How the NLRB’s New Joint Employer Rule Affects Restaurant Franchises | Eater
"In 2019, 1,400 workers sued alleging wage-and-hour violations — including unpaid overtime, missed meal and rest breaks, and mandated off-the-clock work — and named both the local franchisee, the Haynes Corporation, and the parent company as “joint employers.” Although the employees and Haynes reached a classwide settlement, a court found the parent company not liable because it was not involved in day-to-day store operations. From 2020–2023, a Trump-era NLRB rule further limited franchisor liability, but on October 26 the NLRB clarified the joint-employer standard, restoring a broader test that can hold both franchisors and franchisees liable for unfair labor practices. The change requires both entities to bargain with unions representing jointly employed workers and allows unions to apply economic pressure to parent companies, a shift that could accelerate organizing, expand avenues for harassment and safety complaints, and increase litigation risk. Industry groups (including the NRA, IFA, and AHLA) argue the rule will unduly burden franchise owners and upend the franchise model, warning franchisors may either tighten controls over franchisees or distance themselves to avoid liability; labor advocates counter that the rule prevents corporations from hiding behind subcontractors to deny workers collective bargaining and accountability." - Amy McCarthy
