Rhetoric vs. Reality: The Joint Employer Standard

Examining the Real-World Impact of the NLRB’s Controversial Browning-Ferris Decision

In the aftermath of the National Labor Relations Board’s (NLRB) Aug. 27, 2015 decision in Browning-Ferris Industries (BFI), which saw the creation of a new “joint employer” standard in federal labor law, questions have been raised about the real-world impact of the ruling on millions of local businesses. As Congress considers the Protecting Local Business Opportunity Act (PLBOA), legislation to repeal the NLRB’s harmful joint-employer ruling, it’s important to separate the common myths from the facts. Get the facts here .

Myth:

Franchisors control the prices, the wages, the uniforms, and even the temperature at their franchise locations; therefore, they are joint employers and should be liable for the franchisees’ employees.

Fact:

No franchise brand company has the authority to hire or fire employees or set wages, work schedules, or shift assignments of its franchisees. The local franchise owners do agree to pay their franchise brand company for the training and advertising they provide, generally through a royalty of profits. Further, courts have held that franchisors cannot dictate pricing to franchisee locations that would economically damage a business.

Myth:

The NLRB’s cases are narrowly focused on specific fact patterns and their decisions would be considered on a case-by-case basis.

Fact:

All businesses would need to react to the NLRB inventing a new joint employer standard in order to limit their own risk. Expanding the definition of joint employer would have wide-ranging consequences among local businesses from coast to coast as larger companies would be forced to consolidate operations. Additionally, the NLRB’s actions would have a chilling effect on entrepreneurial investment and dampen economic growth in communities across the country.

Myth:

The effort to redefine joint employer is a grassroots, worker-led movement.

Fact:

There is no widespread, organic evidence that employees of any fast food franchises are walking out of their jobs on their own volition. In fact, video of a “protest” in New York City showed union members and family of union staff – not fast food workers – participating. Source: Daily Caller http://dailycaller.com/2014/12/06/video-claims-seiu-paid-members-to-join-fast-food-protest-video/

Myth:

Corporate systems dictate most of a franchisee’s business activities, including where individual stores can buy supplies, how many workers should be on duty for a given shift, and how often employees must clean the bathrooms.

Fact:

Local franchise business owners make nearly all of the business decisions of their stores or restaurants. They, and not the corporate brand, establish their own employment practices and policies. Local owners decide who to hire, what to pay, and employees’ work schedules. The success of the business is dependent on the local business owner’s understanding of the local marketplace and the needs of the community.