Prominent members of Arizona’s business community on Tuesday voiced their strong concerns over President Joe Biden’s nominee to be the next secretary of labor.
Julie Su became deputy secretary of labor under former Sec. Marty Walsh in 2021. After Walsh left to become the head of the NHL Players’ Association, the White House nominated Su to ascend to the secretary post.
But it’s Su’s tenure as secretary of the California Labor and Workforce Development Agency that has caused the most concern among employers due to Su’s support for policies long championed by organized labor, including her support for California’s AB5, which attempted to dramatically curtail employees’ right to classify themselves as independent contractors rather than regular employees.
In a press conference hosted by the International Franchise Association (IFA) on Tuesday, Arizona business leaders discussed the objections that the franchise industry and others have to Su’s nomination.
IFA President and CEO Matt Haller addressed concerns that Su would want to revisit the joint-employer rule, which the Obama administration supported, saying that it would effectively turn a franchisee into nothing more than a middle manager.
Under the joint employer rule, there is little distinction or separation between a franchisee and a corporate parent.
“If a franchise brand is now a joint-employer by statute, as the state of California has proposed for the restaurant industry in the Fast Act, it eliminates the equity the franchisee has built in that business and it eviscerates the franchise model,” Haller said.
The Arizona Trucking Association also opposes Su’s nomination, citing her policies in California like AB5 that harmed independent owner operators. Tony Bradley, president of the Arizona Trucking Association, spoke to reporters on why the trucking industry depends on independent contractors instead of regular payroll employees.
“The biggest thing is capacity. Freight is not steady; it ebbs and flows and so we utilize independent contractors during those ebbs and flows. That is a critical part of a business structure and it has been since trucking began,” Bradley said.
Su’s nomination was advanced by the Senate Health, Education, Labor and Pensions Committee last month on an 11-10 vote. Senate Majority Leader Chuck Schumer, D-N.Y., has not brought the nomination to a floor vote, however, due to the prolonged absence of Sen. Dianne Feinstein, D-Calif., and because of reported discomfort about Su’s progressive record among some Democrats who have not yet indicated whether they’ll support the nomination, among them Sen. Kyrsten Sinema, I-Ariz., and Sen. Mark Kelly, D-Ariz.
Arizona Chamber of Commerce & Industry President and CEO Danny Seiden said that while the Chamber rarely weighs in on executive agency nominations, Su’s track record should concern anyone who cares about the small business community and the overall economy in this time of record high inflation.
“The Chamber has reached out to the offices of Senator Sinema and Senator Kelly with our concerns over Ms. Su’s nomination. We found them in the past to be very receptive to issues of the economy and we’re hopeful they will take our members’ concerns into consideration. We encourage them and their colleagues in the Senate to give Ms. Su’s resume a very close look,” Seiden said.
The AFL-CIO in April launched a paid digital media campaign in Arizona in support of Su in hopes the state’s two senators will be swayed by the messaging in the labor union’s messaging.
“The AFL-CIO and our allies will fight tooth and nail to ensure Julie is confirmed because she’s the right person at the right time to move our nation’s workforce forward,” AFL-CIO President Liz Shuler said.
In the press conference on Tuesday, however, Haller reiterated concerns from the Arizona business community that Su’s nomination represents a threat to the franchise business model.
“We think that model should be championed and not something that should be dismantled to satisfy organized labor’s political objectives,” Haller said.