The NLRB Tightens the Screws on Franchise Operations Manuals

Are you ready for the National Labor Relations Board?

In recent months, the National Labor Relations Board (NLRB) has been tightening the screws on the definition of “joint-employer” status, and the franchise community has been in its sight. McDonald’s came under fire when employees claimed that the corporate office often dictate and control labor at the franchisor level. Their attorneys cite the operations manual as a key piece of evidence of “control”. It is because of these types of cases, If the difference between winning and losing a lawsuit comes down to “must” or “should”,   franchisors are well advised to take a second look at their franchise operations manuals.

The prime suspects are always in the HR and Safety and Security sections of the manual. Too often, franchisors want to dictate the type of people franchisees should hire. This is done with the best of intentions, and it links the two directly—making the joint employer claim more plausible. This is especially true with employee reviews, handbooks, training and scheduling.  It is better to change such requirements to “best practices” or “highly recommended.” The farther away from employee related topics that one can manage, without compromising the brand identity, the better.

If franchise operations manuals can make or break a joint employer claim, then it is in everyone’s best interest to clarify one another’s roles and responsibilities.  Doing so strengthens both parties and protects against dubious lawsuits. Using smart language is a key component in that process. Taking the time to sit down with your team and review it is the only way to begin to protect yourself from being a joint employer.


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