Impact of Subway’s “Voluntary Agreement” with the US DOL on Joint Employment

Doctor’s Associates, Inc., which is the owner and franchisor for the Subway sandwich restaurant chain entered into a Voluntary Agreement with the US Department of Labor (DOL) Wage and Hour Division “as part of Subway’s broader efforts to make its franchised restaurants and overall business operations socially responsible” and as part of Subway’s “effort to promote and achieve compliance with labor standards to protect and enhance the welfare” of Subway’s own workforce and that of its franchisees.

While the Agreement appears intended to help reduce the number of wage and hour law claims arising at both Subway’s company owned stores and those operated by its franchisees across the country, the Agreement appears to add further support to efforts by unions, plaintiffs’ lawyers, and other federal and state agencies such as the NLRB, OSHA, and the EEOC to treat franchisors as joint employers with their franchisees.

The Agreement, which among other things commits Subway to working with both the DOL and Subway’s franchisees to develop and disseminate wage and hour compliance assistance materials and to work directly with the DOL to “explore ways to use technology to support franchisee compliance, such as building alerts into a payroll and scheduling platform that Subway offers as a service to its franchisees.”

Employers advised to review the full range of their operations and personnel decisions, including their use of contingent personnel supplied by temporary and other staffing agencies to assess their vulnerability to such action and to determine what steps they may take to better position themselves for the challenges that are likely coming.

Employers should also carefully evaluate their relationships with suppliers, licensees, and others they do business with to ensure that their relationships, and the agreements, both written and verbal, governing those relationships do not create additional and avoidable risks.

Matt Austin is a lawyer based in the Columbus, Ohio office of Roetzel & Andress, LPA who limits his practice to representing employers dealing with labor, employment, and OSHA matters. You can call Matt at (614) 723-2010 or email him at maustin@ralaw.com.

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