The franchise industry has aggressively opposed the National Labor Relation Board's (NLRB) ruling that franchisors can be considered joint employers in court. So, they're digging deeper for more facts.
Steve Caldeira, president of the International Franchise Association (IFA), announced on Thursday that the IFA plans to file a Freedom of Information Act request with the NLRB. The request seeks to uncover the reasoning behind the board's decision that franchisors and franchisees can be considered "joint employers."
The IFA has opposed the NLRB's ruling since it was issued in July, in a decision covering 43 McDonald's cases. The trade organization argues that deeming a franchisor an employer fundamentally changes the model of franchising, in which franchisees alone are responsible for overseeing issues of employment. Additionally, the IFA says that since the decision, there has been an upswing of NLRB complaints against franchisors and franchisees, with 61 new filings since the end of July.
“We fear that the floodgates have opened because of the general counsel’s opinion. And given the lack of transparency on the rationale behind the decision, it is creating a huge amount of uncertainty in the franchising community,” Caldeira said in a statement. “This needs to stop.”
The NLRB has, thus far, denied requests to share the internal advice memo that explains the board's decision to consider McDonald's a joint employer. This September at the IFA's annual Public Affairs Conference in Washington, D.C., franchisors and franchisees petitioned congressional members to sign a letter asking for the NLRB to release the memo.
The exact ramifications of the NLRB's decision on the franchise industry are not yet clear. However, the uncertainties have led to franchisors and franchisees preparing for the worst.
"This joint employee-employer thing, if that goes through, that's a hand grenade in the middle of the [franchising] business model," Two Men and a Truck and BrightStar Care franchisee Bill Bass told Entrepreneur.com in September. "It would completely change everything about the franchising model, to the point where we probably wouldn't be in franchising."
In response to the franchise industry's confusion, the IFA also announced Thursday that it plans to set up a hotline and information website to give members advice on the NLRB's joint employment opinion and how to address it.