Bill to Better Protect Trademarks

September 5, 2018

On Aug. 31, House Small Business Committee Chairman Steve Chabot (R-Ohio) and Rep. Henry Cuellar (D-Texas) introduced H.R. 6695, the Trademark Licensing Protection Act of 2018, which clarifies that licensing trademarks, and controlling or exercising those trademarks, do not create an employment relationship.

The legislation was introduced in order to strengthen the protections of small businesses, particularly, franchisees, in order to ensure those they employ have the provisions and protections they need available to them without risking being considered a joint employer. For more than 30 years, the National Labor Relations Board (NLRB) used one standard to determine whether two separate businesses were joint employers. In 2015, the Obama-era NLRB abandoned this standard. According to Reps. Chabot and Cuellar, the ambiguity of the new standard threatens small businesses and entrepreneurs, and is why they introduced the measure.

According to the lawmakers, the Trademark Licensing Protection Act will provide our nation’s small and franchise businesses the certainty necessary to grow and invest in the future of their employees. The bill aims to clarify varying standards to allow for franchise businesses to grow, train workers, and strengthen local economies. Franchisees and franchisors continue to face significant legal and compliance costs, resulting in a chilling effect on economic growth and support for existing franchisees since the joint employer uncertainty began.

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

The Committee first held a roundtable in April 2015 on the issue. In March 2016, the Committee held a hearing titled, “Risky Business: Effects of New Joint Employer Standards for Small Firms” to examine the negative impact of the rule on small businesses.