American Franchise Act

Protection of Employee Benefit Plans: Under Section 3(a), adding Section 20(a)(1)(B) to the National Labor Relations Act, a franchisor's control over benefits does not include letting a franchisee participate in the franchisor's benefit plans like health insurance or pension plans through an arm's-length contract. This is positive because it can make it easier for local workers to access larger company benefit plans without risking the independent status of their local employer.

Preservation of Brand Standards and Training: Under Section 3(a), adding Section 20(a)(1)(G) to the National Labor Relations Act, a franchisor can set brand standards, offer training materials, and provide operational support without being deemed a joint employer. This is beneficial because it helps maintain consistent product quality and service safety for consumers while allowing local businesses to thrive.

Limited Joint Accountability: Under Section 3(a), adding Section 20(b) to the National Labor Relations Act, a franchisor is only considered a joint employer if it possesses and exercises substantial direct and immediate control over essential employment terms. This could be seen as a negative for workers because it makes it much harder to hold the large parent company accountable for labor violations or unfair practices happening at a local franchise location.

Exclusion of Ongoing Legal Proceedings: Under Section 4, the Act and its amendments do not apply to any legal proceeding commenced before the date of enactment. This is a potential drawback for individuals currently involved in active disputes regarding joint employer status, as they will not receive the clarity or limitations provided by this new law.