In response to concerns of franchisors that recent National Labor Relations Board (NLRB) actions threaten to undermine the common understanding of a franchisor-franchisee relationship, the Texas Labor Code was amended by the Texas Legislature. The amendment, which goes into effect on September 1, 2015, was introduced to protect franchisors from unmitigated exposure to employment claims asserted against franchisees. The amendment is reportedly in response to the NLRB’s General Counsel issuance of unfair labor practice complaints asserting that certain franchisors are “joint employers” with their franchisees. Specifically, S.B. 652 amends the Texas Labor Code to confirm that a franchisor is not considered an employer of its franchisee’s workers for any purpose, including employment discrimination, wage and hour laws, workers compensation, and workplace safety.
Home > State Law Articles > Texas > General (TX) > New Texas Law: Is it Enough to Ease Concern Over Franchise Liability for Employment-Related Claims?