Protect Your Business: Strategies for Dealing with Biden’s Veto of Joint Employer Resolution

President Biden’s recent veto of Congress’ attempt to overturn the National Labor Relations Board’s (NLRB) expansion of the Joint Employer Rule has left the rule in limbo, sparking concerns and legal action within the franchise industry. Despite the veto, questions loom about the future implications for franchise businesses and how franchisors can protect themselves moving forward.

The expanded Joint Employer Rule, which broadens the definition of joint employment, could potentially hold franchisors liable for employees they don’t directly employ or manage. This could have detrimental effects on both franchisees and franchisors, leading to a shift in the franchise model and increased control from the top.

Following President Biden’s veto, the International Franchise Association (IFA) expressed disappointment, highlighting the impact on small businesses and the regulatory uncertainty they now face. The IFA, along with other industry organizations, won a lawsuit challenging the expanded rule in Texas, but the legal battle is far from over.

With ongoing litigation and the possibility of the rule resurfacing, franchisors are advised to take proactive measures to protect their businesses. This includes reviewing contracts for control specifications, emphasizing brand standards over individual worker standards, and choosing reliable partners to minimize risks.

As the legal battle continues, franchisors must stay vigilant and prepared for any potential changes in the Joint Employer Rule. The future of franchise businesses hangs in the balance, and how franchisors navigate these challenges will determine their success in the evolving regulatory landscape.