Franchisor isn’t reassured when told NLRB will decide ‘joint employer’ issue on case-by-case basis


By Kent Hoover, Washington Bureau Chief, The Business Journals

A Senate hearing is not a usual venue for legal advice, but a labor attorney tried to reassure a franchisor there that the National Labor Relations Board would not consider her to be a “joint employer” of employees who work at the company’s 12 franchises.

That’s a huge question facing the franchise industry after the NLRB ruled 3-2 that indirect control or potential control over employment terms could be enough for a company to be considered a joint employer when it comes to collective bargaining or unfair labor practices.

Michael Rubin, a San Francisco attorney represents low-wage workers in industries where the use of staffing agencies is common, emphasized that the NLRB ruling came in a case where Browning-Ferris Industries dictated many of the employment terms and conditions for employees hired by a staffing agency to work at a Browning-Ferris recycling plant. Browning-Ferris trained the workers, set productivity standards for them, decided when breaks were, placed a cap on their compensation and reserved the right to reject any of the workers.

That’s “a world of difference,” Rubin said, from a case where a franchisor simply provides an operations manual and product standards, and leaves decisions on hiring, paying and scheduling workers to each franchise owner.

The NLRB, he said, will make decisions on who is a joint employer on a case-by-case basis.

That’s no comfort to Ciara Stockeland, the owner and operator of Fargo, N.D.-based Mode designer outlet stores, which has 12 franchises in the Midwest and South Carolina.

“Case-by-case inconsistency based on an unpredictable ‘indirect’ control joint employer standard makes small business owners fear when we might be in the crosshairs of regulators,” Stockeland told the Senate Health, Employment, Labor and Pensions Committee Tuesday.

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