Franchising & Distribution Law Blog

Most franchisors will be happy to hear that the NLRB on Dec. 14 nixed the Browning-Ferris expansion of the joint employer doctrine, which has been of concern to the franchise industry for several years. The new case is Hy-Brand Industrial Contractors, Ltd. and Brandt Construction Co, 361 NLRB No. 156 (Dec. 14, 2017). Even though the board held that Hy-Brand and Brandt are collectively joint employers for purposes of the National Labor Relations Act, the joint employer standard applied is a significant departure from the Browning-Ferris standard.

Unlike some states’ franchise laws, the Missouri Franchise Act gives limited protection to franchisees. However, it does provide that if a franchisor fails to give 90 days’ notice of cancellation or termination, the franchisee may be awarded “damages sustained, to include loss of goodwill, costs of suit, and any equitable relief that the court deems proper.” A recent case provided much-needed clarification on how damages are measured if a franchisor fails to give a proper notice of termination.