skip to content
blog home General Franchise Group Demands Explanation for “Joint Employer” Ruling

The sad reality is that more than ever politics‚ political ideology  and politically motivated rulings are undermining the franchise business model. Last summer Richard Griffin Jr.‚ General Counsel of the National Labor Relations Board (NLRB)‚ ruled that McDonald’s can be held jointly liable for its franchisees’ employment practices‚ although the major fast food company owns only a small fraction of the restaurants. Controversy soon followed.

President of the International Franchise Association (IFA) Steve Caldeira admonished the decision‚ saying that it would “open a Pandora’s box of dangerously and needlessly costly and time-consuming labor complaints.”

His words have proven to be quite prescient.

Since the pivotal ruling was made‚ there have been 61 charges involving 27 other franchise companies or franchisees filed with the NLRB. Concerned with this development‚ Caldeira and the IFA along with 129 members of Congress are demanding that Griffin provide an explanation for his ruling.

In a letter to the General Counsel‚ Caldeira wrote‚ “In an unprecedented move‚ you appear to have ignored decades of established law governing joint employment and franchising.”

For the first time‚ Griffin did publicly address the controversial ruling in October‚ albeit broadly. He admitted that an NLRB complaint naming McDonald’s as a “joint employer” could prove to be problematic in a legal sense. He also stated that the NLRB has not yet reached a conclusion on how to resolve these cases.

Our nation and the wealth of our society has been driven by the many hard working men and women who have created businesses‚ great products or services for their customers and jobs for their employees. Franchising – as a business growth model – has played a significant role in the expansion story of so many businesses and brands. These entrepreneurs – as employers‚ franchisors and franchisees – should be valued and not attacked by politically appointed bureaucrats.

As this political policy making decision “takes root” I am sure that there will be many cases and legal precedents to come. We will certainly keep you updated.

Related Articles:

By Charles Internicola November 25, 2014

Franchising Guides

The Ultimate Guide to Franchising Your Business

New to franchising? Do you want to learn more about franchising your business, where to start, the steps, and how to know if you are doing it right?

Learn More

Is Your Business Franchisable and Should You Franchise?

Franchising may be the next big step for your business and represents an opportunity to grow your brand. So, how do you know if franchising is right for you? How do you know if your business is franchisable and, if it is, whether or not you should franchise your business? To answer these questions you must evaluate whether or not your business is franchisable and, if it is, whether or not your individual goals and your business goals align with franchising and establishing a franchise organization responsible for on-boarding, training, and supporting franchisees.

Learn More

Licensing Vs. Franchising

When considering expanding a business both franchising and licensing are possible options. Each option however comes with different rules and regulations. Prior to moving forward with franchising a business or licensing a business it is important to understand the differences and how each may have an affect on you.

Franchise Lawyer Charles N. Internicola wrote “Licensing versus Franchising” for the very purpose of allowing successful business owners to understand the difference between licensing a business and franchising a business.

Learn More

Guide to Selecting a Franchise Lawyer

If you have questions about franchise lawyers, what they do, how they can help, the cost, and how to select the right franchise lawyer for you, then this guide will help.

Franchise lawyers advise and represent individuals and businesses on legal issues that involve franchising a business, preparing an FDD, filing and renewing FDD registrations, buying a franchise, and litigation involving the franchisor and franchisee relationship. The role of a franchise lawyer varies depending on whether he or she represents the franchisor or the franchisee.

Learn More

Item 19 Financial Performance Representations

Check out our guide where we discuss how to plan and properly disclose Financial Performance Representations in your FDD.

Learn More

Franchise Sales Compliance Guide

Are you a franchisor or a part of a franchise sales team? Do you want to learn more about franchise sale compliance and ensure that your sales practices comply with franchise laws and are consistent with best practices? Then this guide is for you.

In this guide you’ll learn the fundamentals of franchise sales compliance including the franchise laws, regulations, and best practices that your team should have in place for every franchise sale.

Learn More
Close Overlay

Let’s Talk

With services to make your growth strategy simple, cost effective, and with a team excited to help you, let’s talk about how we can help grow your business.

Fill out the following form and we’ll contact you as soon as possible. To reach our team directly, give us a call at (800) 976-4904.