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Jenna Weisbord, 202-662-0766

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IFA AND U.S. CHAMBER OF COMMERCE APPLAUD TENNESSEE LAW CLARIFYING FRANCHISEE-FRANCHISOR RELATIONS

WASHINGTON, April 17, 2015 – The International Franchise Association, the world’s largest organization representing franchise owners, and the U.S. Chamber of Commerce Workforce Freedom Initiative (WFI) today applauded a new law in Tennessee affirming that franchise and franchisee employees are separate entities. The legislation came in response to the National Labor Relations Board’s (NLRB) efforts to expand joint employer liability under a radical new standard proposed by Richard Griffin, its General Counsel in the Browning-Ferris Industries case and in complaints issued against McDonald’s Corp. and its franchisees as joint employers.

The IFA and U.S. Chamber of Commerce Workforce Freedom Initiative worked together in supporting the Tennessee statute, which applies to state enforcement agencies. The law was approved with bipartisan support in the legislature last month and was signed into law by Governor Bill Haslam on April 10.

“Tennessee has taken a critically important step to protect local, franchise business owners from a pro-union government agency in the National Labor Relations Board which continues with its blatant government overreach and its politically-motivated, radical agenda,” said IFA President & CEO Steve Caldeira, CFE. “IFA and many other groups welcome Tennessee’s initiative and will continue to make our case against the NLRB’s overreach on the joint employer issue. State legislatures and courts across the country agree – and are being increasingly joined by a bipartisan chorus of federal policymakers that franchisors and franchisees are separate entities. The NLRB’s effort to overturn this accepted fact is a threat to businesses, employees and the U.S. economy.”

“Governor Haslam and the legislature deserve great credit for protecting the franchise business model and the jobs and opportunity it creates,” said Glenn Spencer, Vice President of the U.S. Chamber’s WFI. “They are leading the way and other states will follow.”

The law amends Tennessee code to clarify that “neither a franchisee nor a franchisee’s employee shall be deemed to be an employee of the franchisor for any purpose, notwithstanding any voluntary agreement between the U.S. Department of Labor and a franchisee.” The NLRB is conducting hearings to determine if McDonald’s should be considered a “joint employer” with its franchisees. Current law, both state and federal, dictates that franchisors and franchisees are not joint employers; franchisees are solely responsible for setting wages and hours for employees. The Service Employees International Union has urged the NLRB to make the change.

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About the International Franchise Association

Celebrating 55 years of excellence, education and advocacy, the International Franchise Association 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 more than 780,000 franchise establishments that support nearly 8.9 million direct jobs, $890 billion of economic output for the U.S. economy and 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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