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Before committing to a franchise business, consider...
One of the most important legal developments last month is a new lawsuit filed by registered nurses against a leading health care system alleging that they have been misclassified as independent contractors instead of...more
The Supreme Judicial Court of Massachusetts, answering a certified question, has ruled that five 7-Eleven franchisees were independent contractors, not misclassified “employees,” under the Massachusetts Independent Contractor...more
In the ever-evolving landscape of employment law, a recent Massachusetts Supreme Judicial Court (SJC) opinion, Patel v. 7-Eleven, Inc., has shed light on a critical question: When is a franchisee considered an employee of the...more
The Ninth Circuit Court of Appeals recently affirmed a decision that a group of franchisees are not employees of their franchisor, even though the trial court failed to apply the correct test. Haitayan v. 7-Eleven, Inc., 2022...more
When a company issues franchises, and the workers (in this case janitors) claim they are not independent contractors and sue the franchise company, can that “relationship” be posited as a defense?...more
The Massachusetts Supreme Judicial Court recently issued three decisions with significant implications for employers in the commonwealth, holding that (1) when an employer pays wages to an employee after the deadlines...more
Patel v. 7-Eleven, a case in Massachusetts, has been closely watched since the ABC test took hold of franchise relationships in employee misclassification cases across the country. A putative class of 7-Eleven franchisees...more
Seyfarth Synopsis: On March 24, 2022, the Massachusetts Supreme Judicial Court (“SJC”) issued a much-anticipated decision in Patel, et al. v. 7-Eleven, Inc., et al. answering a certified question from the United States Court...more
The Massachusetts Supreme Judicial Court just held that 7-Eleven franchisees may be employees of 7-Eleven under Massachusetts wage and hour law. The March 24 decision in Dhananjay Patel v. 7-Eleven, Inc. will have significant...more
Does the strict ABC test set forth in the Massachusetts independent contractor law apply to the relationship between a franchisor and its franchisee where the franchisor must also comply with the FTC’s Franchise Rule? That...more
Earlier today, federal judge Dale Fischer in California issued a decision after a lengthy non-jury trial earlier this year, concluding that four 7-Eleven franchisees had been properly classified as independent contractors and...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
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
From a ballot measure in California, to a court decision in Massachusetts, to federal regulations proposed by the Department of Labor, several recent developments could impact whether a franchisor’s independent franchisees...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
BB&K Partner Thomas O'Connell Explores the Independent Contractor Law's Impact on the Franchise Industry in a Southern California Newspaper Group Column - In enacting Assembly Bill 5 earlier this year, the California...more
Seeking to tighten worker misclassification enforcement in New Jersey, on January 20, 2020, Governor Phil Murphy signed into law a package of legislation to add misclassification penalties, allow stop-work orders against...more
The battle over the scope and applicability of the so-called “ABC test” in determining California employers’ potential liability under wage and hour and other state labor laws continues unabated....more
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
On September 24, 2019, the U.S. Court of Appeals for the Ninth Circuit certified to the Supreme Court of California the question of whether that court’s landmark 2018 decision in Dynamex v. Superior Court should be applied...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
“Someday, California is going to disappear into the ocean.” That phrase usually refers to the San Andreas Fault. But for those in the franchise industry, it may now refer to AB-5, a new California law that calls for...more
On September 18, 2020, California Governor Gavin Newsom signed a new measure — Assembly Bill 5 — which will redefine how businesses classify their workers. Commonly known as “AB 5,” the new law seeks to codify the “ABC Test”...more
Winter is coming for franchisors in California. Last year, the California Supreme Court decided to hold California businesses liable for the violation of Massachusetts labor statutes when it adopted the ABC test for...more
On July 22, 2019, the Ninth Circuit withdrew its recent decision applying the landmark employee/independent contractor classification case, Dynamex, retroactively and indicated that it will be certifying the question to the...more