Three Ways to Protect Your Franchise from the Joint Employer Complaint

The McDonald’s franchise has been under hot water since the NLRB issued a complaint against the franchise, alleging the franchisor and franchisees were classified as joint employers. This happened back in July and it is still a very hot topic. But what does this mean for franchisors? We spoke with attorney Lee Plave of Plave Koch PLC to get to the bottom of it.

Having worked at one of the biggest practices in the world, Lee Plave knows his law, particularly in the franchise sector. Of the joint employer ruling, Lee says there are two things going on: What’s really going on and what people say is going on.

The NLRB, in fact, did not make a ruling about this joint employer issue, but that’s what the buzz is saying. Instead, the General Counsel of the NLRB, Richard Griffin Jr., issued a complaint about unfair labor practices.

"There’s smoke that suggests there’s fire,” Lee says, “but we haven’t really seen the fire yet.” So what does this mean for franchisors? Essentially, nothing yet. But that’s not to say that nothing will happen eventually, and possibly soon. Either way, it’s good practice to prepare yourself for the future so that nothing like this happens to you.

Lee offers up three ways to protect yourself as a franchisor from this potential ruling, while still providing good support for your franchises.

Control Your Trademark

Make sure your franchisees don’t use your trademark, lest the employees think they work for you and not the franchisee. In other words, each franchise should publicly display that it is independently owned and operated from the franchisor. This should be visible to the public and employees alike.

Get Out of the Middle

There is virtually no benefit for a franchisor to be in the middle of the relationship between franchisees and their employees. This relationship is very important, don’t get us wrong! But there’s no reason for the franchisor to be a part of it. And considering how big so many franchises become, trying to play a part in this relationship for that many franchisees can become impossibly daunting.

Outsource HR Training

Franchisors shouldn’t be the ones training franchisees about HR for two reasons: liability and quality. Hiring professionals is the way Lee suggests franchisors go about HR training. As a franchisor you can require professional training and suggest professional places to receive it (which is what PredictiveProfiles does, by the way) but from there it’s up to the franchisee to decide what to do next. This completely separates the franchisor from the relationship between the franchisee and employees, thus reducing the risk of a joint employer complaint.

Additionally, from a quality standpoint, HR professionals know better than the franchisor. They are experts in the field of hiring, firing and other HR practices and know the best way to go about practicing HR.

We will keep you updated as this story continues to develop. In the meantime, consider taking Lee’s suggestions into consideration, as the joint employer complaint could soon turn into a ruling.


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