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Committee hears LB941 to clarify when franchisors are joint employers
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Summary
LB941 would create a clear state standard saying franchisors are employers only when they exercise direct and immediate control over core employment decisions; franchisees and small-business owners and trade groups urged the committee to pass the bill to reduce litigation risk and regulatory uncertainty.
Senators considered LB941, a bill to clarify Nebraska law on when a franchisor should be treated as an employer for labor-law purposes.
Senator Lauren Lippincott told the committee the bill is intended to give franchisees certainty that they — not an out‑of‑state franchisor — are the employer responsible for hiring, scheduling, payroll and other day‑to‑day employment decisions unless the franchisor exercises direct, immediate control over those specific decisions.
Witnesses from the International Franchise Association, local franchise owners and state business groups testified in favor. Matthew Kagle of the IFA said inconsistent federal joint‑employer standards have created confusion and litigation risk, and that LB941 protects local franchise owners who invest in their communities. Local franchisees described managing hiring, training, payroll and benefits themselves and said brand support from franchisors should not be read as employment control.
Committee members asked for examples of litigation or joint‑employer cases motivating the bill and requested a list of states that have enacted similar franchise‑specific standards; proponents said 21 states have enacted franchise clarity statutes and offered to provide case references for members.
Ending: The committee heard largely proponent testimony and will consider case law examples and model language as it deliberates further.
