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Paul Zimmerman

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NLRB’s Joint Employer Decision Could Uproot Hotel Franchise Model

The National Labor Relations Board (NLRB) has likely thrown a mammoth monkey wrench in the traditional hotel franchisor/franchisee model.

On August 27, 2015, in its highly controversial Browning-Ferris Industries of California (BFI) decision, the NLRB revised its test for the joint employer doctrine, dramatically easing the criteria for a company to be considered a joint employer. For many decades, the traditional joint employer test focused on governance, wage and supervision decisions, and control. The test excluded “limited and routine” oversight and supervision, because “hiring, firing, discipline, supervision, and direction” were not considered essential or meaningful to the employment relationship. Under the new standard, a finding of joint employment is much broader, and only requires that a business exercise “indirect” (or potential) control over workers. Hence, under the new test, a company may not only be held liable for its own labor violations, but also for those of the other entity. 

Click here to view the full article, originally published in the CH&LA Industry Newsletter