In 2015, the National Labor Relations Board (NLRB) broadened the definition of “joint employer,” which for 30 years had separated independent franchisees and franchisors, giving more “actionable control” to the company over an independent entity even if it does not exercise it. By expanding the definition of indirect control implies employee liability for both an entity and a franchise or third party agency. The Browning-Ferris decision of 2015 has been appealed to the U.S. Court of Appeals for the District of Columbia Circuit and will be heard on March 9.
Until then, pizza operators fear that people will avoid becoming franchisees altogether due to loss of the independence and ability to run their own business under the new joint employer standard. Forty-five percent of pizzerias in the U.S. are franchised. The International Franchise Association conducted a recent poll that found 66% of voters supported reversing the new joint employer standard to allow franchises the ability to operate as independent businesses.