Category Archives: Labor and employment law

The Contours of a Franchisor’s Vicarious Liability

In a ruling that reflects a clear understanding of the distinction between the roles of the franchisor and franchisee, the Appeals Court of Massachusetts recently held that Domino’s was not vicariously liable for the acts of its franchisee that resulted in the death of the franchisee’s delivery driver.  LeClairRyan represented the franchisor in the case, Lind v. Domino’s Pizza, LLC, 87 Mass. App. Ct. 650 (July 29, 2015). The facts of the case are tragic.  Alex Morales, a customer, telephoned the store around 2:30 a.m. to order a pizza.  Morales killed the delivery driver, Corey Lind, and was later convicted …

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Federal Labor Officials Step Into the Lion’s Den

Two top federal labor officials engaged in a spirited dialog with two franchise lawyer moderators at the American Bar Association’s annual Forum on Franchising in New Orleans on October 16.  The topic: whether the National Labor Relations Board (NLRB) will fundamentally change the franchise industry. The program had dramatic potential.  NLRB General Counsel Richard Griffin and Dr. David Weil, Administrator of the Wage & Hour Division of the U.S. Department of Labor, faced a lion’s den of more than 800 lawyers representing franchisors and franchisees, none of whom want to see franchisors deemed to be joint employers of franchisee employees. …

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Franchisors Vulnerable to Unfair Labor Practice Allegations

As expected, the National Labor Relations Board (NLRB) recently broadened the definition of joint employer.  In a 3-2 decision, the NLRB adopted the joint employment standard recommended by the NLRB’s General Counsel.  The ruling was issued August 27, 2015, in the case of Browning-Ferris Industries of California, Inc. (BFI). The Browning-Ferris case did not involve franchising, but it will have an important impact on franchising.  Franchisors are now more likely to be deemed joint employers of their franchisees’ employees for purposes of compliance with the National Labor Relations Act.  This is a shock to the franchise industry.

Franchisors Are Not Joint Employers

The National Labor Relations Board (NLRB) caused an earthquake in the field of franchising with the General Counsel’s announcement July 29, 2014, of complaints against McDonald’s USA, LLC.  The NLRB General Counsel (GC) authorized the issuance of complaints of alleged labor law violations against the franchisor as the joint employer with its franchisees.  Those who brought the complaints were employees of franchisees. The prospect of being jointly liable with a franchisee for a franchisee’s labor law violations is shocking to franchisors.  The NLRB GC’s approach is a radical change from more than 30 years of settled law that respects the distinct …

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Franchisees Are Not “Large Employers”

The City of Seattle, Washington, approved a $15 minimum wage law June 2, 2014, the highest minimum wage law in the U.S.  Hourly workers deserve reasonable pay.  And if there is no movement on a change in the federal rate, then I understand the desire of workers and unions to push for higher wages at the local level. But Seattle did go too far in one disturbing respect. The new law views franchisees as large employers simply because they are part of a franchise system. This means that an individual franchisee with a small number of employees may be required to …

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