Not yet a Member?
HR Magazine is highlighting the next generation of HR leaders.
Is your employee handbook ready for the New Year? With SHRM’s Employee Handbook Builder get peace of mind that your handbook is up-to-date.
Get the HR education you need without travel expenses or time out of the office.
Join us in Chicago for the latest trends and technology in talent management, and what to expect in the future.
On March 22, 2016, Michigan joined Wisconsin, Texas, Louisiana and Tennessee by amending its Franchise Investment Law to clarify that—unless the franchise agreement specifically states otherwise—a franchisee is considered the sole employer of workers to whom it pays wages or provides a benefit plan.
These laws seek to address the uncertainty created by the dramatic 2015 ruling of the National Labor Relations Board (NLRB) in NLRB v. Browning-Ferris Industries, which impacts when a franchisor could be found to be a joint employer of its franchisee’s employees. The Browning-Ferris ruling is significant to a franchisor’s duties and potential liabilities to a franchisee’s unionized workforce.
In summary, two entities are considered to be “joint employers” under the NLRB’s standard before Browning-Ferris when the two entities exerted such direct and significant control over the same employees that they shared or co-determined the essential terms and conditions of employment.
After Browning Ferris, two entities are considered to be “joint employers” of a single workforce if they share or co-determine matters governing the essential terms and conditions of employment.
Indicia of "indirect control" includes dictating the number of workers to be supplied; controlling scheduling, seniority and overtime; and assigning work and determining the manner and method of work performance.
Federal law preempts overlapping or potentially conflicting state law. Because the NLRB applies federal law, the recently enacted state laws may be subject to challenge on preemption grounds under the NLRA.
The recently enacted state laws impact the state law claims, which may be filed against franchisors and franchisees in state court. Further, franchise associations are urging other states to similarly amend their franchise laws.
In states like Michigan that enact similar amendments to its franchise laws, franchisors should consider promptly:
Republished with permission. © 2016 Duane Morris. All rights reserved.
You have successfully saved this page as a bookmark.
Please confirm that you want to proceed with deleting bookmark.
You have successfully removed bookmark.
Please log in as a SHRM member before saving bookmarks.
Your session has expired. Please log in again before saving bookmarks.
Please purchase a SHRM membership before saving bookmarks.
An error has occurred
Recommended for you
CA Resources at Your Fingertips
SHRM’s HR Vendor Directory contains over 3,200 companies