The National Labor Relations Board considers franchisors joint employers of their franchisees’ employees when they “share or codetermine those matters governing the essential terms and conditions of employment,” such as hiring, firing, discipline, supervision and direction, determining wages and benefits, setting work hours, and ongoing training of franchise employees. This is a problem for franchisors because joint employment creates joint liability.
To avoid entering a joint employment relationship, franchisors should:
- Clearly define the franchisor/franchisee paradigm in franchise agreements by plainly stating that the franchisees alone are responsible for decisions related to personnel matters.
- Maintain a separation of powers with franchisees.
- Refrain from directing or attempting to give guidance directly to franchisees’ employees during audits.
- Make sure franchisees post clear notice, visible to both customers and employees, identifying the location as an independently owned and operated business.
For more information on any of the subjects addressed in our FAQ or employment law in general, contact us at (312) 216-2720 or firstname.lastname@example.org.