While the American Franchise Act works its way through the United States Capitol, the National Labor Relations Board took its own action on the joint employer rule. In a move to make an earlier court decision official, the NLRB reinstated the 2020 standard.

As legislation to codify joint employer standards circulates in Congress among committees, the National Labor Relations Board published a new rule giving clarity for the present.

On Friday, the NLRB revised its rules and regulations to officially replace text vacated by court action. In October 2023, the NLRB, then under President Joe Biden, issued a rule where a franchisor could be considered a joint employer with a franchisee for a group of employees.

The standard meant a franchisor could be responsible for terms involving wages, benefits and work conditions. Plus, Franchisors designated as joint employers would share liability with franchisees on labor law violations, and would have a legal obligation to negotiate with unions. The 2023 rule was a reversal of the 2020 version, put in place during President Donald Trump’s first term.

The 2023 standard was similar in language to one put in place more than a decade ago in 2015. The International Franchise Association, which fiercely opposed the move, claimed the 2015 version cost franchise businesses $33 billion per year in operational costs and resulted in a 93 percent rise in lawsuits.

The IFA, joined by the United States Chamber of Commerce, challenged the rule...

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