The Potential Impact of NLRB Joint Employer Appeal on Your Business

The National Labor Relations Board (NLRB) has taken a significant step in appealing the Eastern District of Texas’ ruling overturning the expanded Joint Employer Rule. This move comes after President Biden vetoed a bipartisan resolution aimed at killing the expanded rule, which would have limited the NLRB’s ability to make drastic rule changes in the future. The International Franchise Association (IFA) continues to oppose the franchise-crushing expanded version of the rule.

Michael Layman, IFA’s senior vice president of government affairs, emphasized that the courts have made it clear that the Joint Employer Rule exceeds the NLRB’s authority and should not stand. The IFA remains committed to protecting franchised businesses from the potential harm that the NLRB’s overreach could bring, ensuring that franchising remains a vital avenue for business ownership and job creation.

The NLRB’s appeal of the Eastern District of Texas decision means that the expanded rule, while not currently in effect, will undergo further scrutiny by the 5th U.S. Circuit Court of Appeals. This court could either reverse the Eastern District’s decision and reinstate the expanded rule or uphold the ruling.

In the midst of these legal battles, franchisors are advised to take proactive steps to protect their businesses in case the expanded Joint Employer Rule is revived. This includes reviewing contracts for control specifications, emphasizing brand standards over individual worker standards, reducing reliance on nonessential vendors, and selecting reliable partners to minimize potential liabilities.

As the legal saga continues, the future of the Joint Employer Rule remains uncertain, with implications for both franchisors and franchisees. Stay tuned for updates on this evolving story.