“The ruling jeopardizes small employers in numerous sectors and the future viability of the franchise model of doing business, which has been a hallmark of economic growth and small business ownership opportunities for thousands of aspiring entrepreneurs. The ruling also threatens millions of jobs that franchises create across the country,”
The IFA contends that the NLRB's “tortured analysis will undoubtedly be met with skepticism and will be rejected by local franchise owners, legislators and, ultimately, the courts,” Mr. Caldeira said.
The IFA and its allies are asking Congress to intervene to halt these “out-of-control, unelected Washington bureaucrats” to preserve the established joint employer standard relied upon by 780,000 franchise businesses in the U.S. and the estimated 8.5 million jobs they create.
According to long-established practice and law, local franchise owners control their own hiring practices, working conditions, wages, and hours of operations and file their own taxes, the IFA pointed out.
None of these decisions is controlled by the brand company, the IFA said. Instead, each local franchise business owner operates a separate company independent of the brand company.However, the association said, the NLRB's ruling means the Board can consider factors unrelated to employees' condition of employment as indicative of “joint employment.”