NLRB Snares Franchisors as Joint Employers of Franchisee Employees
The National Labor Relations Board issued a ruling on August 28, 2015 which represents a significant shift in determining whether there is a joint-employer relationship, ultimately opening up the possibility of increased collective bargaining, particularly when a company contracts for services with outside staffing agencies or participates in a franchisor/franchisee operation. Whether there is a joint-employer relationship which would allow employees to collectively bargain with more than one employer boils down to two main questions:
1. Is there a common-law employment relationship?
2. If so, does an employer possess sufficient control of essential terms and conditions of employment?
If the answer to both of these questions is yes, then the employer could be required to collectively bargain with the employees. This is a simplified standard which removes the former requirement that an employer not only possess control, but actually exercise that control. Since exercising control (i.e. power to set hours, wages or job responsibilities) is no longer required, indirect control is sufficient to bring an employer within a joint-employer relationship. Thus, those who contract for services such as through staffing agencies for leased or temporary employees or to be who participate in a franchisor/franchisee operation may be subject to collective bargaining with employees where such contracts exist even if the employer has not actual control of the employees. If you have questions or concerns regarding whether your company may be considered a joint-employer in light of this recent ruling, please contact Maribeth Meluch at (614) 221-2121 or mmeluch@isaacwiles.com
