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Dear Chairman Lopez and Members of the House Labor & Commerce Subcommittee #2: As a proud franchisee and small business owner in Virginia, I am writing to express my strong opposition to SB 798. This legislation threatens our Commonwealth’s growing franchise economy by imposing extreme restrictions on non-compete clauses, which will lead to unfair competition, discourage investment, and create unnecessary legal battles that hurt small business owners like me. Franchising is a key driver of Virginia’s economy, supporting over 246,500 jobs, 23,089 franchise locations, and generating more than $24 billion in annual economic output. Furthermore, Virginia was recently named the #3 state for franchise growth, a testament to the fair and balanced regulatory environment that has allowed entrepreneurs like me to thrive. SB 798 threatens this success by making it harder for franchisors to invest in Virginia, limiting business opportunities, and weakening protections for existing franchise owners. One of the most damaging aspects of SB 798 is its broad and unjustified restriction on post-term non-compete clauses. These agreements are a fundamental part of franchising because they prevent former franchisees from immediately using the same brand recognition, operational methods, and marketing strategies to unfairly compete in the same market. If SB 798 becomes law, a former franchisee could walk away from their agreement, open a nearly identical business next door, and capitalize on the very system they just benefited from—undermining existing franchisees like me who continue to operate within the system fairly. Reasonable, narrowly tailored post-term non-compete clauses are necessary to protect both franchisees and franchisors. They ensure that those who have invested their time, money, and effort into building a business under a recognized brand are not put at an unfair disadvantage by competitors who were once part of the same system. This overreach will ultimately harm small business owners who rely on a level playing field. I urge you to oppose SB 798 and protect the integrity of Virginia’s thriving franchise sector. The current system allows for fair partnerships between franchisees and franchisors while ensuring economic growth and job creation. This bill would disrupt that balance, hindering business success and discouraging investment in our state. Thank you for your time and consideration. I welcome the opportunity to discuss this issue further and share how franchising has positively impacted my business, employees, and community. Sincerely, Don Williams

February 10, 2025 Virginia House Labor & Commerce Subcommittee #2 RE: Oppose SB 798 - Retail franchise agreements; governing law, competition restrictions. Chairman Lopez and Members of the House Labor and Commerce Subcommittee: The International Franchise Association (IFA) represents over 12,000 franchisees, franchisors, and suppliers across the country. In Virginia, the franchise industry plays an important role in the economy, providing good jobs to 257,000 residents and has a vast footprint across the Commonwealth with over 24,000 franchise locations generating roughly $25.7 billion in economic output. In fact, Virginia is predicted to be the #3 state for franchising growth in 2025. We are writing today in opposition to S.B. 798. SB 798 would impose the most severe restrictions on non-compete clauses in franchise agreements than any other state, extending beyond the franchise agreement to settlement of disputes between a franchisor and franchisee. Ultimately, this bill will lead to costly and unnecessary litigation for small business franchise owners, discourage franchisors from entering into new franchise agreements because they will not be able to protect their proprietary and intellectual property, thereby leading to fewer opportunities for entrepreneurs looking at franchising as a path to starting their own business. Further, franchisees often support non-compete clauses to prevent former franchisees from using the franchise system’s operating methods, marketing strategies and customer contacts to compete unfairly in the same market. By undermining the fair and balanced Virginia Retail Franchising Act, the bill threatens the franchise model and the Commonwealth’s growing franchise community. The North American Securities Administrators Association (NASAA), a non-profit, non-partisan organization that advises states on regulatory matters concerning franchising, recently updated its guidance on post-term non-compete clauses in franchise agreements, concluding that "post-term non-competes should be narrowly drawn and reasonable in scope, duration and territory.” SB 798 goes too far by outright eliminating non-compete clauses in franchise agreements. For the reasons stated above, we respectfully request that the committee reject S.B. 798. Respectfully, Matthew W. Kagel Director, State & Local Government Relations International Franchise Association

I am David E. Balducchi, retired from the U.S. Department of Labor, and an Advisory Board member of Social Action Linking Together (SALT). I strongly support Senator Ebbin’s bill, SB 1057, to increase the income disregard of wages paid during a week claimed in calculating unemployment benefits. All states disregard some earnings as an incentive to take part-time or short-term work. The purpose of the earnings disregard is to allow unemployed workers to pick up part-time work that supplements their cash shortfall due to lack of full-time work, without severely reducing their unemployment benefits. National policy experts have recommended that the earning limit placed on claimants should be set to give claimants a real incentive to work, which can lead to full-time work. In Virginia, the income disregard of $50 was last revised in 2005. At the time, the minimum hourly wage in Virginia was $5.15. Currently, the minimum hourly wage is Virginia is $12.41. The income disregard has not kept pace with hourly wage growth, and it should be doubled to stimulate active work searches. Thank you.

Available as a general resource. VWC has no position on this bill. It would not create any administrative burden.

This is Robert Rapaport of the Virginia Workers' Compensation Commission available to speak on this bill as needed.

This is Commissioner Rapaport of the Virginia Workers' Compensation. I am available to address any questions that there may be pertaining to SB 1299.

SENATE BILL 1299 COMMENTS ATTACHED

Senate Bill No. 1299: The Brandon Nutter Bill • Senate Bill No. 1299 amends the Virginia Workers’ Compensation Act to provide employees who are unmarried and have no children with workers’ compensation benefits in the event the employee is killed at work. • The purpose of the Bill is to make Virginia a safer place to work for employees by increasing the penalties for employers who cause the death of an employee and to bring Virginia in line with the modern trend in the United States which grants employees additional remedies. • Brandon Nutter was crushed to death on July 7, 2022, at the Spotsylvania County Convenience Center after his manager told him to repair a trash compactor. The Virginia Occupational Safety and Health Office investigated his death and fined Spotsylvania County almost $300,000 for 7 major safety violations, two of which were wilful. Brandon was only 28 years old. • A grand jury reviewed the case and the employers’ manager was indicted for involuntary manslaughter. • Under the Act, Brandon’s estate is entitled to only $11,000 in benefits for funeral expenses despite the egregious conduct of the employer’s manager. See Va. Code Section 65.2-512 B. The trivial amount of the payment undermines the dignity and value of human life in this Commonwealth. His family has no other legal remedies against the employer at this time to compensate them for their grief, loss, and sorrow. • The Act as it reads now is patently unfair: it denies employees any remedies even if the employer is guilty of gross negligence or wilful misconduct: but it grants employers numerous remedies to reduce or deny employees benefits if the employee engages in wilful misconduct. • Inexplicably, NO provision in the Virginia Act punishes employers for any misconduct whatsoever. The Act has been transformed into an employer’s protection law. • Other states have recognized this inequity and have amended their worker's compensation acts to permit employees to receive additional benefits: • Arizona gives its employees the option to sue or collect benefits if the employer is guilty of wilful misconduct. Ariz. Rev. Stat. Ann. Section 23-1022 (A) and (B). Copy attached. • Kentucky, Oregon, Washington, and West Virginia permit employees to sue if the employer causes an intentional injury. KY. Rev. Stat. Section 342.6104 (4); Or. Rev. Stat. Section 656.156(20; Wash. Rev. Code Section 51.24.020; W. Va. Code Section 23-4-2. Copy attached. • Texas allows employees to file suit if the employer is guilty of a wilful act or gross negligence. Tex. Labor Code Section 408.001. Copy attached. Under the Bill, the heirs of a deceased employee with no spouse or children would receive the same benefits that a worker with a spouse or children would receive. Submitted by, Charles B. Roberts, on behalf of the Brandon Nutter Family.