NLRB Issues Joint Employer Decision Potentially Affecting Franchisors

Yesterday, the National Labor Relations Board ("NLRB") issued a landmark ruling that greatly expands the definition of corporate employee under the "joint employer" standard. The NLRB's decision is significant for franchisors among others because it will likely affect the arms-length relationship that franchisors have sought to preserve with their franchisees' employees.

Under the previous standard, a company such as a franchisor could be a joint employer if it had direct and immediate control over working conditions. Under the standard announced yesterday, a company such as a franchisor can be a joint employer if it has indirect control over working conditions or reserves the right to exercise that authority.