Category: franchise

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Franchise FUD: Browning-Ferris Industries, the NLRB, and Joint-Employer Status

Franchise FUD: Browning-Ferris Industries, the NLRB, and Joint-Employer Status

iconicAn August decision by the NLRB is likely to have a broad impact in the coming years, forcing a great deal of change in how many businesses do business.  While the issue may be under the radar for some business owners, those in the franchise industry are paying very close attention – which makes sense because the ruling could easily be construed as the beginning of the end for the franchise business model.  At stake are the definition of “employer” and the determination of who is really responsible for the workers.

The issue stems from a 3-2 decision by the NLRB on a case involving Browning-Ferris Industries of California.  Browning-Ferris Industries is a waste management company that contracted with another company – Leadpoint – to supply employees to perform a variety of work functions.  Under the NLRB ruling, it was determined that Browning-Ferris was a joint employer with Leadpoint.  What is interesting in this case (and where the FUD – fear, uncertainty and doubt – come in) is that “indirect control” of the employees became the primary factor determining whether a joint employer relationship existed under the National Labor Relations Act. Going against years of precedent, the board ruled that Browning-Ferris and Leadpoint were jointly employing the workers.

In the decision, the Board applies long-established principles to find that two or more entities are joint employers of a single workforce if (1) they are both employers within the meaning of the common law;  and (2) they share or codetermine those matters governing the essential terms and conditions of employment. In evaluating whether an employer possesses sufficient control over employees to qualify as a joint employer, the Board will – among other factors — consider whether an employer has exercised control over terms and conditions of employment indirectly through an intermediary, or whether it has reserved the authority to do so.

https://www.nlrb.gov/news-outreach/news-story/board-issues-decision-browning-ferris-industries

There are many who believe Browning-Ferris is a precursor to the pending proceeding against McDonald’s Corp. in which the NLRB general counsel charges McDonald’s Corp as a joint employer of its franchisees’ employees.  Possibly in response to outcries of wage inequality and fast-food worker strikes to force an increase in the minimum wage, the NLRB seems to be adjusting its definitions in favor of the movement and may inadvertently destroy the foundations of the franchise business model according to some.

Clearly the franchise business model is in the crosshairs.  In an article published on Law360 by David J. Kaufmann, Breton H. Permesly and Dale A. Cohen, the authors cite from the June amicus brief on the Browning-Ferris proceeding, in which NLRB General Counsel Richard F. Griffin Jr “directly addressed and attacked franchising, claiming that it was merely an “outsourcing arrangement” and insisting that franchisors are the joint employers of their franchisees’ employees because franchisors can exert significant control over the day-to-day operations of their franchisees”. No ambiguity there.

There have always been questions when workers are classified as contractors, forcing regulatory agencies to delve into the details of the relationship to determine whether or not independence actually exists.  But this decision changes things in a big way.  From Unions gaining more strength in forcing contracting organizations to participate in bargaining processes, to franchise businesses electing to run only company-owned locations to minimize exposure and risk, there is likely to be some troubling times for businesses large and small in the coming months and years as the new definitions take hold.

jmbunnyfeetMake Sense?

J

here’s a shortlink to this article http://wp.me/p2hGOJ-Om

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The Cloud Makes Time Travel Possible: Hosted applications can deliver immediate business benefits

The Cloud Makes Time Travel Possible: Hosted applications can deliver immediate business benefits

In an article published on CIO.com, author Kevin Fogarty describes how moving to a cloud IT approach proved to be a highly beneficial and strategic decision for an on-site diesel fuel distributor.  The focus of the article was on how existing software and processes were enabled by centralizing them in a cloud hosting environment, and not by replacing them with new subscription-based applications.

For many businesses, this is the secret that nobody’s talking about: you can have the benefits of “the cloud” without having to radically change everything you have and everything you do.  Retention of knowledge assets is critical to business continuity, and moving existing systems and process to platforms where they can be leveraged to greater business advantage is a way to do that.  With centralization of systems and services, information can be processed far more efficiently than before, eliminating delays and improving cash flows dramatically.  Time is money, and the cloud helps businesses spend less of both.

“A lot of the invoices have to go out every day by certain times, so third-party accounting companies can do their thing for the fleet owners.” The setup sounds like a classic for any overhyped business-process-automation system, but Daniel Abrams and other Diesel Direct managers weren’t interested in managing their business using sophisticated business systems that require more motivation, money and technical staff than Abrams was willing to use or pay for.”

The initial benefit is being able to use the products already in place, just from a more secure and redundant location, but when you begin to consider the positive ramifications of reducing the time between delivery and invoicing, billing and payment receipt, or customer demand and product supply, you rapidly realize that the cloud means much more to the business than just another way to run software.

“Those changes save Diesel Direct both money and time. Rather than running reports and invoices all night Tuesdays, for example, the additional capacity lets the company run those resource-intensive processes during the day rather than overnight. That gets critical work done faster and more accurately than a process left to complete itself unattended.”

In short, the cloud makes time travel possible, because the result is available almost immediately upon completion of the task.  It’s kind of like getting your expense check as you walk off the plane in your home town, because you reported all your expenses in real time as they were incurred (snap a picture of the receipt at the bar, and like that).

Yet most business owners and IT managers for small and mid-sized businesses are being told that the cloud is best applied when innovation is required, and should be reserved for NEW things, and not thought of as a way to improve the status quo with existing or legacy architecture.

“It’s not unusual for mid-sized companies to come to depend on cloud services, according to James Staten, vice president and principal analyst for Forrester’s Infrastructure and Operations practice.

It is unusual for them to be more concerned with infrastructure than with applications, he says.”

With affordable and secure application hosting services being widely available for small and medium businesses, owners and managers no longer have to look to new solutions just to enable mobility, remote access, and a fundamentally stronger and better-managed system.  Legacy applications can be hosted and delivered, extending their useful life as well as the value of the development and intellectual property, and giving customers capabilities not readily available with local implementations.

“Diesel Direct can’t accomplish anything if its minimal IT infrastructure is offline for any length of time.

Abrams, worried about storms taking out his business as well as the power, didn’t know what technical solution he wanted until Callow “described for him what an enterprise infrastructure looked like,” Callow says.

“They didn’t need one, didn’t want one, but they did want the security, the reliability of a redundant IT infrastructure,” he says. “The most effective way to get that at the lowest possible cost is the cloud.”

Among the greatest benefits of outsourcing application delivery to a cloud hosting provider are the increased monitoring and security, application of best practices, and high levels of system fault tolerance and recovery capabilities offered.  While business subscribers focus on features and functionality of the application, the real focus for hosting providers is the platform – and the management and security of it.  This behind the scenes work offers tremendous business benefit to subscribing customers, but is often not the focus when discussing overall benefits of a cloud computing approach in the context of Software-as-a-Service, which is where many smbs focus their investigations.  As an alternative, businesses who may seek to adopt hosted solutions for their existing applications and software frequently do so for reasons of security and redundancy, not recognizing that their business processes may likely experience significant improvement, as well.

“Enterprises might have the luxury of making strategic decisions about cloud or other technology,” Golden says. “In mid-sized companies things are very tactical. No cloud evangelist is going around the refueling industry saying ‘there are ways to solve this problem.’ “Companies make tactical decisions to solve their own problems and, five or 10 years later, we’ll all wake up and realize we’ve changed the way we do everything,” Golden says.”

Make Sense?

J

The company in the article could be just like yours.  You don’t have to adopt new software and systems to benefit from the cloud.  How could your business change, if you could remove the problems of time and distance?