CFA Urges Franchisees to Oppose the NLRB's Joint Employer Definition

Last week, the U.S. House Labor Appropriations Subcommittee approved its annual spending bill for fiscal year 2016. Included in this bill is a provision that prevents the National Labor Relations Board (NLRB) from enforcing its joint-employer standard, which redefines the franchisor/franchisee relationship and, if not defunded, would destroy the franchise business model. The Coalition of Franchisee Associations (CFA) is asking all franchisees to write to their Members of Congress and ask them to support the joint employer provision in the House and Senate appropriations bills.

CFA  has been actively involved in opposing the joint employer ruling since July 2014, when NLRB General Counsel Richard Griffin released a memo which allows administrative law judges to hold McDonald's Corp. and McDonald’s franchisees jointly liable in regards to labor cases pending against individual franchisees. On December 19, 2014, the NLRB made good on its memo by issuing 13 complaints naming McDonalds corp as joint employer with the franchisee.

The current standard on determining joint-employer status hinges on whether both parties  control the essential terms and conditions of employment, which include hiring, firing, discipline and other forms of direction. The NLRB, however, suggests a new, more broad standard which would expand the definition of “joint employer” to  include “indirect”  or even “potential” control.

As one of our key legislative priorities and as a partner organization of the Coalition to Save Local Businesses, CFA has expressed its concerns that attempts to redefine “joint employer”  are direct threats to the franchise model and would make it much easier for unions to organize franchised businesses. It will force franchisors to exercise unprecedented control over franchisees and destroy the independence that has made the franchise model work for decades. Further, this new standard will significantly increase the number of lawsuits filed, as complainants will be looking to the “deep pockets” of the franchisors; little do they know it is the franchisee who will be paying because of the indemnification clause he or she signed via their franchise agreement.

While CFA is aware that some brands may already be jeopardizing the independent contractor status of the franchisor/franchisee relationship due to overly controlling behavior, we believe the joint employer proposal will only exacerbate the problem. CFA continues to strongly support increased franchisee rights and protections from overreaching franchisors on both  the state and federal levels, but does not believe the joint employer direction is the correct solution.

For these reasons and many more, CFA urges you to contact your representative and senators and urge them to support the joint employer provision in the House and Senate appropriations bill. Click here to write to your members of Congress and ask them to protect your business by defunding the NLRB's joint-employer rule!

For more information about the CFA, go to www.thecfainc.com.

Comments

Thank you for the franchisee voice, CFA

Franchisers have a different interest in the issue, but thank you for pointing it out where Zor and Zee interests align and fighting for ours.

Permission?

Did CFA check with its senior partner's at SEIU before they came out against joint employment. How odd that after inviting SEIU to target franchising CFA is trying to cover its ass-ets.

Um, are you medicated, freeloader? CFA= the ONLY investors

The CFA is the only group with any actual skin in the game. Pony up, or shut up.
Oh, right. You are afraid of losing your job. It might take a few weeks to find another.

Investors.

Franchisees most certainly are major investors in franchising. Explain then why CFA allowed Miller to cozy up to SEIU to destroy those franchisee investments. He is the cause of just so much damage by his actions and words

Re: Investors

His was not a CFA position or action. You can read it for yourself. It has been posted here for a while. Mr. Miller's statement about your question:

http://www.bluemaumau.org/statement_franchise_survey_call

Re re investors

The fact is he was in the call and did not push back at any time on the call. He also was representing CFA as he never said he was there personally and not in his association capacity. Even as an individual his position was against the interest of franchisees. Sooooo CFA did not dismiss him and he was forced to issue a mea culpa. Damage he did cannot be undone and franchisees will be hurt because of it. Not the sharpest tool in the box and this time that lack of capability and judgement really caused damage. You want to support him and that is fine. But facts are facts in this instance.

CFA wants to have it both ways

CFA wants to have it both ways, but that's not how the game works - and it's a dangerous game they are playing with hundreds of thousands of businesses at stake.

If Branca or the other CFA leadership wanted to boot Miller out of CFA leadership, they would have done it already - but no one else wants his job (and who could blame them?).

Franchisees who think that SEIU has their interests at heart should be careful - they are a wolf in sheep's clothing.

Franchisees need to take a step back see the the CFA for exactly what they are - a pawn in the SEIU's master plan to grow their membership through the Fight for $15 which is targeting restaurants, c-stores, home care workers and other service sector franchises.

By aligning with CFA on state franchise relationship bills like in CA, SEIU is able to publicly show legislators they have support from "business" AND employees. This gives SEIU credibility for policymakers to pass legislation like AB 525 and the forthcoming federal franchise bill of rights referenced in Misty's blog.

These bills are simply a means to an end for SEIU - bringing unions one step closer to collective bargaining through the franchise contract process for an entire system of workers. Thanks to the broader NLRB joint employer standard that will be adopted in the Browning Ferris case, these employees work for the franchisor and the franchisee now, not just the franchisee.

How does the CFA defend this to their members when, thanks to this unholy alliance they have forged with the SEIU in exchange for balance in "control", franchisees now have a union shop steward controlling their employees salaries, benefits and schedules, rather than the franchisee?

Incoherent

One visitor says:

"Thanks to the broader NLRB joint employer standard that will be adopted in the Browning Ferris case, these employees work for the franchisor and the franchisee now, not just the franchisee."

No, to those franchisors who overreach and meddle in affairs which are purely in the franchise owner's jurisdiction, comes now the responsibility of that meddling.

Pretty easy to figure out.

 

Incoherent?

it might be useful if you were at least informed of the issues regarding Browning Ferris or the discussion regarding the new standard being proposed by the NLRB. Since direct control is a difficult or impossible standard to prove for the vast majority of franchise relationships as shown in the Freshii action, information is now the lynchpin. Regardless of its format, software and the ability of the Franchisor to obtain and disseminate data for its own use and that of its franchisees is being challenged. As of today, as it relates even to the claims against McD, that is where the actual discussion centers. So hip hip hooray for Keith and his masters at SEIU. Strip down the relationship so that the Franchisor will be unable to provide data needed to compete and mangage better their businesses by franchisees is at risk. Requiring the Franchisor to lessen the independence of franchisees is at risk since Franchisors will now need, if SEIU/NLRB wins, to actually manage franchisee labor and franchisee's HR policies to reduce their liability. Franchisees will further need to deal with union rules and workplace requirements further limiting their independence and profit. Yes, the costs of labor and the ability to manage labor and other costs will be hurt. Make a deal with the devil and he/she takes you to places you did not expect.

Keith is an amateur and the pros at SEIU used him to create, what they hope will be a path toward organizing franchisee's labor. It's a bit too late for CFA to come out with a press release, or Keith to say that he was misunderstood. CFA got into bed with SEIU thinking it could get something and it just might in California. But Oh the price we are all going to pay for having Keith's level of intellect doing anything more than standing behind a counter and asking if the customer was wants sweet or hot peppers in their Subway grinder.

Visitor Incoherence

Say visitor, why don't you have the guts to sign you name to your rants?

Because that is all you have - rants.

Incoherent

Key, but insightful words that you used were what SEIU activists "hope will be a path." Key word being "hope."

How'd that hope thing work out so far? Lots of activity. One solid law, only enacted on fear of Scott Brown without it being read by labor activists. Salright.
i'm OK

Good fit for IFA job

<p>&quot;hope...activists...Scott Brown...Salright... blah, blah, blah&quot;</p>

<p>I have no idea what this guy is talking about.</p>

<p>I can barely recall who Scott Brown is. Wasn&#39;t he that exotic dancer that became a U.S. Senator for a year in some liberal New England state? I haven&#39;t a clue of what he has to do with the franchise industry though.</p>

<p>&quot;Salright&quot; has me even more confused. Wasn&#39;t Sal the attorney that Walter Wright called when he immersed himself into Meth making madness? I think Sal&#39;s last name was Right before he became so Wrong. Hmm. Is the writer hinting that Sal has found a more lucrative career in franchising after his experience in crime? Actually, that would be one of the few believable and more decipherable things that the writer has written.</p>

<p>Here&#39;s someone who thinks his own thoughts and his neighborhood are on the mind of everyone else&#39;s here. I would like to remind him that placing oneself in the shoes of a reader is the essence of good writing.</p>

<p>Might I suggest that this person apply for the communications job at the IFA (International Franchise Association)? He&#39;d be a shoe-in there.</p>

Why we

Anti legal protection for franchisees visitor said: "in exchange for balance in "control", franchisees now have a union shop steward controlling their employees salaries, benefits and schedules, rather than the franchisee?"

You mean instead of the franchiser filed rep doing it? To many franchisees in abusive systems there is no difference, except that the union goon doesn't have the power to steal the franchisee's business and resell it to someone else and keep all of the money.

Pretty simple, whether you agree with Miller or anyone else. Franchising needs to rid itself of franchisees who behave that way, and no franchisees would be running to state legislatures for protection.

Sad State of Affairs

I disagree with this analysis.

But, what is more profoundly disappointing is that nobody who wants to argue will sign their name to their comments.

Everyone is a visitor.

That is just sad.

Especially for an important issue like this.

How Does the NLRB Decision Affect Every Franchise?

I understand why the CFA would stand with the IFA in the Seattle Case where "franchisees" were treated differently than other businesses.

I don't understand why the CFA would stand with the IFA on the NLRB decision with McDonalds.

The post above doesn't explain how the NLRB decision with McDonalds "would destroy the franchise business model."

There are systems that operate quite successfully with "joint employer" status such as Chick-fil-A.

The IFA is against the decision because it may change the business model of it's largest members, such as McDonalds, 7-Eleven, Dwyer Group, UPS etc. Other than causing some franchisors to moderate their control over franchisees employees, how does it destroy the franchise model? Why should CFA take a position against the decision at this point?

Michael, do you know where the NLRB drew the line as "joint employer" for the McDonalds case?

I haven't seen anything on that piece.

Does anyone know?

 

Joint Employer

Joint Employer opens the door for other traditional franchisors to become more controlling like a 7-11 or a McDonalds, without having to invest in the commensurate real estate and systems owned by those franchisors.

The newly controlling Zors would then take actual control of the assets owned and paid for by franchisees for free. At least 7-11 and the others actually paid for and delivered their assets to franchisees to rent.

Another example is McDonalds simply announcing that it was raising wages for its crew members. It didn't inform its franchisees and franchisees technically aren't compelled to do the same, but with joint employer they would be even if it put them underwater. It's bad enough now whiteout joint employer for franchisees facing the pressure from regulators and employees who heard about the Zor wage increase.

That's just a smattering of the ills of joint employer.

Joint Employer Could Cause the Reverse Reaction

Many franchisors may react by changing their franchise agreement and operations manuals to avoid being labeled a "joint employer". 

That could result in more flexibility and freedom for the franchisee.

A joint employer ills

Jim, that's funny! No franchise agreement change in response to a law has ever resulted in more freedom or flexibility for franchisees, but I like your optimism.

Fighting ideology

<p>&quot;No franchise agreement change in response to a law has ever resulted in more freedom or flexibility for franchisees&quot; - Visitor</p>

<p>I don&#39;t think your assumption holds up. I kind of like how in the real world of franchise relationship laws I am given 60 days notice to cure a default in my state. The baseline of the law gives franchisees both freedom and flexibility versus just being immediately terminated. That&#39;s the first thing that popped into my head. But I like your absolutism and negativity.</p>