Governor Nathan Deal has signed Georgia Senate Bill 277,
the “Protecting Georgia Small Business Act.”
The one-page bill amends the Official Code of Georgia to
provide that “neither a franchisee nor a franchisee’s employee shall be deemed
to be an employee of the franchisor for any purpose,” excepting as it relates
to workers’ compensation.
Sponsors of the new law are listed as State Senators John
Albers (56th District), Charlie Bethel (54th), William Ligon,
Jr. (3rd), David Shafer (48th), Fran Millar (40th), and Mike Crane (28th).
The law comes as the National Labor Relations Board
continues to consider whether McDonald’s USA (a franchisor) should be
regarded as a joint employer with certain McDonald’s franchisees and therefore
responsible for any unfair labor practices of its franchisees.
McDonald’s USA has argued that it did not exercise
sufficient control over franchisees’ employment policies and practices to be
regarded as a joint employer.
While the NLRB has not yet issued a final ruling, the
current board seems to be headed towards a decision to treat McDonald’s USA as
a joint employer, although changes to the Board that may come after the November Presidential and Senate elections may result in changes to the Board's composition and alter this course of action.
Labor unions reportedly involved in this case include the
Service Employees International Union (SEIU), Fast Food Workers Committee,
Pennsylvania Workers Organizing Committee, Workers Organizing Committee of Chicago,
Los Angeles Organizing Committee, and Western Workers Organizing Committee.
While most franchisors and franchisees oppose the
joint-employer concept, some individuals have argued that making franchisors joint employers
strengthens the bargaining hand of franchisees.
Franchisee lawyer Robert Zarco is quoted
on the Blue MauMau web site as saying to Dunkin' Donuts franchisees that with the potential NLRB ruling "You
can level the playing field. Here is your opportunity to level the playing
field on a silver platter. Franchisors, many of them have crossed the line. They
have crossed the line from giving you guidance and recommendations and
suggestions to dictating, mandating and requiring what you should do as an
independent business owner."
Zarco argues that up until the NLRB ruling, most
franchisors had the best of both worlds. They were able to effectively control
everything from hiring to how a tomato is sliced at their franchised locations,
yet – at the same time – could claim they were not at fault when injuries or
things went wrong at their restaurants.
The state’s new law is largely symbolic as it does not
apply to federal decisions, such as those of the NLRB, but places the state
squarely on the side of franchisors.
Georgia is home to several corporate fast-food
franchisors, not the least being Chick-fil-A.
You can read the text of the new law here.
