A Collision Course? Navigating the Intersection of Franchisor Controls and Joint Employer Liability

An uptick of employees suing franchisors alleging that the latter should be held liable under the joint-employer doctrine for the actions of their franchisees could mean major changes for the franchising industry. As the National Labor Relations Board and other regulators encourage considering franchisors joint employers based on their controls over franchisees, some argue that certain controls are inherent to franchising without rendering franchisors joint employers. 

Kerry Bundy, partner, and Nick Rotchadl, associate, wrote an article for the International Bar Association's International Franchising newsletter's September 2015 issue. "While the law continues to evolve, franchisors should continue to be vigilant that their operation manuals, franchise agreements, and actual practices ensure that the controls reserved and/or exercised are closely aligned to controlling system standards rather than a personnel or supervisory controls," the article said.