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IFA, Chamber of Commerce applaud statute blocking NLRB 'joint employer liability' expansion

The International Franchise Association and the U.S. Chamber of Commerce Workforce Freedom Initiative announced their approval of a new law in Tennessee establishing that franchise and franchisee employees are separate entities.

April 20, 2015

The International Franchise Association and the U.S. Chamber of Commerce Workforce Freedom Initiative announced their approval of a new law in Tennessee establishing that franchise and franchisee employees are separate entities. The legislation stemmed from efforts to block the National Labor Relations Board from expanding joint employer liability under a standard proposed by General Counsel Richard Griffin in theBrowning-Ferris Industriescase and in complaints issued against McDonald’s Corp. and its franchisees as joint employers, IFA said.

The IFA and U.S. Chamber of Commerce Workforce Freedom Initiative together supported the Tennessee statute, which applies to state enforcement agencies. With bipartisan support, the legislature approved the initiative last month, and Governor Bill Haslam signed it into law April 10.  

The law is designed to clarify Tennessee code and states that "neither a franchisee nor a franchisee’s employee shall be deemed to be an employee of the franchisor for any purpose, notwithstanding any voluntary agreement between the U.S. Department of Labor and a franchisee," according to the announcement from IFA.

The NLRB is currently investigating whether McDonald's should be considered a "joint employer" with its franchisees. Current state and federal law states that franchisors and franchisees are not joint employers, allowing franchisees the responsibility for setting wages and hours for employees, IFA said.