I don't know how I ever missed it but I was shocked to find that I could not restrict users from branching and merging in TFS Version Control.  Ahhhhhh!!!!

The only security privileges (for Version Control) that are available are:

• Read
• Check out (branching, merging, and other similar pending changes fall into this category)
• Check in
• Label
• Lock
• Revise other users' changes
• Unlock other users' changes
• Administer labels
• Manipulate security settings
• Check in other users' changes

If you want more information about the specifics for Version Control privileges, check out MSDN at:  http://msdn2.microsoft.com/en-us/library/ms252587(VS.80).aspx

If you are facing this same issue and believe that it should be a feature in the product, help out by voting on the feature suggestion on Visual Studio Connect:  https://connect.microsoft.com/VisualStudio/feedback/ViewFeedback.aspx?FeedbackID=307874

Ed B.