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Print articleSenate Bill 652 Enacted by Texas Legislature to Ease Recent Concern Over Franchise Liability for Employment Claims
July, 2015 - Robert A. Lauer, Deborah S. Coldwell, Suzanne Trigg, Jamee Cotton
Heightened concerns over recent National Labor Relations Board (“NLRB”) complaints authorized against McDonald’s, USA, LLC—which threaten to undermine the common understanding of a franchisor-franchisee relationship and expand the definition of “employer”— caught the eye of Texas legislators during the recently concluded 84th Regular Texas Legislative Session.
In response to the wide-reaching implications accompanying a determination that would classify franchisors as joint employers with its franchisees, Senator Schwertner filed SB652. SB652 passed prior to Sine Die, was signed by Governor Abbott on June19,2015, and will become effective on September1,2015. SB652 clarifies state law regarding franchisor-franchisee relationships “[i]n an effort to ensure that franchisors in Texas are not held unfairly liable for the actions of franchisees, to prevent frivolous lawsuits and to encourage franchisees to act responsibly.” H. Comm. Rep., Bill Analysis, Tex. S.B. 652, 84th Leg., R.S. (2015).
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