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Bryan E. Kuhn
Counselor at Law, P.C.
Business & Employment Law Attorney

NLRB ruling makes it harder to hold franchisors accountable

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The NLRB has issued a new ruling making it harder to hold franchisors accountable for employment violations.

In what is being described as a big win for franchisors and other large corporations and a loss for workers’ rights, the National Labor Relations Board (NLRB) recently reversed its own 2015 ruling which had held that parent companies are considered joint employers of workers who are managed by franchisees and temporary agencies, according to Reuters. The move makes it harder for workers who are victims of workplace harassment and other employment violations to hold large companies liable for those violations.

Previous ruling strengthened worker rights

In 2015, the NLRB ruled that large companies, such as franchisors and companies that relied on contractors and temp agencies, could be considered joint employers even if they weren’t involved in the day-to-day management of employees. The ruling especially affected fast food franchises, with eight million Americans currently working for a franchise, according to CBS News. Another 4.8 million Americans work for temp or staffing agencies.

That 2015 ruling allowed workers to hold both their individual employer, such as a franchise owner, along with the parent company jointly responsible for workplace violations. The ruling had also made it easier to ensure that systemic violations occurring at multiple franchise locations could be addressed through large lawsuits targeting the parent company.

NLRB reverses its own ruling

However, the NLRB reversed that ruling recently, arguing that the parent company cannot be held liable for workplace violations if it does not exercise direct control over employees. The change will mean that employees who suffer from an alleged violation will have to pursue those allegations against only their immediate employer, such as the franchisee, who will likely have fewer financial resources for hearing complaints than the parent company would.

The reversal, which favors large companies and hurts workers’ rights, is ironic given that the NLRB was created in 1935 with the mandate to protect workers’ rights to organize and to hold employers accountable for employment violations and abuse. The reversal makes it harder for workers to organize across multiple franchise locations and also makes it more difficult to hold franchisors and parent companies accountable for the abuse of employees.

Employment law help

While the above ruling is a setback for employees’ rights, it is important to point out that workers who believe their rights have been viola ted still have plenty of legal options open to them. An employment law attorney can help workers who are alleging employment violations, such as harassment, wage violations, or wrongful termination, understand what legal remedies, including potential compensation, may be available and how to most effectively pursue them.

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