Since the National Labor Relations Board’s (NLRB) 2015 Browning-Ferris decision, the federal joint employer standard has changed repeatedly through NLRB decisions, rulemaking, and litigation. The standard has changed four times in the last decade, creating continuing uncertainty for franchisors and franchisees about when they may be treated as responsible for the same employees.

• 2017: The NLRB tried to restore the pre-2015 joint employer standard. In its 2017 Hy-Brand decision, the NLRB reversed the expanded Browning-Ferris approach and returned to the longstanding direct and immediate control standard. The NLRB later vacated the decision on procedural grounds, so the Browning-Ferris decision remained in effect.

• 2020: The NLRB adopted through rulemaking the direct-and-immediate-control joint employer standard. The NLRB’s 2020 joint employer rule established a standard based on substantial direct and immediate control over essential terms and conditions of employment. The rule restored the standard that governed the franchise relationship before 2015. SEIU challenged the rule, but the case was stayed in 2021 pending another NLRB rulemaking following a shift in the White House.

• 2023–2024: In 2023, the NLRB issued a final joint employer rule that would have treated indirect and reserved control as sufficient to establish joint employer status. A federal court vacated that rule, leaving the 2020 rule in place.

• 2025: SEIU revived its challenge to the NLRB’s 2020 joint employer rule, and another change to the joint employer standard looms.

This decade of NLRB decisions, reversals, rulemaking, and litigation demonstrates the need for the American Franchise Act (AFA) to establish a clear, durable, and predictable federal joint employer standard for franchise businesses. The picture is similar under the FLSA: the Department of Labor (DOL) issued a joint employer rule in 2020, rescinded it in 2021, and in April 2026 proposed a new rule that would again change how joint employer status is determined.

The AFA would codify a joint employer standard for franchising that is consistent with historical precedent and the NLRB’s current joint employer rule, and would apply that same standard under the FLSA, where the DOL has had no joint employer regulation in place since 2021.

• Source: https://www.franchise.org/wp-content/uploads/2026/05/AFA-Backgrounder-2026.pdf
• Source: https://www.franchise.org/advocacy/american-franchise-act/