Bipartisan Joint Employer Bill Offers Protection for Franchises

A bipartisan pair of lawmakers is introducing legislation to largely shield franchises from joint employer liability, a rare alliance between both sides of the aisle on a highly contested legal issue that could impact businesses in many facets of the economy.

“The American Franchise Act,” co-sponsored by Reps. Kevin Hern (R-Okla.) and Don Davis (D-N.C.), would make it harder for fast-food giants like McDonald’s Corp. and Wendy’s Co. to be deemed jointly responsible for minimum wage requirements or collective bargaining obligations of franchisees operating under their name.

The issue also presents high stakes for industries that rely on contractors, like ...