CEO DATELINE - Franchise industry quietly winning labor battle in several states
CEO DATELINE - Franchise industry quietly winning labor battle in several states
- April 26, 2016 |
- Walt Williams
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Seven states have passed legislation blunting a controversial 2015 National Labor Relations Board ruling making it easier for franchise employees to hold franchisors accountable for labor violations, and the International Franchise Association has been encouraging those efforts.
Wisconsin is the most recent state to adopt the measure, which holds that individual franchisees—and not the franchisors themselves—are responsible for employee relations, according to the Capital Times, an alternative newspaper in Madison, Wis. In practical terms, the legislation says that a corporation that owns a franchise— like McDonald's—is not responsible for the wages and benefits of employees who work at any of its stores or restaurants. That responsibility instead falls on the owner or contractor running the store.
Tennessee, Texas, Louisiana, Michigan, Indiana, and Utah have all passed similar legislation. A related bill was passed by Virginia lawmakers but vetoed by Gov. Terry McAuliffe earlier this year.
The various bills are in response to the NLRB's decision to expand the "joint employer" definition to give franchise employees the right to negotiate directly with the franchisor. Business groups blasted the ruling, but perhaps none more loudly than IFA, which has been encouraging both state and federal lawmakers to overturn the board's ruling.
"A franchisee is in business for him or herself. They hire the folks, they fire the folks, they decide what the pay is, what the benefits are," Jeff Hanscom, director of state government relations at IFA, told Capital Times.
Unions and their allies contend large franchise owners are trying to use the legal loophole to skirt labor laws.
"These big corporations, which are holding all the profits, are not being held responsible for upholding the laws of the land and workers get the short end of the stick on this," Wisconsin AFL-CIO Secretary-Treasurer Stephanie Bloomingdale said. http://bit.ly/1VAindq