IFA Statement On NLRB Dropping Joint Employer Push: “A Landmark Win For Franchise Small Businesses”

July 19, 2024

Stresses the need to remain vigilant to future NLRB threats of joint employer; urges Senate to reject the nomination of NLRB Chair Lauren McFerran

WASHINGTON – The International Franchise Association (IFA) today released the following statement after the National Labor Relations Board (NLRB) withdrew its appeal of the March 2024 ruling by the Fifth District Court of Texas that struck down the NLRB’s joint employer rule:

“This announcement means that the latest attempt to implement joint employer is finally finished and represents a landmark victory for franchise small businesses in communities across America,” said Matt Haller, IFA president and CEO. “The franchise business model is the best vehicle for American workers to generate upward mobility and create small business ownership from all walks of life. Make no mistake: while today’s news means the current threat is behind us,IFA will remain vigilant against any attempts to target the franchise model or our members.”

The expanded joint employer rule, issued in October 2023, would deem franchisors and franchisees jointly liable, taking away the independence of franchise owners – the hallmark of the franchise business model. When a similar rule was issued in 2015, it cost franchised businesses $33.3 billion per year, resulted in 376,000 lost job opportunities, and led to 93% more lawsuits.

Haller also called for the Senate to reject the nomination of NLRB Chair Lauren McFerran, one of the architects of the proposed expanded joint employer rule, for a third five-year term. If McFerran is confirmed by the Democratic-controlled Senate, the five-member board would continue to have a Democratic majority until August 2026 when the term of Biden appointee David Prouty expires.

“We intend to work shoulder-to-shoulder with our bipartisan coalition of allies and champions in the House and Senate to prevent the NLRB from implementing the expanded joint employer rule by other means.”

In their ruling, the Fifth District Court ruled that the NLRB exceeded the scope of its authority and violated the Administrative Procedure Act (APA) by failing to respond to comments regarding the rule’s harmful economic consequences.

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About the International Franchise Association:

Celebrating over 60 years of excellence, education, and advocacy, the International Franchise Association (IFA) is the world’s oldest and largest organization representing franchising worldwide. IFA works through its government relations and public policy, media relations, and educational programs to protect, enhance and promote franchising and the approximately 806,270 franchise establishments that support nearly 8.7 million direct jobs, $858.5 billion of economic output for the U.S. economy, and almost 3 percent of the Gross Domestic Product (GDP). IFA members include franchise companies in over 300 different business format categories, individual franchisees, and companies that support the industry in marketing, law, technology, and business development.

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