Apr 4, 2016 - Blog by |

Is your franchisor your joint-employer under the labor laws? Currently pending before the US Congress is a bill that would prevent the NLRB from applying the NLRA to franchising. There is currently great uncertainty over the question of whether a franchisor can be held accountable for its franchisees’ labor and employment obligations under the NLRA. On the one hand, the NLRB is currently seeking to hold McDonald’s, as a franchisor, liable for violations of the NLRA; on the other hand, the NLRB’s Office of General Counsel has issued an Advice Memorandum in the Freshii case concluding that the fast-casual restaurant chain Freshii did not qualify as a joint employer for its franchisee’s unfair labor practices violations. Although resolution of the joint-employer dispute has the potential to impose real costs on franchising as a distribution model, it is not likely that the upshot will threaten the existence of franchising, as argued by some franchisor advocates.

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