Over the past several years, franchisors and their advocates have created a “monster in the closet” mentality about the prospect of joint employer liability. By way of a quick summary, in 2015, the National Labor Relations Board, in BFI Newberry Island Recyclery, 362 NLRB No. 186, adopted a change to the definition of who was an “employer” to include anyone who exerted “indirect control” over activities of an employee. This, at least arguably, suggested that franchisors whose franchise agreements give them all sorts of rights to control the activities of both the franchisee, and more indirectly, their employees, could be found to be joint employers if the employee made a workplace-type claim against the franchisee (e.g., a wage and hour claim, a sexual harassment claim, or otherwise).
With the change of administrations in 2016, and again in 2020, the rule has contracted and recently again expanded to include this indirect control as potential an element in determining whether someone is a joint employer for purposes of the NLRB.
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