Assemblymember Holden Offers A New Solution For Protecting Fast Food Restaurant Employees Through Joint Liability

For immediate release:

Sacramento, CA – Assemblymember Chris Holden's legislation, AB 1228, related to a franchisor's role in their franchisee's compliance of employee rights, passed the Assembly Labor and Employment Committee today.

"We have the ability to do more for fast food employees by focusing on the relationship between franchisors and their franchisees," said Assemblymember Chris Holden. "Let's make it easier for franchisees to pay, support, and protect their employees."

Some franchisees are violating employee rights at a far higher rate than establishments owned and operated by the franchisor. In many ways, this can be completely out of the franchisee's control although they are often the ones suffering penalties while employees bare the blow of flawed franchise models.

This legislation makes any agreement between franchisors and franchisees that waives the franchisor's liability for such violations unenforceable and contrary to public policy. Many franchisees find themselves in a chokehold by franchisor terms, forcing them to choose between profitability and complying with employee protection regulations. Under AB 1228, franchisees have the opportunity to file action against their franchisor if abiding by the franchisor's terms infringes on their ability to comply with employment laws.

"I believe many franchisees want to do right by the people that work for them but may not see it as possible under their franchisor's terms and conditions. This can help to provide some relief while protecting employees and businesses," said Assemblymember Chris Holden.

Franchisors will have to be more considerate of raising the cost of the franchise to the franchisee, as they can be held accountable for any changes that create a barrier to compliance with prescribed employment laws.