As many of you will recall, the National Labor Relations Board (NLRB) in late 2014 commenced its effort to have franchisors declared the “joint employers” of their franchisees' employees. By doing so, the NLRB and its supporters hope to make large franchisors the economic “bargaining unit” with which unions may negotiate the salaries and benefits to be accorded to their franchisees' employees.

This governmental attack on the franchise model began with the NLRB issuing complaints against McDonald's Corporation (McDonald's) and certain McDonald's franchisees which alleged that those franchisees engaged in improper discipline, coercive conduct and employee discharges in response to unionization activity—and that McDonald's, as the putative “joint employer” of those franchisees' employees, was jointly liable for such alleged violations of the National Labor Relations Act of 1935, 29 U.S.C.A. §§151-169 (2000).

NLRB general counsel Richard Griffin Jr., seemingly unconcerned that the NLRB thrust against franchisors contravened virtually all judicial precedent on the subject, 30 years of NLRB precedent, the Lanham Trademark Act (15 U.S.C.A. §§1051-1172), every federal and state franchise law definition of the term “franchise” and the business realities of franchising, nevertheless had his way in a 2015 proceeding unrelated to franchising, Browning-Ferris Industries of California, 362 NLRB 186 (August 2015), in which the NLRB held that two or more entities would be deemed joint employers of the same employee if they “share or co-determine those matters governing the essential terms and conditions of employment.” Rejecting 30 years of precedent, the NLRB in Browning-Ferris went on to declare that the reserved authority to control terms and conditions of employment, even if not exercised, was sufficient for a “joint employer” finding.