International Franchise Association comments on Subway/DOL Agreement

  • August 1, 2016

IFA comment on Subway/DOL Agreement   path

One of many issues with this agreement is that it increases the risk on employers being named a joint employer under the still developing standard promulgated by the NLRB and adopted by several other government agencies.


International Franchise Association Vice President of Government Relations & General Counsel Elizabeth Taylor released the statement below following the announcement that the U.S. Labor Department Wage & Hour Division and SUBWAY have entered a voluntary agreement to encourage compliance with the Fair Labor Standards Act by its franchise owners.

“Educating franchisee owners and facilitating compliance with all applicable laws is a top priority of the International Franchise Association. We commend franchisors’ efforts to further that goal by providing guidance to their franchisees to help them comply with applicable labor laws. However, these initiatives have been dramatically complicated by the expanded National Labor Relations Board issuance of a new, vague joint employer standard.

“Legitimate concerns now exist as to which franchisor actions cross the line and could serve as evidence of a joint employment relationship in future litigation or a government enforcement action. Without assurances that their compliance efforts will not be used against them by another government agency, or plaintiff attorneys, franchisors are caught in an inevitable catch-22. Further, these concerns are not limited to franchise businesses; the NLRB’s new standard has created uncertainty in all supplier and independent contracting relationships.

“These concerns underscore the need for Congress to act quickly to clarify the definition of joint employment and provide a bright-line standard for businesses. Doing so will not only increase economic growth and facilitate the creation of jobs, but also will ensure greater compliance with wage and hour laws and benefit millions of employees nationwide.”