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

HomeTeam Inspection Service

Photo of HomeTeam Inspection Service representative giving presentation

Strategic Partnerships Fuel Franchise Growth at HomeTeam Inspection Service

hometeam-inspection-service-franchise-growth-partnerships

Express Employment Professionals

What’s in the 2025 FDD? A Closer Look for Express Employment Professionals Franchise Buyers

whats-in-the-2025-fdd-a-closer-look-for-express-employment-professionals-franchise-buyers

petbar

How-petbar-Makes-Pets-and-Their-Owners-Happy-as-Part-of-the-Family-in-a-Clean-and-Fun-Environment

How petbar Makes Pets and Their Owners Happy as Part of the Family in a Clean and Fun Environment

petbar-franchise-opportunity-boutique-pet-grooming

petbar Franchisees Win the $6.89B Global Market With Complete Transparency, Self-Service and Membership Models, Creating the Happiest Place for Dogs

petbar-franchise-opportunity

Why petbar Wants to Be the “Disney World for Dogs” — and a Dream Business for Franchisees

petbar-franchise-dan-ashley-o-loughlin-qa

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

Chick-fil-A Tops Customer Satisfaction Rankings for 11th Year as Challenger Brands Gain Ground

chick-fil-a-tops-customer-satisfaction-rankings-for-11th-year-as-challenger-brands-gain-ground

Technomic Releases Annual Ranking of the Top 15 Fast-Food Chains in the U.S.

technomic-releases-annual-ranking-of-the-top-15-fast-food-chains-in-the-us

Rising Jobless Claims Could Signal Challenges — and Opportunities — for Franchising

rising-jobless-claims-affect-franchising

Hardee’s Lawsuit Highlights the Risk of Going Off-Model in Franchising

hardees-franchise-lawsuit-paradigm-investment-group

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

The Ultimate Guide to Selling Franchises: How To Create a Strong Incentive

how-to-build-strong-incentives-to-attract-prospective-franchisees

Top 25 Franchise Marketing Leaders: Carol DeNembo — Chief Marketing Officer, Mountain Mike’s Pizza

top-25-franchise-marketing-leaders-carol-denembo-chief-marketing-officer-mountain-mikes-pizza

Brian Curin - Little Kitchen Academy - Franchise Marketing Leaders - 1851 Franchise

Top 25 Franchise Marketing Leaders: Brian Curin — Chief Executive Officer/Chief Marketing Officer, Little Kitchen Academy

little-kitchen-academy-marketing-leader-brian-curin

The Ultimate Guide To Selling Franchises: How to Leverage Franchise Expos

how-franchisors-can-leverage-franchise-expos-to-drive-success

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

NLRB Upends Joint Employer Standard for Franchise Business Owners

MORE STORIES LIKE THIS