The FAST Act is in limbo pending the outcome of a California ballot repeal initiative. Undaunted, the Legislature has excised key provisions of that Act and positioned them for separate enactment as AB 1228, introduced by...more
This fall we posted about the North American Securities Administrators’ (NASAA) adoption of a Statement of Policy Regarding the Use of Franchise Questionnaires and Acknowledgments (the “SOP”). Technically, NASAA’s SOP...more
And so we come to the ultimate affront to franchising. Responding to strong lobbying efforts by the Service Employees International Union (SIEU), the California legislature passed the Fast Food Accountability and Standards...more
Signed into law on September 18, 2019 by Governor Gavin Newsom, Assembly Bill 5 (commonly known as AB-5), took effect on January 1, 2020. AB-5 codified the California Supreme Court’s June 2018 decision in Dynamex Operations...more
“California’s falling into the ocean!” Growing up in Southern California I heard that every time we had an earthquake. Usually, though, all I had to do was stand in a door jamb and wait until the shaking stopped (now not the...more
Eleventh Circuit’s Burger King opinion raises antitrust risks in franchising-
Sherman Act challenges to “no-poach” clauses in franchise agreements have been languishing in federal courts for a few years now, but with...more
Recently we discussed the headwinds that remain for the franchise community as a result of policy changes coming from Washington and the various state capitols. What should franchisors consider as they swim in this sea of...more
In recent blogs, we identified serious threats to the franchise industry – the Protect the Right to Organize (“PRO”) Act, joint employer standards, state ABC laws, and the new Biden Administration guard at the Department of...more
While the Protect the Right to Organize (PRO) Act was passed by the House of Representatives, it has not been made part of the Biden administration’s infrastructure efforts thus far and does not appear have sufficient support...more
The California version of the ABC test is arguably the most hostile to franchising. Nonetheless, the risk is not confined to California.
This is because the ABC employee classification test, with variations, has been...more
The second troublesome threat is the joint employment standard. The Obama Adminstration DOL caused angst in the franchise industry in January 2016, when it adopted a joint employment standard that focused on “whether the...more
Omens of the Apocalypse for the franchise industry are everywhere:
•The pending Protect the Right to Organize (PRO) Act;
•The return of David Weill, author of Fissured Employment and chief architect of the Obama era...more
It was predictable – even inevitable – that the Biden administration would reverse much of Trump’s labor oeuvre. But no one could have predicted how quickly! In a little more than a month, the administration has:...more
2/26/2021
/ ABC Test ,
Biden Administration ,
Business Ownership ,
Contract Terms ,
Coronavirus/COVID-19 ,
Department of Labor (DOL) ,
Federal Labor Laws ,
Federal Trade Commission (FTC) ,
Franchisee ,
Franchises ,
Joint Employers ,
Managers ,
NLRB ,
NLRB General Counsel ,
Safe Harbors ,
Trump Administration ,
Unions ,
Wage and Hour
The one-two punch of state and federal employment standards activity poses an existential threat to franchising; many commentators, including this one, have acknowledged that fact. But why? Did the California legislature or...more
Change is coming, but will it be a welcome change or a harbinger of woe?
Over the last 8 years or so, the ever-changing landscape of employment laws has arguably posed an existential threat to franchising. The franchise...more
12/9/2020
/ ABC Test ,
Biden Administration ,
Department of Labor (DOL) ,
Fair Labor Standards Act (FLSA) ,
Franchises ,
Franchisors ,
Joint Employers ,
Justice Scalia ,
Misclassification ,
NLRB ,
Safe Harbors ,
State Attorneys General ,
Trump Administration ,
Wage and Hour
As if COVID, wildfires, and heat weren’t enough, California franchisors and franchisees suffered another gut punch when the legislature rejected a proposed franchise exemption to AB-5.
When AB-5 was enacted in 2019, to the...more
My vote is YES! In fact, I think they are essential! I thus respectfully disagree with my partner and colleague John Gotaskie.
John appropriately focuses on three stakeholders in discussing immunity legislation: business...more
Surprise! On April 8th, FASB delayed for one year the implementation of the new ASC 606 revenue recognition standards for private companies, citing the coronavirus pandemic. In addition to delaying implementation, FASB...more
Let’s face it—COVID-19 has decimated the franchise industry, along with the rest of the economy. The food service, hospitality, travel and the service sectors had very tough decisions to make almost instantly, with very...more
In my recent post commenting on the Department of Labor’s joint employer rule, I wondered whether the NLRB would follow suit. Now we know, and the answer’s positive. It’s very good news for franchising!
As we noted in a...more
In 2014, David Weil assumed the reins at the Department of Labor’s Wage and Hour division. Dr. Weil, an economic scholar, set his sights on the concept of joint employment. In academia, his work focused on what he termed a...more
It’s the holiday season, but franchise lawyers may find little in recent events to celebrate. The challenges just keep on coming!
Most recently, we’ve been challenged by California’s AB5 legislation and Dynamex decision,...more
I admit I was among the scores of franchise lawyers whose blood pressure skyrocketed with passage of California’s AB 5. If a Franchise Agreement establishes an independent contractor relationship between franchisor and...more
As noted in our first post on this topic, California’s AB-5 codified the employment test set forth in Dynamex Operations West v. Superior Court of Los Angeles, 4 Cal. 5th 903 (2018). Although the full implications of this new...more
“Some day, California’s going to fall into the ocean” usually refers to the San Andreas fault. Now it may refer to AB-5, and the future of the franchise industry in California.
The California legislature has now passed...more