Unintended Consequences - Joint Employment Revisited

The Contrarian is BACK! Sorry for the long absence but life intervenes and my posts require some motivation i.e. something interesting!

Well some of my franchise colleagues have delivered! In a recent article in the American Bar Association's Franchise Law Journal, "Drawing Lines in Franchisor Support--Is It Necessary and Where Are the Lines to Draw in Today's Joint-Employment Environment?," some of franchising's leading lights (Joyce Mazero, Karen Boring Satterlee, Eric H. Karp, Leonard H. MacPhee, Jess A. Dance & William W. Sentell), discuss the unintended consequences from the joint-employer debacle. 

(For some background check out these prior posts: NLRB Decision and Joint Employer Controversy...Trumped? There are updates generally available but we don't have the room here)

Most striking about the article is the reporting from a survey the authors and the International Franchise Association conducted. The results show that a "substantial majority of brands... report reducing or eliminating certain services." What does this have to do with joint employment? Well franchisors are trying to avoid being tagged as the "joint employer" of its franchisees' employees. So the reduction or elimination of  franchisor guidance and services that deal with "employees" is one way to say "Hey, we don't have anything to do with franchisees' employees, that's the franchisees' job!"

Now for the result of the survey (quoting from the article):

• Eighty-six percent of the franchisors and fifty-three percent of the franchisees indicated that training provided to franchisee employees had been reduced or eliminated.

• Sixty-six percent of the franchisors and sixty-seven percent of the franchisees indicated that the franchisor had reduced or eliminated providing operations and performance standard recommendations.

• Eighty percent of the franchisors and fifty-three percent of the franchisees indicated that franchisor-supplied advice/guidance regarding staffing and scheduling had been reduced or eliminated.

• Forty-six percent of the franchisors and fifty percent of the franchisees indicated that franchisor-supplied advice/guidance regarding personnel manuals and human resources had been reduced or eliminated.

• Seventy-three percent of the franchisors and sixty-seven percent of the franchisees indicated that franchisor-supplied advice/guidance regarding compensation to employees had been reduced or eliminated.

• Thirty-three percent of the franchisors and sixty percent of the franchisees indicated that franchisor-supplied advice/guidance regarding employee benefit programs had been reduced or eliminated.

• Fifty-three percent of the franchisors and forty-three percent of the franchisees indicated that franchisor-supplied advice/guidance regarding employee standards/performance or assessments had been reduced or eliminated.

Wow, the "joint employer" advocates caused some changes in the franchise world...but not the ones they intended!