Practical Steps For Franchisors To Avoid Joint Liability

With its August decision in the Browning-Ferris case, the National Labor Relations Board widened its working definition of joint-employer, and franchisors are having to take notice. The case involved a staffing company and did not explicitly apply to franchisors, but the NLRB will invoke the newly established criteria as it targets McDonalds as a joint employer in a number of pending cases, says a post from Dorsey & Whitney. It also notes this is far from settled law, and that in the meantime two Republican Congressmen have introduced a bill (The “Protecting Local Business Opportunity Act”)  that would roll back the Browning Ferris decision. Still, it’s to be expected that for now the NLRB “will be testing franchise systems on a case-by-case basis, under its new joint employer standard, to see if franchisors are ‘indirectly’ controlling their franchisee’s employees.” In light of that, the writer lists a number of Do’s and Don’ts for franchisors, to reduce their risk of becoming jointly or vicariously liable.