Cornell Roundtable: Joint-Employer Doctrine Hinges on Control

May 12, 2016

Contact: Erica Heim, 607.255.6574, erh72@cornell.edu

FOR IMMEDIATE RELEASE:
Cornell Roundtable: Joint-Employer Doctrine Hinges on Control

Ithaca, NY, May 12, 2016 - Recent rulings by the National Labor Relations Board (NLRB) have brought scrutiny to the traditional employment relationships between franchise companies and their franchisees. The outcomes of these so-called "joint employer" rulings were examined at the most recent roundtable held by the Cornell Institute for Hospitality Labor and Employment Relations (CIHLER). The session, held in May at the Cornell School of Hotel Administration, put together hospitality industry human resources executives and legal counsel, together with the general counsels of the Equal Employment Opportunity Commission and the NLRB (the board), as well as two former NLRB members.

CIHLER Director David Sherwyn explained that a key message of the roundtable was that the issue hinges on the conflict between brand standards and the "control test" used by the courts and the administrative agencies. "The board takes the position that the franchisor is exercising too much control to avoid joint employer liability if it sets polices or practices that would make it necessary for the franchisor to be at the table for meaningful collective bargaining, but that enforcing brand standards should not lead to such a holding. Meaningful collective bargaining versus brand standards is not always a clear distinction, however. For example, when guests walk into a Moe's Southwestern Grill, the employees scream: "Welcome to Moe's." Assuming this is a brand standard, employees who are tired of screaming can't bargain without the franchisor at the table. So, when brand standards determine employee behavior is there joint employment or not?"

The management representatives, government leaders, and employee advocates at the table all agreed that it is poor public policy for different employment structures to be used in order to suppress wages and to violate anti-discrimination laws, wage and hour laws, and the National Labor Relations Act. The question is, what is the best public policy to protect employees and also to allow the economy to grow and people to be employed? The participants came up with a number of ideas and proposals that they will vet and bring back to subsequent roundtables.

About the Cornell Institute for Hospitality Labor and Employment Relations
The Cornell Institute for Hospitality Labor and Employment Relations was established in 2013 as a platform for students, employers, employees, unions, and their advocates involved in the hospitality industry. The institute's mission is to support educational programs, sponsor and disseminate research, and hold conferences and roundtables dedicated to modernizing labor and employment relations, analyzing labor and employment law, and improving human resource management and leadership in the hospitality industry. To achieve this goal, the institute supports classes focusing on labor and employment relations; disseminates empirical, theoretical, and doctrinal scholarship; and sponsors conferences and roundtables.

Center Members: Barnes & Thornburg LLP • The Beverly Hills Hotel and Bungalows • Buchalter Nemer PC • Caesars Entertainment Corporation • Commune Hotels • Conn Maciel Carey PLLC • The Cosmopolitan of Las Vegas • Davis & Gilbert LLP • Deloitte LLP • Epstein Becker Green • Four Seasons Hotels and Resorts • Fox Rothschild LLP • Hilton Worldwide • Hotel Bel-Air • Hyatt Hotels Corporation • InterContinental Hotels Group • Interstate Hotels & Resorts • Jones Day • Kane Kessler, P.C. • Littler Mendelson • Loews Corporation • LRP Publications • Marriott International • PwC • Proskauer • Regan Development Corporation • Seaview Investors LLC • Starwood Hotels and Resorts • Sunstone Hotel Investors • Taylor English Duma LLP • White Lodging