July 19th, 2024
Restaurant Business: NLRB backs away from its push for a broadened joint employer standard—for now
Federal labor regulators have dropped their 10-year effort to routinely hold franchisors responsible for the employment policies and practices of franchisees. Or at least for now.
The National Labor Relations Board (NLRB) revealed Friday that it would not appeal a federal court’s ruling that franchisor and franchisee should be regarded as joint employers only in the rare instances where the licensor has direct influence over how a licensee manages its staff. The lawsuit challenged the NLRB’s expansion of the joint-employer definition so it would apply in any situation where a franchisor could conceivably affect licensees’ human-resources policies, regardless of whether any influence was actually exercised.
Under that broadened standard, franchisors would have been subject to penalties or lawsuits stemming from licensees’ management actions if the brand parent so much as made recommendations on how many people to hire or what job each should do. The applicability of the joint-employer standard would have been near universal.
Read the entire article from Restaurant Business.