Suppose you are a franchisor -- a company that sells franchises of its brand. If one of your franchisees violated federal labor law, would you be legally liable, too? Or suppose you are a staffing agency and your employees' rights are violated by one of your client companies. Is that company liable for the violations? Or are you?
Your legal liability depends on whether you can be considered a joint employer with the other organization. If a franchisor, for example, were to exercise direct control over significant personnel matters at franchisees, that franchisor might be considered a joint employer with the franchisees. That could mean the franchisor would be liable for its franchisee's labor law violations -- at least to the extent that it exercised direct control over the matter.