LPA Foundation
Presidential Issues: Labor


View all Articles by News and Views

DC Bureaucrats Upend Franchise Businesses

August 28, 2015

By Diana Furchtgott-Roth

Under a National Labor Relations Board decision released on Thursday, the Board has dramatically expanded the numbers of “joint employers” in America.  Now, employees of franchised business such as Burger King may be classified as employees of the parent company.  Employees of subcontractors, such as office cleaners, may be classified as employees of the company that hires the subcontractor.

With its decision, the Board overturned a prior ruling by its regional director that employees of Leadpoint were not joint employees of Browning Ferris, a recycling plant that subcontracted operations to Leadpoint.  Subcontractors and franchisees across the country had better watch out for more lawsuits and higher costs of doing business.

Last week, speaking at the Detroit Economic Club, Republican presidential candidate Senator Marco Rubio said, “The National Labor Relations Board is on the verge of declaring that David doesn’t even own his business, that he is a ‘joint employer’ with his franchisor. The likely impact is that fewer franchises will open, and costs and litigation will increase for existing ones.”

Read the full article at Economics 21: DC Bureaucrats Upend Franchise Businesses

Issue Categories : Labor, Regulations