A Maryland federal district court denied a restaurant franchisor’s motion to dismiss, concluding that a restaurant manager at a franchised location alleged sufficient facts to support a finding that the franchisor is a joint...more
A federal district court in New York dismissed workplace harassment and retaliation claims against corporate affiliates of the Golden Krust Caribbean Bakery & Grill franchisor for damages as a result of workplace harassment...more
6/30/2023
/ Civil Rights Act ,
Dismissals ,
Employer Liability Issues ,
Employment Litigation ,
Franchise Agreements ,
Franchisee ,
Franchisors ,
Harassment ,
Joint Employers ,
Retaliation ,
Title VII
A Michigan federal district court denied a franchisor’s motion to dismiss claims under Title VII of the Civil Rights Act of 1964 and Michigan law, and claims alleging retaliatory termination and sexually hostile work...more
6/30/2023
/ Civil Rights Act ,
Employer Liability Issues ,
Employment Litigation ,
Franchisee ,
Franchisors ,
Hiring & Firing ,
Hostile Environment ,
Joint Employers ,
Motion to Dismiss ,
Retaliation ,
Sexual Harassment ,
Title VII
California Assembly Bill 257, the Fast Food Accountability and Standards Recovery Act (the “FAST Act” enacted in 2022), was to become effective January 1, 2023.
The FAST Act established a 10-member Fast Food Sector...more
4/13/2023
/ California ,
Employees ,
Employer Liability Issues ,
Franchises ,
Hiring & Firing ,
Labor Reform ,
New Legislation ,
Regulatory Requirements ,
Standards & Procedures ,
State Labor Laws ,
Workplace Safety
Franchisors faced unprecedented challenges in 2020. Enactment of California’s Assembly Bill 5 on January 1, 2020 was just the tip of an iceberg. As the COVID-19 pandemic upended franchise systems across all industries,...more
Download PDF Assembly Bill 5 took effect in California on January 1, 2020 and governs when a business can treat a worker as an employee as opposed to an independent contractor. Under AB5 and its “ABC” test, a hiring entity...more
10/28/2020
/ ABC Test ,
Classification ,
Department of Labor (DOL) ,
Employer Liability Issues ,
Fair Labor Standards Act (FLSA) ,
Franchises ,
Franchisors ,
Independent Contractors ,
International Franchise Association (IFA) ,
Misclassification ,
State Labor Laws
California Governor Gavin Newsom signed into law Assembly Bill 5 (“AB-5”). AB-5 codifies into California’s Labor Code the “ABC test” for determining employee or independent contractor status, as adopted by the California...more
11/1/2019
/ ABC Test ,
CA Supreme Court ,
Dynamex ,
Employer Liability Issues ,
Franchisee ,
Franchises ,
Franchisors ,
Gig Economy ,
Governor Newsom ,
Independent Contractors ,
Misclassification ,
New Legislation ,
Retroactive Application ,
State Labor Laws
The Ninth Circuit sent shockwaves through the franchise industry in ruling that last year’s California Supreme Court decision broadening who may bring wage misclassification claims (Dynamex v. Superior Court) applied...more
6/1/2019
/ ABC Test ,
Appeals ,
CA Supreme Court ,
Employer Liability Issues ,
Franchisee ,
Franchises ,
Franchisors ,
Indemnification ,
Independent Contractors ,
Joint Employers ,
Misclassification ,
Remand ,
Retroactive Application ,
Reversal ,
Statute of Limitations ,
Wage and Hour
The joint employer question has been a hot topic in franchise and employment litigation for the last few years. You may remember the Browning-Ferris decision of 2015, in which the National Labor Relations Board (NLRB, or...more
9/27/2018
/ Browning-Ferris Industries of California Inc. ,
Comment Period ,
Employer Liability Issues ,
Franchisee ,
Hiring & Firing ,
Joint Employers ,
NLRA ,
NLRB ,
Proposed Rules ,
Public Comment ,
Rulemaking Process ,
Staffing Agencies ,
Terms and Conditions
In January 2016, the National Labor Relations Board (NLRB) determined that indirect control or the reserved right to control, even if unexercised, could be sufficient grounds to find a joint employer relationship between a...more
In 1981 “Video Killed the Radio Star” was the first music video MTV broadcast in the United States. The song was actually written a couple of years earlier, appeared on an album entitled The Age of Plastic by the Buggles, and...more
A California federal judge dealt a major blow to employees of a Bay Area McDonald's in their effort to hold the franchisor responsible for its franchisee's alleged failure to pay wages and provide meal and rest breaks. The...more
For more than 55 years, the International Franchise Association has been committed to improving methods and business practices for all participants in franchising - whether working with the Federal Trade Commission, lobbying...more
With franchisors deeply concerned about joint liability for franchisee employees, more states are passing laws trying to prevent that from happening. Here are some states and measures that have passed:
Texas enacted...more
The U.S. Department of Labor says McDonald's is liable for actions of franchisees. In the last three months a California federal court said McDonald's could be liable for a franchisee's alleged failure to pay overtime and...more
In Ruiz v. Affinity Logistics Corporation, another recent delivery driver case that arose in California, Affinity Logistics' drivers claimed they were employees and had been misclassified as independent contractors. The trial...more
A West Virginia Court refused to dismiss an action brought under its state workers' compensation law. That law permits an employee to recover greater damages when deliberate intent exists.
An employee of a Hardee's...more
There has been a lot of news lately about risks of franchisors being liable for acts and incidents at franchised locations. The National Labor Relations Board's general counsel recently announced he intends to claim...more
On August 28, 2014, the California Supreme Court reversed a 2012 Court of Appeal decision in Patterson v. Domino's Pizza, LLC. The lower court held that franchise operating systems, like Domino's, deprive franchisees of the...more
FRANCHISOR 101: PROVIDING FINANCIAL PERFORMANCE REPRESENTATIONS TO POTENTIAL FRANCHISEES:
Financial performance representations (FPRs) consist of historical earnings data presented by franchisors to potential...more