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As I expected, National Labor Relations Board (NLRB) is appealed of eastern region Texas ruling Overturning expanded joint employer rules. Especially given that President Biden vetoed a bipartisan resolution on May 3 to invalidate the expanded rules (and curb the NLRB’s ability to make future sweeping rule changes). ), but this is not good news. However, the expanded rules that would crush the franchise have not yet been implemented. international franchise association continues to oppose it.
“The court has made clear that the joint employer rule is beyond the scope of the NLRB’s authority and should not apply,” said Michael Layman, IFA’s senior vice president for government affairs. “IFA will not stop fighting to protect franchisees from the harm caused by NLRB overreach, which is why franchising will continue to be one of the greatest avenues for business ownership and job creation.”
Related: Considering franchise ownership? Get started today and find a personalized list of franchises that fit your lifestyle, interests, and budget.
“A groundbreaking victory”
In addition to the legislative push that led to the now-vetoed bipartisan resolution, an IFA-led coalition including the U.S. Chamber of Commerce filed a lawsuit In 2023, we will challenge the legality of the expanded rules in the Eastern District of Texas. A federal judge ruled in favor of IFA in March. hit Matthew Haller, IFA Chairman and CEO, said:A breakthrough victory in franchising. ”
RELATED: NLRB’s new joint employer rules are so extreme that even California rejected state-level franchise-busting policies
NLRB Appeal
The NLRB is currently appealing the Eastern District of Texas’ decision. This means that the expanded rule is not yet in effect, but will now be reconsidered. 5th U.S. Circuit Court of Appeals. The court could reverse the Eastern District’s decision and reinstate the expanded rules or ratify the decision.
Meanwhile, in Washington DC, Service Employees International Union (SEIU) is also challenging this rule in court, arguing that it is too narrow. The same coalition behind the IFA-led Texas case is intervening in the D.C. case, and the court is currently considering a motion to dismiss.
Related: How the NLRB’s new joint employer rules will impact franchisees and franchisors and redefine the franchise relationship
protect your business
According to Alex MacDonald, an attorney with the Labor Relations Office, Littler Mendelsohn, franchisors can start protecting and preparing their businesses for the reinstated expanded joint employer rules by performing some simple tasks today. McDonald said this at an IFA webinar on April 23.Joint Employer: Is the Franchise Company OK?”
First, McDonald recommended a thorough review of all agreements (with vendors, franchisees, etc.) for indirect or reserved control specifications, such as:
- Direct training requirements
- Right to exclude workers
- Background check requirements
- minimum qualifications
- Specific staffing and coverage level requirements
Employers can counter these risks by clearly assigning responsibility for as many important contract terms to the employer as possible.
Next, scrutinize your business arrangements. When contracts or internal reporting and inspections require service requirements, focus on brand standards over individual employee standards. Minimize involvement in recruitment, time management, record keeping, payroll policies, and other operations.
If franchisors must inspect a site, MacDonald again recommended focusing on brand standards rather than individual employee standards. “I want to be careful about things like cleanliness,” he says. “Is your brand label in the right place? Is it clearly communicated that you are a franchisee? Is your product stocked? How many employees are at your desk? This starts with how they act, to appear to be overseeing rather than protecting brand standards.”
Additionally, reduce dependence on non-essential vendors (especially when vendors need to be on-site) and train supervisors on how to interact with vendors. But most importantly, “choose a partner you can trust. If you end up contracting with a vendor that operates on the border, these rules will protect you from fraud or mistakes by that vendor.” They are more likely to be held accountable for their actions,” McDonald said.