Elizabeth D. Sigety was quoted in The Franchise Times article, "NLRB's Browning Ferris Ruling Could Apply in 'Crazy Ways'." Full text can be found in the August 28, 2015, issue, but a synopsis is below.
The National Labor Relations Board ruled that Browning Ferris Industries qualifies as a "joint employer" alongside one of its subcontractors for the purpose of negotiations with unions. Considering that Browning Ferris isn't a franchisor, many franchisors seem worried over the decision in this case as well as many others.
"I think this is a big one," said Elizabeth Sigety. "The joint employer test is going to a standard that scares the franchise industry, and rightfully so."
In the past, the standard was based around control, Sigety said; for example, does the franchisor exercise direct control over an employment practice. "It's now kind of a shared decision-making type of standard. If they have input, if they collaborate, if they confer," a franchisor may be ruled a joint employer along with its franchisee, she said.
The NLRB wrote that parent companies should not be absolved of their responsibilities to workers far down the subcontracting chain. The board has stood by this stance since last August when it ruled that McDonald's was jointly responsible for lawsuits against franchisees.
"Everybody doesn't know where the line is. As a lawyer I have a hard time telling my clients what to do," Sigety said.
Most notable in yesterday's ruling, Sigety says, is the wording of the minority opinion, in which two members that disagreed with the majority "went through a list of industries that could be affected" by the ruling, "and they listed franchising."
"I think it's very broad," Sigety said. "You could think of all sorts of crazy ways this could apply, and nobody really knows."
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