Good News For Franchisers From The NLRB

The final rule regarding joint-employer status under the National Labor Relations Act, issued late last month by the National Labor Relations Board and scheduled to become effective on April 27, will be welcomed by many companies, and in particular by franchisers. A key provision, explains this post from Littler, says that joint employer status is contingent on a company’s having “substantial direct and immediate control” over essential terms and conditions of another company’s employees. These essential terms and conditions are wages, benefits, hours of work, hiring, discharge, discipline, supervision, and direction. The new rule reverses the 2015 NLRB ruling in Browning-Ferris Industries of California, Inc., which had broadened the definition so joint employer status could be based on indirect control, or control that was limited and routine. Opponents of the new rule have criticized the NLRB’s process in promulgating it, and it remains to be seen if there will be legal challenges.