A bill recently introduced in the California legislature would make fast-food franchisors jointly liable for the franchisee's violations of employment law.
Currently, only the franchisee has civil liability for issues like minimum wage, overtime, off-the-clock and meal break violations; sexual harassment; discrimination; workplace injuries and workplace violence. Franchisees typically handle hiring, firing, pay rates, scheduling and work assignments, while the franchisor controls the branding, advertising, trademark and some real estate decisions.
The proposed bill would be "a fundamental change to the relationship. Currently, franchisees operate very independently on a day-to-day basis from the franchisor," said Alden Parker, an attorney with Fisher Phillips in Sacramento, Calif. "This threatens that independence that they enjoy."
"For franchisors, this expanded liability would be a huge shift and [would] require balancing between effectively screening potential franchisees and ensuring their compliance, while not overstepping the boundaries that are supposed to exist between franchisors [and] franchisees," said Michael Kalt, an attorney with Wilson Turner Kosmo in San Diego.
Under the proposed bill, the franchisor would receive written notice of legal violations and have 30 days to remedy the situation and come into compliance. That period could be extended to 60 days if the franchisor requests an extension.
The bill would apply to fast-food chains consisting of 100 or...
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