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"Business groups and conservative activists" led by the International Franchise Association, which was founded by franchisors, are fighting to undo the National Labor Relations Board joint employer ruling by lobbying at state legislatures. They have succeeded in getting state lawmakers to pass legislation that defines the relationship between franchisor, franchisee and franchisee employees away from joint employer.
South Dakota Gov. Dennis Daugaard last week made the Mount Rushmore state the 10th in the last two years to adopt a law that explicitly says that large franchisers are not legally responsible for workplace violations by their franchisees. "Notwithstanding any other provisions of law or any voluntary agreement between the United States Department of Labor and a franchiser, a franchisee or an employee of a franchisee is not considered an employee of the franchiser," the South Dakota law says. — Sean Higgins, Washington Examiner
Does this mean that the NLRB ruling can be undone by state action?
It is a long-standing legal principle that state laws such as South Dakota's cannot override federal regulations. They can only direct state agencies.
Steve Bernstein, a management-side attorney for the law firm Fisher & Phillips, said major legal disputes regarding workplace issues rarely happen at the state level. The activity is usually in the federal courts. "This looks to me to be the type of legislation that is put in there mostly for symbolic reasons," he said. — Higgins, Washington Examiner