IFA Submits Comments on EEOC Joint Employer Standard

By: Doan Phan

On Tuesday, July 5th, 2016, IFA submitted its comments on the EEOC’s Proposed Enforcement Guidance on National Origin Discrimination. The purpose of the Proposed Guidance, according to the EEOC, is to “serve as a reference for Commission staff conducting outreach, for EEOC lawyers bringing litigation, for employers, employees, and practitioners seeking detailed information about the EEOC’s position on national origin discrimination and for employers seeking ‘promising practices.’”

However, the EEOC went beyond the subject of national origin discrimination by promoting a standard of joint employment established by the NLRB’s decision in Browning-Ferris. This standard upends decades of precedent and vastly expands the definition of joint employer by holding that indirect and reserved control by an employer may now be sufficient to establish a joint employment relationship. The repercussions from the NLRB’s decision are concerning for the franchise model because it would mean that franchisors may be held as a joint employer with their franchisee. The standard effectively ignores the critical distinction that franchisors and franchisees are distinct legal entities, a distinction that is important to continuing the franchise model that allows local entrepreneurs to successfully operate a business with the expertise and guidance of a larger enterprise.

To combat the debilitating effects of the new joint employment standard, IFA has been actively advocating against the recent joint employment standard. In its comment to the EEOC, IFA emphasized the huge opposition towards the new standard from a number of organizations, including the Chamber of Commerce, Microsoft, National Retail Federation, American Hospital Association, and many others. IFA also noted the congressional opposition to the new standard on both the federal and state level. In both the United State Senate and House of Representatives, two bills have been introduced, H.B. 3459 and S. 2015, that would amend the standard. While among the states, Georgia, Indiana, Louisiana, Michigan, Oklahoma, Tennessee, Texas, Utah, and Wisconsin have all passed state laws clarifying that employees of franchisees are not generally considered employee of franchisors.

As IFA noted in its comment, the EEOC’s decision to include an unpopular and controversial new joint employer standard that has little to do with national origin discrimination is inappropriate. Instead of focusing on the stated purpose of the Proposed Guideline, the inclusion of a joint employer standard is more harmful than it is informative to companies and firms with questions on national origin discrimination. In raising this issue through its comment to the EEOC, IFA continues in its efforts to advocate against this new joint employment standard.

Doan Phan is a Legal Intern at the International Franchise Association

Date Posted: 2016-07-07 10:34