The proposed expanded joint employer rule, which a International Franchise Association The coalition led by the (IFA) challenged in the federal court, was defeated Friday when the National Labor Relations Board dismissed his complaint of a previous decision in favor of the coalition.
“This announcement means the last-ditch effort to implement common employer is finally over and represents a historic victory for small franchise businesses in communities across America,” said Matt Haller, IFA president and CEO. in a statement. “The franchise business model is the best tool for American workers to generate upward mobility and create small business ownership from all walks of life. Make no mistake: as today's news shows the real threat is behind us , the IFA will remain vigilant against any attempts to target the franchise model or our members.”
Some form of the Common Employer Rule has existed for years, but in 2023, the NLRB expanded it in a way that directly affected the franchise industry. Under the proposed expanded version of the rule, two companies—say, McDonald's and a McDonald's franchisee – can more easily be considered “joint employers” of the same employees. That would do McDonald's legally liable for any labor violations committed by one of its franchisees, even though McDonald's itself did not employ or manage that employee.
Although this is the end of this attempt to expand the rule, the lawyer Jim Paretti of the labor relations law firm Littler Mendelson recently said The entrepreneur which NLRB options are moving forward. “The short answer is this BOARD They can keep trying to write a rule,” Paretti said. “They can go back to the drawing board, try again and write something tighter.”
Read more: Bloomberg Law
