Franchisor Power as Employment Control
55 Pages Posted: 10 Mar 2021 Last revised: 1 Sep 2021
Date Written: January 17, 2021
Labor and employment laws are systematically underenforced in low-wage, franchised workplaces. Union contracts, and the benefits and protections they provide, are nonexistent. The Fight for Fifteen movement has brought attention to the low wages, systemic violations of workers’ rights, and lack of collective representation in fast-food franchises. Given that franchisees can be judgment-proof and cannot set industry standards, the deterrence, remedial, and collective bargaining goals of labor and employment laws can depend on holding the franchisor (the brand) responsible under the joint employer doctrine. In a series of cases, however, a dominant approach has emerged that essentially foreclosed the possibility that franchisors and their subordinate companies (franchisees) are joint employers. Recent political developments mirror this foreclosure and pose a historic narrowing of the scope of joint employer liability. This Article challenges courts, administrative agencies, and legislators to take more seriously franchisors’ power over their franchisees and the working conditions of low-wage fast-food workers. To advance this argument, we rely on insights from an original empirical data set of (1) forty-four contracts between leading fast-food franchisors and franchisees in 2016 and (2) comprehensive documentation provided in joint employer legal proceedings against two major fast-food franchisors in the United States: McDonald’s and Domino’s Pizza. Our proposed “power as employment control” construct considers, within the confines of existing doctrines, the cumulative effects of lead franchisor firms’ reserved (unexercised) and exercised influence over the working conditions in their subordinate businesses. By giving power more consideration in analyses of joint employer liability, courts, administrative agencies, and policy-makers can bring more justice and consistency to this hotly contested area.
Keywords: Labor law, employment law, franchising, joint employment
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