Client Alert

August 31, 2015

Franchise Model Takes Hit-NLRB Rules against Waste Management Company
The politicized NLRB has ruled against a waste management company in a widely watched case. The ruling came down along party lines- 3 (D) -2(R). This ruling loosens the standards for determining joint-employer status. This ruling is significant in that it alters the Franchise/ Franchisee model. The Franchisor now may be considered a joint employer and thus “tied” to the employees of the Franchisee. This ruling will have a significant impact on ALL franchise models.

The impact will create a more favorable environment for class action law suits, union organizing, and other labor and employment issues. As long as the Franchisor reserves the right to exercise control over the employment of a Franchisee’s employees (even if that does not actually happen directly or indirectly), the Franchisor and the Franchisee will be considered joint-employers.

SESCO recommends that clients review all applicable policy and practices to ensure compliance. For assistance, contact us at 423-764-4127 or by email at sesco@sescomgt.com