1851

The National Labor Relations Board on Thursday altered the joint employer standard, dramatically changing the way franchises do business and opening them up to further liability.&nbsp;<div>The move potentially makes it easier for unions to organize employees of franchisees and subcontractors by forcing corporations to the bargaining table.&nbsp;&nbsp;The new standard also means corporations can be held legally liable for workers if franchisees or subcontractors break labor law. Industry groups are scrambling to respond to the decision and to fight it.&nbsp;</div><div>&nbsp;</div><div>The International Franchise Association criticized the decision that declared Browning-Ferris Industries to be a joint employer with Leadpoint, a staffing services company. IFA said the decision ignores nearly 50 years of bipartisan policy and decades of court and regulatory rulings and will ultimately harm the national economy.</div><div>&nbsp;</div>&#8220;The NLRB today satisfied the politically motivated requests of organized labor and manufactured a new joint employer standard that small businesses have long been bracing for," said&nbsp;IFA President and CEO Steve Caldeira. "In doing so, the board ignored decades of judicial precedent and bipartisan policy agreement dating back to the Johnson Administration to invent new labor law. The Browning-Ferris decision is proof that the NLRB may target parties to any business contract in pursuit of their ideological agenda of promoting unions above all else. The ruling jeopardizes small employers in numerous sectors and the future viability of the franchise model of doing business."&#8220;The board&#8217;s tortured analysis will undoubtedly be met with skepticism and will be rejected by local franchise owners, legislators and, ultimately, the courts,&#8221; Caldeira added. &#8220;IFA and its allies are asking Congress to intervene to halt these out-of-control, unelected Washington bureaucrats to preserve the established joint employer standard relied upon by America&#8217;s 780,000 franchise businesses and the 8.5 million jobs they directly create.&#8221;According to long established practice and law, local franchise owners control their own hiring practices, working conditions, wages, and hours of operations and file their own taxes. None of these decisions are controlled by the brand company, IFA said. Each local franchise business owner operates a separate company independent of the brand company. It is clear that franchise employees are completely independent of the brand company, IFA argued.&nbsp;Under the new ruling, the NLRB would consider a whole multitude of factors &#8211; completely unrelated to employees&#8217; condition of employment &#8211; as indicative of joint employment. Prior to today, to be deemed a joint employer, two or more companies must have exercised direct operational and supervisory control over an employee. Under this new interpretation, the NLRB is expanding that and applying a broader &#8220;economic realities&#8221; test to include &#8220;indirect control&#8221; or even &#8220;potential, unexercised control," IFA pointed out.&nbsp;These changes to the joint employer standard could impose new collective bargaining obligations and allow unions the ability to strike or picket a large entity compared to the location where there is a dispute. The new standard would also increase the likelihood of union &#8220;campaigns&#8221; against national businesses, while forcing small businesses to become engaged in protracted, unnecessary and costly legal battles, IFA said.&nbsp;

1851 Franchise

The board's decision opens franchises up to increased bargaining and legal liability. 

This brand page has been paid for by 1851. Content within this page that is paid will showcase a Sponsored icon. This means the brand has engaged 1851 FRANCHISE to write the content. Content without the Sponsored Icon is aggregated media placements the brand earned. Questions can be sent to editorial@1851franchise.com

NLRB Upends Joint Employer Standard for Franchise Business Owners       

nlrb-upends-joint-employer-standard-for-franchise-business-owners

BooXkeeping

From Ice Cream to Income Streams: How Greg Cox Found His Sweet Spot with BooXkeeping

from-ice-cream-to-income-streams-how-greg-cox-found-his-sweet-spot-with-booxkeeping

Children's Lighthouse

Children’s Lighthouse Named Among America’s Best in Customer Service by Newsweek

childrens-lighthouse-named-among-americas-best-in-customer-service-by-newsweek

KLA Schools

How KLA Schools Is Redefining Early Childhood Education Through a Hands-On, Academically-Rich Approach

how-kla-schools-is-redefining-early-childhood-education-through-a-hands-on-academically-rich-approach

Why Tennessee Is a Strategic Growth Market for Children’s Lighthouse

why-tennessee-is-a-strategic-growth-market-for-childrens-lighthouse

Comfort Keepers

Comfort Keepers Eyes Salt Lake City for Expansion: Meeting the Rising Demand for In-Home Senior Care in Utah

comfort-keepers-eyes-salt-lake-city-for-expansion-meeting-the-rising-demand-for-in-home-senior-care-in-utah

Buying a Franchise Masterclass

 Franchise Opportunities

Get Support Buying a Franchise

How to Buy a Franchise White Paper

How to Buy a Franchise

How to Sell Franchises

How to Grow a Franchise

Find a Franchise Supplier

1851 Franchise Opportunities

Franchisor News

Franchisor Power Rankings

FranCamp Mastermind Summit

Franchise Development Website Builder

Franchise Resources

What ALEC-Laffer's Report Means for Franchising

Website Awards

Power Rankings

About 1851

Advertise on 1851

Contact 1851 Editorial

Terms of Use

1851 Login

GROWTH CLUB LOGIN

facebook

instagram

twitter

linkedin

youtube

McDonald’s Launches New Extra Value Meals as Consumer Demand for Value Continues to Climb

mcdonalds-launches-extra-value-meals

Power Eats: Smoothie King Rolls Out Food Nationwide To Fuel Franchise Growth

smoothie-king-food-menu-power-eats

Keurig Dr Pepper Splits in $18 Billion JDE Peet’s Deal, Creating Global Coffee Giant

keurig-dr-pepper-splits-in-18-billion-jde-peets-deal-creating-global-coffee-giant

McDonald’s Rolls Out Major Value Push To Win Back Customers Amid Inflation

mcdonalds-rolls-out-major-value-push-to-win-back-customers-amid-inflation

Photo of Paris Baguette pastries and beverages 

Paris Baguette Celebrates 250th Café Opening in Frederick, Maryland, Accelerating Expansion and Reviving the Neighborhood Bakery Café

paris-baguette-250th-north-america-cafe

Amanda Evans - Stellar Service Brands - Franchise Marketing Leaders 2025 - 1851 Franchise

Top 25 Franchise Marketing Leaders: Amanda Evans — Senior Vice President of Marketing, Stellar Service Brands

stellar-service-brands-marketing-leader-amanda-evans

Before You Franchise: Answers to the Top 5 Questions of Franchisors-To-Be

questions-before-franchising-business

Top 25 Franchise Marketing Leaders: Jack Mashini — Co-Founder, Wing Snob

top-25-franchise-marketing-leaders-jack-mashini-co-founder-wing-snob

Mike Revak - Chief Business Officer - Sky Zone - Franchise Marketing Leaders - 1851 Franchise

Top 25 Franchise Marketing Leaders: Mike Revak — President and Chief Business Officer, Sky Zone

top-25-franchise-marketing-leaders-mike-revak-chief-business-officer-sky-zone

Hooters Leans Into Franchising With Closure of 30 Company-Owned Stores - Agg - 1851 Franchise

Hooters Leans Into Franchising With Closure of 30 Company-Owned Stores

hooters-franchise-model-company-owned-closures

graphic image of a franchisee spotligh aman kaur of voodoo brewing

How This Trio of Friends Is Brewing Up Community With Voodoo Brewing Co. in Prosper, Texas

voodoo-brewing-franchisee-aman-kaur-prosper-texas

Franchise Deep Dive graphic with i9 Sports logo

i9 Sports Franchise Costs, Fees, Profit and Data for 2025

i9-sports-franchise-cost-fees-profit

Hely and Hiral Patel Bring Their Longtime Dream to Life With The Brass Tap

brass-tap-franchise-pasadena-maryland-hely-hiral-patel

Franchisee spotlight graphic with photo of Ricki Oberoi and Layne's Chicken Fingers logo

Multi-Unit Wendy’s Operator Signs 12-Unit Deal With Layne’s Chicken Fingers

ricki-oberoi-laynes-chicken-fingers-growth

How Vishal Juneja Turned a Family Tradition Into a Paris Baguette Franchise

How Vishal Juneja Turned a Family Tradition Into a Paris Baguette Franchise Built on Heart and Community

paris-baguette-franchise-rockaway-new-jersey-vishal-junjea

NLRB Upends Joint Employer Standard for Franchise Business Owners

MORE STORIES LIKE THIS