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March 18, 2016

Plenary with Griffin and Weil Looks at Joint Employer Liability

Antonia Scholz, Cheng Cohen LLC

The highlight of the 38th annual Forum on Franchising meeting in New Orleans for many attendees was the plenary session featuring Richard Griffin, General Counsel for the National Labor Relations Board (NLRB), and David Weil, Administrator of the Wage and Hour Division of the U.S. Department of Labor (DOL). This plenary session delved into the emerging tension between trademark law, which requires a franchisor to exercise substantial control over how its marks are being used, and a recent line of labor and employment cases and interpretive opinions, which have assigned joint employer liability to franchisors for exercising too much control over the operations of their franchisees.

The plenary, moderated by Jonathan Solish of Bryan Cave, and Eric Karp of Witmer, Karp, Warner & Ryan LLP, began with the question of why the franchise model is in the hot-seat on this emerging issue. Weil answered by identifying franchising as one business model, among others, that has a high rate of non-compliance with labor laws, as well as an increasingly “fissured” relationship between employees and the companies that dictate the terms of their employment. Griffin added that the NLRB’s focus on the franchise industry arose from a recent initiative to raise minimum wages among lowincome workers, a high percentage of whom are employed by traditionally franchised businesses such as fast food restaurants.

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Antonia Scholz, Cheng Cohen LLC