The International Franchise Association is hailing a ruling earlier this week from a federal judge in California as a win in the battle to keep individually-owned franchisees separate from their corporate franchisors.
The business group has been fighting the National Labor Relations Board, which made moves recently to change the definition of joint-employer status.
In the California case, Terrance Vann, a massage therapist who worked at various Massage Envy spa locations, sued franchisor Massage Envy Franchising and its franchisees, Charis Group LLC and OC Wellness Group Inc., for violating California’s minimum-wage laws.
On Tuesday, the judge ruled that Massage Envy Franchising is not a joint employer of its therapists and cannot be liable for any wage violations committed by Charis Group.
Although the national company set standards, procedures and rules for local store operators, the judge said there was not evidence that the franchisor had joint-employer with its franchisees and controlled employees’ work schedules.
“These rulings reinforce IFA’s view that recent moves by the NLRB general counsel to broaden the definition of joint employer and make new law run counter to the long-held understanding of the franchise business model and established law,” said Robert Cresanti, IFA’s executive vice president of Government Relations & Public Policy.
“Should brand companies and local franchise owners, be considered joint employers, it will substantially impact growth and job creation in what promises to be the fastest growing business sector in the US economy.”