Texas House Bill HB1686

Texas 2015 - 84th Regular

Caption

Relating to excluding a franchisor as an employer of a franchisee or a franchisee's employees.

Impact

The enactment of HB1686 has significant implications for the liability of franchisors across Texas. By excluding franchisors from direct employer status, the law could potentially limit franchisee employees' ability to seek legal recourse against franchisors in workplace disputes. This legislative change is intended to streamline how franchisors manage their business operations and mitigate risks associated with employee claims that might arise from franchisee employment situations. However, it also raises concerns about the protections available to employees at franchise locations, particularly in cases of unfair labor practices or workplace treatments.

Summary

House Bill 1686 addresses the relationship between franchisors and franchisees, specifically aiming to exclude franchisors from being classified as employers of their franchisees or the employees of those franchisees. This legislative measure modifies several sections of the Texas Labor Code to clearly define that a franchisor does not carry the same employment responsibilities toward franchisee employees unless a court establishes otherwise based on specific control exercised by the franchisor that goes beyond typical trademark protection. The bill was introduced to clarify existing employment relationships, thereby reducing potential litigation in cases involving employee rights and franchisor liability.

Sentiment

The sentiment surrounding HB1686 appears to be mixed, drawing support from business advocates who argue that it will protect franchisors from undue liability and promote a more favorable business climate. Conversely, labor advocates and certain legislators expressed concerns that the bill undermines employee protections by limiting avenues for employees to hold franchisors accountable. This divergence of opinions underscores a broader debate about balancing the interests of businesses with the rights of workers within franchise operations.

Contention

A notable point of contention lies in the language of the bill that defines the conditions under which a franchisor may still be held liable as an employer. The ambiguity surrounding the standards of 'control' has led to discussions about whether the provisions adequately protect franchisee employees or merely shield franchisors from accountability. As the bill shifts liability based on court interpretations, questions remain about the adequacy of existing labor protections and the proper delineation of roles and responsibilities in franchise agreements.