Regulating Mobility Limitations in the Franchise Relationship as Dependency in the Joint Employment Doctrine

Abstract

Franchisors often impose exhaustive operational standards on franchisees, and enforce those standards by restricting the mobility of their franchisees and their franchisees’ employees. But courts often ignore mobility limits when applying joint employer doctrine. This Article argues that courts and agencies should be more likely to find, and presume, that franchisors and their franchisees are joint employers under federal and state employment law based on proof that a franchisor restricts the mobility of franchisees or their employees. In so doing, this Article traces how the Chicago School’s efficiency arguments in favor of relaxing antitrust law enforcement of vertical restraints developed into a presumption that franchisors are not joint employers, despite modern antitrust law litigation showing that mobility restraints can harm workers. It concludes that preventing franchisor-imposed mobility restraints from harming workers will require courts, legislatures, and agencies to center subordinate firm dependency on lead firms in the joint employer doctrine.

Keywords: Joint employment, mobility, franchising, employment law, employment discrimination law, law and economics, antitrust law

JEL Classification: K31, K21, L24, J42, J62, J83,