What's behind the national labor relations board's new joint-employer standard? A new joint-employer standard will increase the likelihood of union ucorporate campaigns ' against national franchisors and pressure franchisees to organize.

Author:Monson, Catherine

I am passionate about franchising. I have seen franchising help tens of thousands of Americans achieve their dream of business ownership. Franchising is a large community of diverse businesses that operate using the franchise business model to distribute its products or services. Under this model, entrepreneurs own their own businesses and acquire the right to operate those businesses using the trademarks, products and business strategies of a proven franchise system. In the process, the franchisee also receives the right to use a business/operating plan which the franchisor has crafted for all of its outlets.

This business/operating plan outlines a system of marketing, production, operational and management standards that maintain brand quality and uniformity. While franchise businesses are very common in the restaurant and hospitality industries, franchising is also popular across numerous other sectors, including health and wellness, child care, education, plumbing, senior care, signage, business services, personal services, retail and automotive.

Franchising is a great American success story, however a franchise is not a guarantee of success. Successful franchisees determine the profitability of their enterprise by executing proven business plans, controlling their operating costs and managing the people who make this system work.

The franchisee creates jobs that provide training and upward mobility for its employees. The employees work for the franchise owner, not for the corporate entity of the franchisor brand. The franchisee controls the hiring, firing, discipline, supervision, pay rates, schedules and direction of those employees. The franchisor has no input into the franchisee's labor relations.

However, it appears that the federal government--the National Labor Relations Board in particular--either doesn't understand this or is motivated for some other reason to undermine a successful business model that has generated untold economic benefits for millions of entrepreneurs and the people they employ.


On July 29, 2014, the National Labor Relations Board's general counsel announced that he had authorized complaints against numerous McDonald's franchisees and McDonald's USA as "joint employers" for alleged unfair labor practices. The NLRB general counsel's decision to issue complaints against both McDonald's franchisees and the franchisor marks a drastic change in the board's precedent regarding the franchisor/ franchisee relationship. The general counsel is asking the board to impose liability on the franchisor for the labor relations of individual franchisees simply because the franchisor establishes general operational and brand procedures for the franchisees' business, ignoring the fact that the franchisor has no involvement in or control over its...

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