Franchisors need to state in franchise documents that it is the franchisee's responsibility if there is a breach by the activity of its own employees. He further stated that while franchisors have in place policies regarding social media, it is the franchisee's obligation to train and monitor their employees' compliance with the franchisor's standards. Mathison explained that given the data breaches that are occurring more rapidly in franchise systems today, those clauses should state that franchisees are also obligated to comply with those laws. It should now be expanded to include federal labor law, and all state and federal employment laws.Īs an added bonus, although not related to the joint employer topic, the "obey all laws" clause should also include language on data privacy laws. The clause states that franchisees are required to operate in accordance with all state and federal laws. He said in addition to looking at the "relationship and independent contractor" language that exists today in most, franchisors should also look at the "obey all laws" language, which also exists in most agreements. Mathison went over the documents franchisors need to review, naming the franchise agreement as the first. the training the franchisor provides for franchisee employees and how they interact with franchisees.the systems it has in place and what the company actually does.the franchise company's documentation and what it says.Regarding vicarious liability in joint employer cases, Mathison said plaintiff attorneys generally look at these factors: He said McDonald's "through its use of tools, resources and technology, engages in sufficient control over its franchisees' operations, beyond protection of the brand to make it a putative joint employer with its franchisees. Mathison explained how entities could be ruled as joint employer. It alleges the hamburger chain possessed and/or exercised control over the labor relations policies of franchisees. The NLRB charged McDonald's with liability for unfair labor practices. One is against Browning Ferris, temporary employment agencies, and the other against McDonald's Corporation, a franchisor. Mathison cited two recent joint employer developments, two lawsuits filed by the National Labor Relations Board. He explained that although the actual laws have not changed, the attention the issue is receiving from franchisee attorneys, unions, the Labor Board and other government agencies is worrisome. The message was clear: "You must use explicit language that states franchisees make all employment decisions in their businesses."Įmployment attorney Mark Mathison said it is a new day on the joint employer, vicarious liability landscape for franchisors because the standards on various fronts may be changing. Gray Plant Mooty attorneys cautioned that referring to franchise owners as "independent contractors" in disclosure documents will no longer suffice. One of franchising's most powerful law firms issued a warning to franchisor clients last month in its "joint employer" webinar session.
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