{"id":331,"date":"2016-05-12T13:46:58","date_gmt":"2016-05-12T13:46:58","guid":{"rendered":"http:\/\/marcusboxerman.com\/blog\/?p=331"},"modified":"2016-05-12T15:02:11","modified_gmt":"2016-05-12T15:02:11","slug":"update-franchisors-can-avoid-joint-employment-trap","status":"publish","type":"post","link":"https:\/\/marcusboxerman.com\/blog\/update-franchisors-can-avoid-joint-employment-trap\/","title":{"rendered":"Update: Avoiding The Franchisor Joint Employer Trap"},"content":{"rendered":"

\"ivak-Bear-Trap-300px\"It\u2019s an unsettling time for franchisors.\u00a0 The NLRB\u2019s new \u201cindirect control\u201d standard for finding a joint employer relationship (discussed here<\/a>) is ambiguous and leaves many franchisors confused about how to protect their brand without becoming a joint employer with their franchisees and taking on liability for their employment decisions. \u00a0While the law surrounding the joint employer question is still developing, we offer some steps to take to protect yourself from a joint employer finding while maintaining necessary quality controls for your franchise system.<\/p>\n

Define the Franchisor\/Franchisee Relationship.\u00a0 <\/strong>Most franchise agreements already explain that a franchisee is an independent contractor, not an employee.\u00a0 Take it one step further by spelling out that the franchisor has no direct\u2014or indirect\u2014control over franchisee employment decisions.<\/p>\n

Do Not Give Franchisees An Employee Handbook.<\/strong>\u00a0 Do not provide franchisees with a sample employee handbook. Instead, advise franchisees to hire a third-party human resources professional or an attorney to help create an employee handbook and avoid unfair labor practices.<\/p>\n

Stay Out of Employment Decisions.\u00a0 <\/strong>Do not get involved in employment decisions such as hiring, firing, employee discipline, working conditions or wages and benefits.\u00a0 Also, do not post job listings for franchisee locations or supply job applications to franchisees.<\/p>\n

Eliminate Unnecessary Franchisor Controls.\u00a0 <\/strong>Trim down your franchise operations manuals, training materials and communications, to ensure that you only provide mandates to your franchisees that are necessary to maintain your brand.\u00a0 Leave the rest to the franchisees.\u00a0 Do not set hours of operation for a location, work hours for employees or required inventory levels for your franchisees.<\/p>\n

Limit Involvement In Franchisee Employee Training.\u00a0 <\/strong>Make franchisor-provided training optional for franchisee employees below management level.\u00a0 Franchisees should be solely responsible for training their workforce and must understand that a failure to maintain brand standards will result in a breach of the franchise agreement.\u00a0 Providing \u201copening day\u201d training to get a franchisee started is fine, but limit your franchisee training to things directly connected to maintaining your brand standards.<\/p>\n

Educate Franchisor Field Personnel.\u00a0 <\/strong>Make sure your field personnel know the current state of the law and understand what should and should not be communicated to franchisees.\u00a0 Teach franchisor field personnel only to deal with management-level franchisee employees and to keep far away from franchisee employment decisions.\u00a0 Also, either update your standards for inspections or consider hiring a third-party to make sure you maintain the appropriate distance.<\/p>\n

Make Sure Franchisee Employees Know Who They Work For.\u00a0 <\/strong>Require your franchisees to explain to their workforce that there is only one boss: the franchisee.\u00a0 If any franchisee employees come to you with complaints, redirect them to the franchisee for appropriate resolution.<\/p>\n

Avoid Monitoring Technology.\u00a0 <\/strong>Stay away from technology that provides you with too much information about franchisee employees\u2019 daily activities.\u00a0 While it\u2019s okay for a franchisor to recommend a specific POS system, if the system you recommend comes with software features for employee management, either unbundle that portion of the software or make clear that the use of those software features is optional.<\/p>\n

Make Any Centralized Services Optional.\u00a0 <\/strong>It\u2019s acceptable to offer your franchisees centralized services for things like payroll, administration and accounting, but be sure your franchisees know these centralized services are optional and that they are free to choose a third-party provider of their choice.<\/p>\n

Rethink Pricing Controls.\u00a0 <\/strong>Price is an important part of many brands, but when a franchisor imposes pricing controls on franchisees it affects what the franchisees can afford to pay employees.\u00a0 When prices are not imperative to your brand, consider letting franchisees control their own price maximums. \u00a0 Franchisors may\u00a0still use price-specific, limited-time advertising that affects your system; it\u2019s just smart to leave the franchisee with control as often as possible.<\/p>\n

Get an Experienced Attorney.\u00a0 <\/strong>This area of the law is rapidly changing and an experienced attorney is a valuable tool for navigating it.\u00a0 An experienced employment attorney can keep you updated on changes in the law and show you how to defend yourself.<\/p>\n","protected":false},"excerpt":{"rendered":"

It\u2019s an unsettling time for franchisors.\u00a0 The NLRB\u2019s new \u201cindirect control\u201d standard for finding a joint employer relationship (discussed here) is ambiguous and leaves many franchisors confused about how to protect their brand without becoming a joint employer with their … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,25,4,27,1],"tags":[68,65,39,5,30,31],"class_list":["post-331","post","type-post","status-publish","format-standard","hentry","category-franchisee","category-franchisor","category-franchisor-distributor-services","category-joint-employer","category-uncategorized","tag-employer-liability","tag-employment-law","tag-franchise-law","tag-joint-employers","tag-national-labor-relations-board","tag-nlrb"],"yoast_head":"\nUpdate: Avoiding The Franchisor Joint Employer Trap -<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/marcusboxerman.com\/blog\/update-franchisors-can-avoid-joint-employment-trap\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Update: Avoiding The Franchisor Joint Employer Trap -\" \/>\n<meta property=\"og:description\" content=\"It\u2019s an unsettling time for franchisors.\u00a0 The NLRB\u2019s new \u201cindirect control\u201d standard for finding a joint employer relationship (discussed here) is ambiguous and leaves many franchisors confused about how to protect their brand without becoming a joint employer with their … Continue reading →\" \/>\n<meta property=\"og:url\" content=\"https:\/\/marcusboxerman.com\/blog\/update-franchisors-can-avoid-joint-employment-trap\/\" \/>\n<meta property=\"article:published_time\" 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