TheBigEasy_burleson

The Big Easy Proves Anything But

March 31, 2016 / by / No comments

On March 17th, I presented on a panel at the ABA 2016 Midwinter Meeting of the Employment Rights and Responsibilities Committee in New Orleans. Also known as “The Big Easy” and “The Crescent City”, New Orleans is one of the most iconic and loved cities in the United States with its own unique food, culture, and music. If you have never visited this historic town, you should. It’s not all Bourbon Street shenanigans, there’s something for everyone.

The title of the panel presentation was “Asserting and Defending Against Joint Employer and Franchisor/Franchisee Employment Claim—Tossing the Hot Potato.” My colleagues on the panel, mediated by an Employment and Labor defense attorney, included a class action labor attorney who generally represents employees, a senior attorney from DirectTV, and a Deputy Regional Solicitor from the US Dept of Labor.

During the panel presentation, the audience learned (a) the Dept of Labor intends to extend joint employment as far as it can, (b) the plaintiffs’ bar is closely monitoring this issue, (c) joint employment extends well past the franchising industry, and (d) there does not appear to be a quick and easy solution to the issue.

During the presentation, I continued to emphasize the need for franchisors to review the franchise manuals, agreements and field operations of its franchise system in order to determine whether language or operations procedures have been expanded to the extent that may result in the finding of joint employment. Additionally, inclusion of indemnification clauses in franchise agreements moving forward is also something franchisors should consider. Based on the opinion of DOL, there is a very fine (blurred) line between enforcement of trademark rights and systems standards and control which can lead to joint employment status.

While my time in the Big Easy was as enjoyable as many of my previous trips, clarification of what constitutes joint employment remains as murky as the Mississippi River water which flows around and defines the city of New Orleans.

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Texas Independence Day is a good time to assess your franchise’s own independent operations.

March 2, 2016 / by / No comments
Last month, I attended the International Franchise Association’s Annual Convention in San Antonio.  The convention was a huge success and touched on many different aspects of the franchise business model. However, the overriding topic of the convention was naturally the ongoing issue of joint employment and the actions being taken by various governmental bodies to undermine the integrity of franchising.
While many have heard of the Alamo, most don’t know San Antonio is the 7th largest city in the U.S. And most don’t know that the Menger Hotel, my accommodations while there, was where Teddy Roosevelt recruited his legendary Rough Riders. Today, on the 180th anniversary of Texas’ Declaration of Independence, I am reminded of the massacre that occurred at the Alamo (and Goliad) and the subsequent Texas victory at San Jacinto.
During those days, uncertainty pervaded for a far different reason than the uncertainty that plagues the future of the franchise business model as we know it today.  During the convention, opinions and advice varied widely— some presenters suggesting franchisors fine tune their systems all the way to some encouraging patience while the courts turn back rulings and activities by the NLRB and DOL.
While patience is, indeed, necessary during these uncertain times, I believe that franchisors can take steps to feel prepared. Step back, evaluate systems’ manuals and operations, and ascertain whether certain language or field operations that could be viewed as exceeding the control threshold have become part of the franchise’s business and, consequently, could push the system into the joint employment world. These reviews are simple, relatively inexpensive, and can pay huge dividends when compared to the potential legal costs usually associated with an audit by state or federal government.
Happy Texas Independence Day and here’s to the eventual success of restoring the integrity of the franchise business model.

“As broad as possible” employee definition leaves franchisors and franchisees guessing

January 26, 2016 / by / No comments

Last week, the administrator of the US Department of Labor’s wage and hour division published his anticipated interpretation of the joint employment issue under the Fair Labor Standards Act.  While providing some clarification, Administrator David Weil made clear that the DOL views the expansive definition of “employ” to be far broader than the common law control standard and will be viewed in a context that will be “as broad as possible.”  This broad interpretation, specifically in the vertical joint employment analysis, will leave franchisors and franchisees guessing where the boundaries are when faced with internal business decisions and whether certain aspects of their franchise concepts will cross the line in to the joint employment world.

Read the full opinion at United States Department of Labor: Administrator’s Interpretation No. 2016-1

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