Restaurant Assoc.: Preserve Current Joint Employer Rule

National Restaurant Association,

The National Restaurant Association and the Restaurant Law Center(Opens in a new window) (Law Center) submitted comments to the National Labor Relations Board (NLRB) regarding the board’s new proposed joint employer standard that would rescind what it codified less than three years ago. In their submission, the Association and the Law Center called on the NLRB to maintain the clear and responsible joint employer standard established by the “Joint Employer Status Under the National Relations Act” (the “2020 Final Rule”) and to forfeit its efforts to withdraw and replace the existing standard.

“The 2020 Final Rule took effect after the Board thoroughly considered tens of thousands of public comments and carefully analyzed the legal landscape,” said Angelo Amador, executive director of the Restaurant Law Center. “In our joint comments, we urged the Board not to rescind and replace the current standard for determining joint employer status with a Proposed Rule as it would destabilize labor-management relations and harm restaurants across the country.”

The NLRB’s 2020 Final Rule codified the long-established “direct and immediate” joint employer standard providing clear and stable guidance for foodservice employers and employees. According to the Law Center and the Association, the new Proposed Rule does the opposite and threatens to hold restaurant owners to amorphous joint employer guidelines. The vague, proposed new standard lacks the clear boundaries currently in place and creates undue burdens on operators trying to understand what qualifies as joint employer status.

“The Proposed Rule is of particular concern to the franchise sector of the foodservice industry because it fails to provide meaningful guidance to confidently determine if a franchisor’s necessary exercise of control to protect its brand and trademarks would trigger joint employer status,” said Jordan Heiliczer, director of Labor and Workforce Policy at the National Restaurant Association. “If the Board does not reject the Proposed Rule, at a minimum it should make expressly clear that the Proposed Rule does not apply to franchise agreements or other provisions relating to legitimate business reasons such as brand control and product quality.”

“This Proposed Rule is a step backward from the 2020 Final Rule that robs restaurant operators of certainty and predictability. Even the U.S. Small Business Administration Office of Advocacy(Opens in a new window) has expressed concerns that the Board’s new joint employer standard is too ambiguous and broad, providing no guidance for contracting parties on how to comply or avoid liability,” said Amador.

The complete submission by the National Restaurant Association and the Restaurant Law Center can be found here(Opens in a new window).

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