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.