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Independent Contractors Franchisee Employer Liability Issues

Independent contractors are individuals or entities that perform work for other individuals or entities, but are not employees of those individuals or entities. Whether a worker is an employee or an independent... more +
Independent contractors are individuals or entities that perform work for other individuals or entities, but are not employees of those individuals or entities. Whether a worker is an employee or an independent contractor is not always an easy determination. However, due to differences in tax and liability treatment, misclassifying an employee as an independent contractor can have serious consequences. Autonomy is the defining feature of independent contractor arrangements. Independent contractors control the manner and method of how work is performed while payers control the desired result. Control over schedule and number of hours worked, ownership of equipment or tools, permanency of relationship, and acceptance of jobs from multiple entities are all possible factors in determining whether a worker is an employee or independent contractor.   less -
Foley Hoag LLP

Massachusetts Supreme Judicial Court Rules 7-Eleven Franchisees Are Not Employees

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On September 5, 2024, the Massachusetts Supreme Judicial Court (“SJC”) ruled in Patel v. 7-Eleven that 7-Eleven franchisees are not employees of the franchisor under the independent contractor statute. The SJC looked beyond...more

Morgan, Brown & Joy, LLP

Supreme Judicial Court Rules That Typical Franchise Operators Are Independent Contractors, Not Employees

On September 5, 2024, the Massachusetts Supreme Judicial Court (“SJC”) held that 7-Eleven franchisees operating in a “typical” franchisor-franchisee relationship were independent contractors and not “employees” of 7-Eleven,...more

K&L Gates LLP

More Than Just Loopholes: Significant Changes Proposed Under the Federal Government's Third Tranche of Labour Law Reforms

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The Federal Government recently introduced the latest in a series of workplace reforms into Federal Parliament. The Fair Work Legislation Amendment (Closing Loopholes) Bill 2023 (the Bill), proposes further amendments to the...more

Lathrop GPM

Maine Federal Court Grants Franchisor’s Motion to Dismiss Age Discrimination Claim Brought by Franchisee’s Independent Contractor

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A federal court in Maine granted a franchisor’s motion to dismiss claims asserting that a franchisor was liable for its franchisee’s alleged age discrimination in employment. Goodwill v. Anywhere Real Est., 2023 WL 4034372...more

Fisher Phillips

7-Eleven Franchise Owners Not Deemed Employees Under Massachusetts Law

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A federal court recently ruled that 7-Eleven franchise owners are not employees of the franchisor, the latest development in a long-running legal saga challenging their status as independent contractors. However, this...more

Ogletree, Deakins, Nash, Smoak & Stewart,...

Eleventh Circuit Serves a Whopper of a Ruling on Franchisor’s ‘No-Poach’/‘No-Hire’ Agreement With Franchisees

​​​​​​​Over the last several years, business-to-business “no-hire” and “no-poach” agreements have come under legal attack, including through enforcement actions by the Federal Trade Commission and criminal prosecutions by the...more

Fox Rothschild LLP

A Franchisee-Franchisor Relationship Cannot Be A Defense In An Independent Contractor Action

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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

Partridge Snow & Hahn LLP

Massachusetts SJC Holds that Independent Contractor Statute Applies to Franchisees

On March 24, 2022, the Massachusetts Supreme Judicial Court (“SJC”) determined that the Massachusetts independent contractor statute (G. L. c. 149, § 148B) applies within the franchisor-franchisee context and does not...more

Seyfarth Shaw LLP

Patel, et al. v. 7-Eleven, Inc., et al – While the Massachusetts’ Independent Contractor Statute May Apply to Franchise...

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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

Foley Hoag LLP

Massachusetts Supreme Judicial Court Rules that Independent Contractor Test Applies to Franchisees

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On March 24, 2022, the Massachusetts Supreme Judicial Court (SJC) ruled in Patel v. 7-Eleven that the test for independent contractor status set forth in the Massachusetts independent contractor statute applies to the...more

Lathrop GPM

The Franchise Memorandum - Issue # 262

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California Supreme Court Applies Independent Contractor Standard Retroactively; Does Not Reach Applicability to Franchises - The California Supreme Court has held that its Dynamex decision applies retroactively, answering...more

Lewitt Hackman

Franchisor 101: AB 5’s Preemptive Strike

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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

Bradley Arant Boult Cummings LLP

The Relationship Talk: DOL Issues New Rules on Joint Employer Status

When do your business relationships make you a joint employer? Fortunately, the DOL recently published a Notice of Proposed Rulemaking with changes to regulations regarding when two or more entities should be treated as...more

Lewitt Hackman

Franchise 101: California Assembly Bill 5 (2019)

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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

Foley & Lardner LLP

Entrepreneurial Opportunity and Control - Two Sides of the Same Coin?

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The National Labor Relations Board (NLRB) has once again weighed in on the proverbial employee-independent contractor issue, this time by way of its General Counsel. On April 16, 2019, the General Counsel’s office issued an...more

Lewitt Hackman

Franchisor 101: Franchisor Can Be Liable as “Employer” for Missclassifying Workers

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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

Locke Lord LLP

February 2019 Independent Contractor Misclassification and Compliance News Update

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One need only glance at the court cases we report on below to understand why some businesses choose to settle independent contractor misclassification cases.  Three of these cases highlight the unpredictable approaches...more

Cozen O'Connor

The NLRB’s Newest Take on Who Is an Employee under the National Labor Relations Act

Cozen O'Connor on

On January 25, 2019, the National Labor Relations Board (“NLRB”) issued an important decision in SuperShuttle DFW, Inc. and Amalgamated Transit Union Local 1338, 367 NLRB No. 75, Case 16-RC-010963 (Jan. 25, 2019), holding...more

FordHarrison

Supershuttle Transports Independent Contractor Status into the Spotlight

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On January 25, 2019, the National Labor Relations Board (NLRB) affirmed the Acting Regional Director’s determination that franchisees who drive for SuperShuttle are independent contractors, not statutory employees, and...more

Polsinelli

Back to the Future (Again): NLRB Returns to Traditional Independent Contractor Test

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On January 25, 2019, the National Labor Relations Board (“NLRB” or “Board”) in SuperShuttle DFW, Inc. (367 NLRB No. 75), overruled the Obama-era 2014 FedEx Home Delivery (361 NLRB 610) decision and returned to its traditional...more

Fisher Phillips

Labor Board Makes It Easier To Classify Workers As Independent Contractors

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In a significant ruling which will benefit companies, the National Labor Relations Board on January 25th, revised the test it uses for determining whether workers are employees or independent contractors by making it easier...more

Orrick - Employment Law and Litigation

Are Franchisees Employees? California Court Says No

In October 2017, four franchisees filed a federal complaint against the global convenience store chain, 7-Eleven, seeking to represent a purported class of over 1,000 similarly situated 7-Eleven franchisees in California. The...more

Snell & Wilmer

Drafting Franchise Agreements After Patterson v. Domino’s : Avoiding the Minefield of Vicarious Liability and Joint Employment

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Lauded as one of the most important franchise cases in the recent past, Patterson v. Domino’s established a new standard for addressing vicarious liability issues in California. In reaching its decision that Domino’s was not...more

Foley & Lardner LLP

Do You Know Who Your Employees Are?

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Employers are beginning to learn that they may have far more employees than they think. A driver for the ride sharing company Uber was considered an “employee” by the California Labor Commissioner’s Office earlier this month....more

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