed hundreds of thousands of individuals who want to run their own businesses to realize that dream using their own sweat equity combined with someone else’s concept. Franchising is a method of 

doing business that’s so successful because it’s so repeatable. Franchising provides a pathway to prosperity for entrepreneurs, employees, and communities in every corner of our country. I have 

seen franchising allow businessmen and women in my community 

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to create and build businesses that otherwise they would have 

never had the opportunity to do. 

I have been in the restaurant business all my life. I decided to 

become a Zaxby’s franchisee because I recognized the great concept 

built around unique stores and a very exciting menu of chicken, 

salads, and desserts that I knew would be successful. As I mentioned, I have four Zaxby’s restaurants with 160 employees here in 

Georgia,and I operate restaurants in other states as well. 

I signed a franchise agreement with Zaxby’s precisely because I 

knew I would be the boss of this new business, implementing the 

Zaxby’s concept. I know the restaurant business, I know my community, and I knew that this Zaxby’s concept would be successful 

there. In Cherokee County, where I have my restaurants, I do not 

distinguish between the success of my restaurants and the success 

of my employees. My goal in opening up my first franchise was to 

build something unique and special not only for my own family but 

for the many teams members that work for us. 

It is no exaggeration that I treat all my employees as if they 

were members of my own family, because in my eyes, they are. 

Many on our staff have loyally worked for years with the special 

relationship and culture that we have worked hard to create. This 

culture is the reason many on our staff have stayed for so long. 

However, if franchisors and franchisees are defined as joint employers by the NLRB, I might lose control of the business and the 

many decisions that are made on the local-level by myself and our 

managers, who know and care for team members. And that would 

be lost. Please allow me to give you a few examples. 

Our staff bring their best to work every day. They know I care 

about them, and I want them to succeed. When a high school student starts his or her first job at one of our Zaxby’s restaurants, 

I make sure her parents are there at the orientation session. I 

want the young lady to see the pride in her parents’ eyes as she 

begins her first job and learns what it means to be a part of the 

community with a higher purpose. I want her to know that her job 

is not just a place to earn a paycheck, but it’s also a community 

where she will collect a larger dividend of meaning in her life. 

Sometimes my employees find themselves in very difficult personal circumstances at home, with a sick parent or child, or with 

other life challenges. One relatively young employee suddenly had 

a heart attack, and had used up all of his personal leave time. We 

made sure he continued to be paid until he could resume a normal 

schedule. 

Another employee, a single mom, suddenly faced her own mother’s illness and needed to take time off to care for her. She took 

the time, and we made sure she continued to take home a paycheck. 

We offer scholarships to our employees, young and old, so they 

can enrich their education. We do these things because we would 

do them for our own family. We have employees have been with us 

for years. They stay, not for the money. We all need to be paid, but 

our employees stay because that’s where they want to be. This is 

where they want to live. 

Mr. Chairman, the new joint employer standard from the NLRB 

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nesses that operate under the franchise model. The new standard 

would force operational changes on the franchisor and the 

franchisees. Since the NLRB appears determined to change this 

measure of who controls the business, the balance of control between the franchisor and franchisee will have to change. The 

franchisor’s magnified liability will lead to substantially diminished 

control by the franchisee. 

Decisions that are mine today will be the corporate franchisor’s 

tomorrow. Today’s culture of family practices and for caring for 

community will be replaced tomorrow by the corporate personnel 

manual. Maybe there’s no room for parents at their daughter’s orientation. Maybe there’s no room in a manual for continuing a paycheck after leave is exhausted. There might not be room in the 

manual for helping a single mom whose mother is ill. Without any 

doubt, there will be fewer opportunities for new entrepreneurs who 

want to start their own businesses, and who would have used the 

franchise model to do so, but find the joint employer standard has 

shut down the franchising pathway to prosperity. 

The brave new world of a wide-open, nebulous joint employer 

standard is a bleak and desolate place. It is bleak because it rests 

entirely on wrong assumptions about how businesses—especially 

franchise small businesses—operate in towns and communities 

across this country. It is desolate because it deprives people, the 

entrepreneurs and risk takers who start businesses and the individuals who find meaningful employment there, of a future and the 

opportunity for a better life. 

This plea is not based on politics either to the right or the left. 

I know beyond a shadow of a doubt our business has solely been 

successful because of the amazing people who work for us and the 

decisions I have been able to make about our business culture. A 

new joint employer standard would fundamentally alter the way I 

operate and inhibit our ability to expand and prevent much of this 

from happening. That does not benefit the hard-working people we 

have now on our team, and prevents many others from joining our 

family and growing with us, creating even more jobs. The NLRB 

needs to leave the joint employer standard as it is. 

Mr. Chairman, I ask that this Subcommittee and your colleagues 

in Congress do everything to stop the NLRB. In fighting back, you 

will help save local businesses like mine. 

Thank you very much for your time. 

[The statement of Mr. Weir follows:] 

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Chairman ROE. I thank the panel for their testimony and I will 

now begin the questioning. I recognize myself now for five minutes. 

I think, Mr. Patel, I will start with you. You mentioned, when 

reading your testimony last evening, ‘‘What I struggle with most is 

trying to understand the rationale of the NLRB and its General 

Counsel in seeking to upend a business model that’s been exceptionally successful for decades.’’ Why do you think that is? Because 

you are correct in that. 

Mr. PATEL. Why isn’t it? I don’t see any other pressure group 

going to Congress trying to correct it, that it’s not successful. The 

one thing that this does—and to what Mr. Weir said—is building 

culture in a company. When corporate America or some other agency up North or out West is trying to tell you how to mandate employees, it changes the culture of a company. 

I can give you lots of stories within our organization where we 

have taken a housekeeper or a night auditor to a general manager, 

the opportunity to go up in a company. The brand or the franchisor 

applauds that. They do not prohibit that. Now take the reverse, it 

is going to come back and say I am not motivated to take that 

night auditor or that housekeeper to graduate them, if I’ve got 

standards coming on to me that say you need to do X, Y, and Z. 

So this has been successful for decades, I don’t see any other 

group trying to correct that formula, the franchisor and the 

franchisee. 

Chairman ROE. Mr. Weir stated—and as I read your testimony— 

you compared the joint employer—the new definition to a Category 

5 hurricane, that the NLRB wants to destroy the franchise model. 

I disagree with you, I think basically what it is, is the NLRB is tilting the table in favor of unions. 

I grew up in a union household. My dad was a member of the 

union, and the NLRB is supposed to—I am an old basketball player 

and the NLRB is supposed to be a fair referee. It is supposed to 

come in and represent the employer and the employee so they all 

get a fair shake. 

What this particular NLRB is doing is tilting it dramatically in 

the favor of the unions. And let me just give you an example. This 

is not the first assault on small businesses that I have seen by the 

NLRB. One was the ambush elections. The average time it takes 

to have an election, so that everybody gets all the information on 

the table, has been 38 days, that is how long it is. Now it can be 

as little as 11 days. 

In my business—I am a small business person. We started a 

medical practice with four doctors, 12 employees. We now have 100 

providers and 450 employees. I could not find Mr. Mintz in 10 days 

to get representation for my business. I could not find a good labor 

lawyer where I live in that length of time. 

And I think the secret ballot protection, I mean the most sacred 

thing—I put a uniform on and left this country and served in the 

Second United States Infantry Division to protect your right to a 

secret ballot. And that is trying to be taken away from us. And I 

say this as a joke, my wife swears she voted for me, but I do not 

know whether she did or did not, because she had a secret ballot. 

She claims she did, but I do not know for a fact that she did. 

[Laughter.] 

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Chairman ROE. So some days I probably wonder whether she did 

or did not. 

But I could go on and on with this, and I think that is what this 

is. And you all have very eloquently said and stated that you run 

your business day to day, you decide what the wages are, what the 

hours are, all of those things. And the other thing, I know the person who always employed me was the person who signed my paycheck. And I think you sign all the paychecks of your employees, 

I believe that you do. 

Mr. Mintz, I want to get a statement on the record from you. According to recent media reports—yesterday—officials at OSHA 

have asked regional officials to take into account whether the 

franchisor controls the workplace safety practices of the franchisee 

when considering potential violations at the franchise business. 

Could you make a statement about that, please? 

Mr. MINTZ. Chairman Roe, I think that is a move that is consistent with what we are seeing, not just at the National Labor Relations Board, but throughout the administrative agencies that are 

staffed by appointees, political appointees. And I happen to agree 

with you with respect to the labor law, the labor law component. 

I think it is designed—this is designed since labor law was not effectively changed itself, the Employee Free Choice Act failed and 

they are moving to seek to ambush elections and now the expansion to try to enhance unions’ ability to organize on a larger scale. 

I think the expansion of the joint employer definition by OSHA 

as well as by the Department of Labor and the EEOC—the common thread running through them is that there are going to be 

more employers that are subject to potential administrative and financial liability and more employees that will have access to and 

recourse through the administrative agencies for violations of what 

they view in the workplace. 

Chairman ROE. Let me just state for the record before I yield my 

time, is that look, you have a right to unionize. In America, that 

is a right we have that is clearly established in law. But you also 

have a right to make an informed decision. If you want to have it, 

fine, vote for it. That is legal in America. And if you do not, you 

ought to be able to not vote for it. It is also legal to do that. And 

as I said, it looks to me like the NLRB, and especially with this, 

is trying to close a billion dollar plant in Charleston, South Carolina. That was astonishing to me, that they tried to do that. And 

no jobs were lost in Everett, Washington. As a matter of fact, jobs 

were added at Boeing in Everett. 

My time is expired. I yield to Mr. Carter. 

Mr. CARTER. Thank you, Mr. Chairman. 

I am going to start with Mr. Patel. Mr. Patel, as you mentioned, 

I had the opportunity and was delighted to visit one of your hotels 

last week, and I appreciate your hospitality very much. I could not 

help but notice the relationship between you and your employees. 

I mean you seemed to take a personal concern and personal interest in your employees. 

And I am just wondering, if this rule were to go through, do you 

see that—I am sure you are not going to change, but because of circumstances—if this rule went through, I am not sure that the 

franchisees would still have that same relationship. 

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Mr. PATEL. That bond and that connection. I think, would we 

give it a valiant effort and try to keep the culture and the etiquette 

the same? Absolutely. Will law or brand regulations in terms of 

governing HR allow it to continue? I highly doubt it will. And 

again, when you’re mandated to do things a certain way, it’s going 

to create a separation in that. Above and beyond that, you know, 

I’ll say it for the third time, I’m going to be a manager for those 

franchisors and that’s not the American Dream and it’s not allowing us to continue, what I’m going to say, as a true free enterprise 

system. You’re constricting that. 

Mr. CARTER. Let me ask you about—you utilize subcontractors? 

Mr. PATEL. Yes. 

Mr. CARTER. How do you think this is going to impact that portion of it? 

Mr. PATEL. Well, trickle-down economics, trickle-down labor market, you know, this is going to create a domino effect in the labor 

market. So when I get ready to develop or acquire a hotel, we look 

at the market from a performance standpoint, then you look at the 

labor market. So if the subcontractor is a franchisee, say U.S. 

Lawns, a franchise company that does landscape work, if they’re 

doing landscape work for me at one of my hotels, he’s going to have 

the same bureaucratic things that we have to deal with. Right? So, 

it’s going to trickle down in that way. 

You know, the other issue is if I’m forced to lay off or let go, then 

it’s going to create a shift in employment. So I think subcontractors 

will also feel the same pain and, you know, just as I’m their customer, will I get the same service? I doubt it. 

Mr. CARTER. Right. You mentioned that you’re a second generation hotel owner and you obviously have been successful and you 

know what it takes to build a business and to keep it successful. 

What about future expansion? Do you think this is going to have 

a negative impact or a positive impact on future expansion? 

Mr. PATEL. This would have a definite negative impact. I would 

probably change my business model completely to where I would 

probably get out of this business particularly and get out of franchising as a whole. You guys have got to keep one thing in mind: 

small businesses in general today have a hard time maintaining 

HR. Just hiring one person, the amount of checks, balances, and 

assurances we have to go through to stay within the law is very 

hefty and now we’ve just added the ACA, which pardon me, I 

haven’t figured it out yet, but I don’t think Congress has figured 

it out. It’s horrendous. 

And then we add this to that? We are just growing that stack 

and I’ll ask you guys, why would I want to employ more people? 

Why would I want to employ more people, I do not want to create 

more jobs, unfortunately, because you’re not—Congress or the law 

is not motivating me to go out and do that. 

Mr. CARTER. Thank you, Mr. Patel. 

Mr. Salgueiro, you mentioned in your testimony the interaction 

between the franchisee and the franchisor on non-labor issues, and 

that obviously exists. But now it is going to be expanded if this rule 

goes through, and you are essentially, as you said, and as all of you 

have said, going to end up being just a manager for Burger King. 

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Mr. SALGUEIRO. Well, if the numbers are correct that there are 

some 90 million-plus people out of the workforce right now, get 

ready for that number to explode and go up, because franchisees 

will want to have much fewer employees than they have now. Over 

the last 20 years, the average Burger King restaurant used to employ 50 employees and now we employ 25, so it’s cut in half. This 

type of move would actually cut that further. And I can tell you, 

robotics and American ingenuity is hard at work right now trying 

to replace every one of those jobs in these kitchens. You know, 

McDonald’s is doing a lot of research, Burger King, they’re all putting a lot of money into research. 

But it would be—like Mr. Patel said, we have a culture that if 

you work hard and you do well, there’s no limit to how far you can 

advance, how much you can get paid. You know, our GMs have the 

power to raise people’s salaries, to raise their wages, all they have 

to do is fill out one form, one page form and their supervisor signs 

off and it is done. And I can tell you, you take that type of control 

away where supervisors cannot even pay people what they’re worth 

and the whole thing just self-destructs. 

Mr. CARTER. Right, right. 

Mr. SALGUEIRO. This is just a move by our government to facilitate unions to get into industries that they don’t belong in, that 

they’ve tried to be in and they’ve never been able to crack because 

there’s just no need for unions in our industries. But they’re bound 

and determined that they’re going to get there and what they’re 

going to do, they’re going to destroy the industries. 

Mr. CARTER. Right. 

Mr. Weir, every one of you has talked about the relationships 

with your employees. I know that Zaxby’s is a Georgia company 

and is a community supporter. Zaxby’s, as all of you, has been very 

supportive of the community. Do you see that changing as a result 

of the franchise—not necessarily Zaxby’s franchisor, but just the 

fact that the small business ownership of it goes away? 

Mr. WEIR. I do—— 

Chairman ROE. Please be brief because he has exceeded his five 

minutes. 

Mr. WEIR. Yes, sir. 

I do, in several ways. One, just the sheer economic cost of having 

to change the model. Obviously we’re in business and we commit 

part of what we have left over after operational expenses to participate in the community and be charitable. I see that being tremendously impacted just by the additional onus of all the regulations 

and potential liability as well as having a hierarchy of stricter control. Things that we may do and understand on a local level may 

not be understood at the corporate office in Athens, Georgia, and 

it quickly washes away. That affects a whole community, it affects 

organizations like you mentioned with CASA, affects a lot of people 

in a lot of ways that you’d never see in a larger-level, but at the 

local-level have a tremendous impact on individual lives. 

Mr. CARTER. Right. Thank you, Mr. Weir. 

Mr. Chairman, I apologize, I yield back my exceeded time. Thank 

you. 

Chairman ROE. Thank the gentleman for yielding. 

Mr. Allen, you are recognized for five minutes. 

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Mr. ALLEN. Thank you, Mr. Chairman. 

Mr. Patel, when you build a hotel, do you own that ground and 

that building? 

Mr. PATEL. Absolutely. 

Mr. ALLEN. So you go and you get a loan for that. So you are 

at risk. 

Mr. PATEL. Absolutely. 

Mr. ALLEN. Okay. So maybe your hotel brand is maybe domiciled 

in a state that is a not—Georgia by the way is a right-to-work 

state. Does everybody understand how that works? But, so maybe 

your franchise is located in a state that is not a right-to-work state. 

And so under this rule, if I understand it, and, Mr. Mintz, you 

come in if I am going down the wrong trail here. 

But under this rule, as I understand it, if it is a co-employment 

agreement, that if that group in New York or wherever, in a state 

that is not a right-to-work state goes on strike, that in fact, your 

employees could walk off the job? 

Mr. PATEL. I’m assuming they could also have picket signs in 

front of my hotel. I don’t know. 

Mr. ALLEN. Okay, so they could shut your business down. 

Mr. PATEL. Absolutely. 

Mr. ALLEN. Okay. Mr. Mintz, that is against the law in Georgia. 

Mr. MINTZ. Well, the federal law, the National Labor Relations 

Act, protects secondary or neutral employers. The problem here, 

the web that is going to be created is you’re going to have links between the two employers that are separate but considered joint employer for purposes of the labor law. And that would enable someone to—some union—to engage in pressure tactics, picketing, and 

handbilling at Mr. Patel’s hotel in Georgia, but it might also allow 

them to engage in similar conduct at the Marriott headquarters or 

any other Marriott that’s located in Georgia or elsewhere. 

Mr. ALLEN. Exactly. 

Mr. MINTZ. That’s the true problem that’s created by this. 

Mr. ALLEN. So basically that could put you out of business and 

put you at risk of losing your business. 

Mr. PATEL. Absolutely. 

Mr. ALLEN. Okay. Well, that is the seriousness of what we are 

dealing with here. 

The other thing is that, you know, my family’s business is the 

construction industry and of course we use a lot of subcontractors, 

who are small independent businesses. Mr. Mintz, how would—for 

example, the way I understand this is, if this applies, that as a 

general contractor, that basically that labor would answer to me as 

a joint employer agreement and I could go tell that workforce to go 

do this or this against the will of the very subcontractor who is contracted to do the job. 

Mr. MINTZ. If the general and the sub are considered joint employers, you’re going to have influence and attempted control by 

the general over the sub’s employees. And you’re also going to have 

potential liability of the general for anything that the sub did or 

did not do, consistent or inconsistent with the labor and employment laws. And I think the impact of that is going to be that more 

and more general contractors or other employers, who use subcontractors—for instance, they are a manufacturing facility and 

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they use a sub to do their cleaning work—they are going to re-examine the value of that type of relationship. And even though that 

cleaning is not their core competency, they’re going to re-assess 

whether they’d rather have control and do the work in-house and 

thereby cut the relationship with the subcontractor out there. 

Mr. ALLEN. Mr. Weir, you have restaurants in other states? 

Mr. WEIR. Yes, sir. 

Mr. ALLEN. Do you have any restaurants in states that are not 

right-to-work states? 

Mr. WEIR. No, sir. We’re in all right-to-work states. 

Mr. ALLEN. Okay. So of course, Zaxby’s is headquartered in Georgia I believe, is it not? 

Mr. WEIR. Yes, sir, in Athens. 

Mr. ALLEN. Okay. So you would not be faced with say the issue 

that Mr. Patel would be faced with because of the situation here 

in Georgia and the ability for you to run your business as you see 

fit. 

Mr. WEIR. Potentially we could, sir. There are Zaxby’s restaurants that are now going into states that aren’t right-to-work 

and so if this was an expanded thing and we are all considered as 

one, the impact could be felt by all of us, is my understanding at 

least initially here. 

Mr. ALLEN. I did not think about that, but that is another issue. 

Because if you went into a state, for example, that organized a restaurant, then the same rules would then apply to every restaurant. 

Mr. WEIR. It seems that is what they’re wanting to do. 

Mr. ALLEN. Is that correct, Mr. Mintz? 

Mr. MINTZ. Well, it would depend on how the Labor Board defines the bargaining unit, which might be different than the scope 

of the employer’s practices. That depends on how much interchange 

there is between one group of employees and another group of employees. 

Mr. ALLEN. I yield back the time I do not have, Mr. Chairman. 

Chairman ROE. I think we will go ahead with a second round, 

if it is okay with everyone, to ask a couple more questions. 

One, on subcontractor, I am not in a franchised medical practice, 

but if I were, I subcontract out environmental services. We have a 

huge office building and we subcontract that out. With this ruling, 

I would then be in charge of the people coming in to clean my office 

up. I have never done that, I have had the subcontractors—I have 

a contract with them what I expect in the contract to do. So this 

absolutely changes the relationship between, as you pointed out, 

Mr. Allen, clearly. 

The other thing that was brought up and I think by Mr. Patel, 

was the cost of regulations. I am going to mention right now, as 

we know, it costs a lot to send your kids to school and it pains me 

to say that I have a friend at Vanderbilt, being a UT graduate, but 

I do. And the chancellor there is a friend of mine. He came to my 

office the other day and this was not just Vanderbilt, but he had 

a study with the University of Maryland, two-year colleges, small 

Christian colleges, for-profit colleges, about 20 of them. He found 

that Vanderbilt University, just complying with government regulations, added $11,000 per student per year to their tuition. Unbelievable. And that is going on with—I heard Mr. Salgueiro talk 

CEWDOCROOM with DISTILLER

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about complying with the ACA regulations, which we still do not— 

and I have read that bill in detail—and we still are trying to figure 

out what it really means, as you just said. We are not sure, as Mr. 

Patel said, what it means. 

I think I want to get something on the record here. Mr. Mintz, 

you said this as clearly as anybody, in your first two paragraphs 

of your summary, ‘‘Under current and well-established legal precedent, two employers are deemed ‘joint employers’’’—and this is decades old now—‘‘when two entitles share the ability to control or codetermine employees’ essential terms and conditions of employment.’’ Which would be hours of work, hiring, firing, what you do. 

I just heard three owners say that absolutely is not what happens. So under current law, the NLRB, along with the General 

Counsel, is totally changing a business model that affects 780,000 

franchisees and almost 9 million employees. That is what is about 

to happen. It is a very big deal. 

Mr. Mintz, did I understate that or overstate that, or did I state 

it correctly? 

Mr. MINTZ. You stated it correctly. We’re moving, the Labor 

Board, or the General Counsel for the Labor Board, would have the 

standard moved from direct control, which is the current requirement, to potential or indirect control. And then they also consider 

the industrial realities test, whether it’s necessary to have the larger secondary employer at the table because of the economic relationship with the other. 

Chairman ROE. Well, I think it has become clear to me. We held 

this hearing in Mobile, Alabama, two days ago and I have heard 

from similar business owners very similar commentary. And I 

think we know the end result of this, it is not good for employees 

and it is not going to be good for employers and business development. And you have already heard, because of what has happened 

with the ACA, Mr. Salgueiro has had to reduce the number shops 

and stores that he has open right now. 

I will now yield to Mr. Carter. 

Mr. CARTER. Thank you, Mr. Chairman. 

Mr. Mintz, we understand what impact this is going to have on 

these types of businesses, the franchisees, and franchisors. What 

about, are there any others that we are not seeing, are there any 

other industries that we typically would not think that this would 

impact that perhaps it would impact? 

Mr. MINTZ. I think it’s about as broad as you can paint that picture of potential impact. I just used one example of the manufacturing facility that has a contractor that does cleaning work. A facility might have drivers that they use for your local deliveries or 

over-the-road deliveries. Depending upon the contractual relationship and how that is structured, the General Counsel would use 

that even unexercised authority or control to find the two entities 

joint employers. And I think what is going to happen is that the 

one employer is going to look at the value of maintaining that and 

the risks of maintaining that and then reconsider whether or not 

he needs to have that relationship and that exposure or whether 

he wants to take that work back in. 

So I think anybody that functions as a subcontractor to another 

employer is at risk. Could be cafeteria service, any type of secCEWDOCROOM with DISTILLER

49 

ondary but required function at the main employer’s job site or 

within his business. 

Mr. CARTER. Right. 

Mr. Weir, you made a comment that I thought was interesting. 

You said that the franchisor’s liability is going to increase. Therefore, as you would expect and as anyone would expect, the 

franchisor’s control over the business itself would have to increase. 

That is only natural, correct? 

Mr. WEIR. Yes, very much so. 

Mr. CARTER. And this is where the ultimate problem comes in: 

if the franchisor, if their responsibility is increased, they are naturally going to have to have more control over that. 

Mr. WEIR. Very much so. 

Mr. CARTER. Which in this situation means that the small business owners have less control over it. 

Mr. WEIR. It does. And my fear with that as well is when that 

model changes like that, what is the incentive for the franchisor to 

franchise. You suddenly just have a bunch of corporate stores. You 

take away a lot of the entrepreneurial spirit of people who are able 

to grow things much faster than a corporate chain would. And so 

you have a huge economic stagnation created from that. 

Mr. CARTER. Mr. Mintz, that being the case, what gives here? 

What is the NLRB thinking? I mean what ultimately is their goal? 

Mr. MINTZ. I think they’re ultimately trying to expand the scope 

of people that are covered by it, and I frankly think that the General Counsel and his political allies are interested in expanding the 

collective bargaining relationships because of the deep trouble that 

organized labor finds itself in. It represents such a small percentage of the American workforce and it’s dwindling and they’re looking for some administrative vehicle to try to pump those numbers 

up. 

Mr. CARTER. Right. 

Again, I want to thank all of you for being here. This is invaluable, thank you. 

Mr. Chairman, I yield back. 

Chairman ROE. Mr. Allen, you are recognized. 

Mr. ALLEN. Mr. Patel, you touched little bit on what I am hearing from all in the small business community: compliance requirements. Does it, and has it, affected your ability to reinvest in your 

business and grow your business? 

Mr. PATEL. Yes. So to give you an example, on my drive over 

here, I mentioned to two of the people I was with, you know, we 

are very selective on where we invest. Before, it was more freelance 

to where let’s just do it. So we’ve already constricted ourselves to 

be more conservative on where we invest. So today, you know, I 

have eight properties, it could have easily been 10, which would 

have yielded maybe 50 more jobs. And we want—I want to go to 

sleep good at night, I don’t want to have to worry. So yeah, we’re 

more conservative today. 

You know, Silicon Valley has a new adjective out, it’s called ‘‘disrupt,’’ I’m sure guys know what it means and the story behind it. 

So Air B&B is a disrupter to the hotel universe today. If this 

passes, this will be a disrupt or a disrupter to the franchiseefranchisor model. And even though I haven’t talked to franchisors 

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about it in detail, I promise you they equally probably do not want 

to get involved in telling Mr. Salgueiro or Mr. Weir or Mr. Patel, 

this is your schedule for your upcoming week. They don’t want to 

be involved, they don’t know my labor market the way I know it. 

Mr. ALLEN. Mr. Salgueiro, from the standpoint of compliance and 

this continued threat by the federal government on the small business community, is it, in your opinion, keeping you from expanding 

your enterprise? 

Mr. SALGUEIRO. Already the numerous compliances that are on 

top of all of us are just earth-shattering. We spend countless hours 

and thousands of dollars. Just take the ACA, there are these new 

forms that have to be filed here by December that, you know, you 

have to get a lawyer to fill them out because if you don’t fill them 

out, you’re going to be fined and you’re going to be fined per employee. And in my case, that could be, you know, half a million dollars, it could be three quarters of a million dollars, and I’m out of 

business. 

So we’re already spending just an inordinate amount of time trying to react to all the compliance issues, you know, with E–Verify, 

with ADA, and just countless others that I will not mention right 

now. 

I just opened a restaurant today, I can tell you I would have been 

opened probably 10 days ago, but there’s a lot of inspections you’ve 

got, there’s a lot of hoops you have to go through, federal, state, 

and local. And you know, we don’t mind doing it, but it’s incredible 

when they tell you to rip out the whole wiring because it’s low voltage and it should be burial cable and those types of mundane regulations that no one ever told you about. 

But there’s no doubt, this will negatively affect all franchise businesses in America and franchising has been in America now for 

over 50 to 60 years, it has been the most successful way for people 

to open their own business and to get in business and to leave the 

middle class and to be able to give back to their communities and 

their states and their country. 

Mr. ALLEN. Mr. Weir, how about you? Is the federal government 

keeping you from growing your business and hiring more folks? 

Mr. WEIR. Very much so, and just a lot of the stuff that we still 

don’t know certainly scares us and causes us to really rethink just 

how big we want to get. And it does, it hampers us. You know, and 

the crazy thing with it, when you look at the franchising model in 

America, there’s no other model that’s created more millionaires 

and created the American Dream for more people, regular people. 

These aren’t people that already had something and expanded on 

it. They were often regular people. And I could give you countless 

stories of people in our organization or within the Zaxby’s brand 

who started out as very regular folks, team members, assistant 

managers, who have gone on to be able to own their own business 

and live out the American Dream. 

And to use a politically correct term, it’s the ultimate redistributor of wealth. You take a model where everyone shares in the 

profits and even someone who is an employee has the opportunity, 

much like Mr. Salgueiro, to see opportunity and to start out to 

build something, and that’s replicable so that people that are workCEWDOCROOM with DISTILLER

51 

ing for him now, in 10 or 20 years, can do the same thing. For the 

life of me, I don’t see why you would want to prevent that. 

Mr. ALLEN. Well, I want to thank all of you for your courageous 

testimony this morning. I mean, we love this country and we want 

to make this country better. And one of the problems, Mr. Chairman, we have in this country today is jobs. We have got to put people back to work. And I want to thank you for helping us do just 

that, because this goes on the record, we will carry it back to 

Washington, and I promise you we will do everything we can to 

help you create jobs. 

Thank you. 

Chairman ROE. I thank the gentleman for yielding. 

I will now ask Mr. Carter if he has any closing remarks. 

Mr. CARTER. Thank you, Mr. Chairman. 

Again, I want to thank you, Mr. Chairman, for your leadership 

in Congress and particularly on this issue, and for coming down 

here. Again, as I said in the opening, instead of you going to Congress, Congress is coming to you. We need more of this, and we 

want more of this. We want to hear from you. You know, the best 

thing the government can do is get out of the way. And quite often, 

we are the problem; we are getting in the way. 

So, I thank all of you for your testimony, thank all of you for attending, and thank you, Congressman Allen, I appreciate you being 

here as well. 

Again, we are here to help—I know, we are from the government, 

and we are here to help. I know the irony in that. 

[Laughter.] 

Mr. ALLEN. You did not have to say that. 

Mr. CARTER. I know. But truthfully, we do want to help you. You 

are the backbone of our economy. 

Thank you, and I yield, Mr. Chairman. 

Chairman ROE. I thank the gentleman for yielding. 

Mr. Allen, do you have any closing remarks? 

Mr. ALLEN. I just again would like to say thank you to our panel 

for their courageous testimony here today. 

You know, all I want to encourage you folks to do is hang in 

there. You know, we are fighting a good fight. 

Mr. Chairman, thank you. Thank you for coming down here in 

God’s country. Like I said, our colleagues in the United States Congress are very envious of us down here in Georgia and that is because of what you are doing. You are sticking in there, you are taking risks to create jobs and we deeply appreciate that. Please keep 

it up, and we are going to do everything we can to try to keep the 

federal government off your back. 

Chairman ROE. I thank you. 

And I want to thank again our panel. You all did a tremendous 

job here today. I too am a small business owner, went out 30-something years ago, hung a shingle up, started my medical practice, 

and we grew it. The biggest asset you have in your business are 

your employees, no doubt about it. The worst day of my life is when 

my nurse decided to stop and go somewhere else. As a matter of 

fact, it got so bad I married one, my nurse, I did not want to lose 

her. 

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52 

Anyway, you know, I see the over-reach of government and the 

cost of regulations and so forth. I mentioned at Vanderbilt. We did 

a field hearing—I have done these around the country and it is 

great to do it in a part of the country where I understand everybody, that is also good. When I go up north, it is little harder for 

me to understand them and them me. 

But there was an agency that went into a surface mine and 

gave—a surface mine now—and gave an MSHA violation for a twopronged toaster in the office. That is past ridiculous when that 

happens. And that is just somebody checking a box to maintain a 

job. That does not add anything to benefitsafety, it does not add 

anything. Look, we do need some rules and regulations and safety 

in places. I toured a number of factories last week, unbelievable the 

difference in the factories in this country today than there were 

when my dad worked in a factory from World War II on until he 

passed. So it is much safer, a much better work environment because for that factory, for my office, for your businesses, the single 

most important asset you have are the people working for you, no 

doubt about it. And we have had employees in our office that have 

been with us almost 40 years so we try to create a work environment because I understand how important those folks are. 

I think this is just another assault by the federal government on 

small business. And look, our problem—we have a deficit in Washington, D.C. Let me tell you who can fix the deficit, I am looking 

at it right here. Business can fix the deficit. We raise the GDP 

from two to three, three and a half percent, the deficit goes away, 

jobs get created, people get to work, and we have more money coming into the federal government. We will solve the problem in doing 

that. 

And Mr. Salgueiro, you mentioned about filling out that form— 

welcome to Medicare. I have been dealing with that for almost 40 

years. If you think you have a problem filling forms out, you should 

try to be on the Medicare side. 

I want to thank the people here at the Coastal Georgia Center 

and certainly the incredible hospitality you all have shown us in 

South Georgia. It would be a privilege for me to come back here 

again. 

With no further comments, the meeting is adjourned. 

[Whereupon, at 11:25 a.m., the Subcommittee was adjourned.] 

Æ 

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