As reported by POLITICO, Rep. Steve Chabot (R-Ohio) today introduced a bill that would shield franchisers from certain joint-employment lawsuits.
The so-called “Trademark Licensing Protection Act” would bar franchisers from being classified as a joint employer — and therefore liable for labor violations by its franchisees and contractors — if its actions enforce trademark protection standards.
The bill would update the Trademark Act of 1946, clarifying that enforcing trademark standards “may not be construed as establishing an employment or principal-agent relationship between the owner of the mark and the related company.”
Business groups have been pushing Congress to rewrite the standard for joint employment as defined by the National Labor Relations Board. Under former President Barack Obama, the board ruled that franchisers need exercise only indirect control over franchisees to be held liable.
“Franchise businesses are in a Catch-22,” Matt Haller, the head lobbyist for the International Franchise Association, said in a statement. “They are at once required to maintain standards and possibly liable for efforts to maintain them. This bill can clarify these competing standards to allow for franchise businesses to grow, train workers, and strengthen local economies.”