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Independent Contractors Franchisee Franchisors

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

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

Massachusetts Supreme Judicial Court Clarifies Franchisee vs. Employee Classification

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

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

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

Lathrop GPM

Ninth Circuit Affirms Decision that Franchisees Are Not Employees of Franchisor

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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

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

Lewitt Hackman

Franchisor 101: Preemption Preempted

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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 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

Benesch

Democrat-led NLRB Eyes New Independent Contractor and Joint Employer Tests

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The Democrat-majority National Labor Relations Board readied for 2022 by announcing plans to confront two President Trump-era legal tests - one that determines whether an independent contractor is actually an employee...more

Lewitt Hackman

Franchisor 101: A Convenient Truth

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In 2017, four former franchisees brought a class action in California, claiming 7-Eleven owed them unreimbursed expenses. The ex-franchisees claimed they were employees, not independent contractors of 7-Eleven. The court...more

Locke Lord LLP

Employee or Franchisee? Or Both? September 2021 News Update

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In the same month that 7-Eleven prevailed in a federal court trial where convenience store franchisees claimed they were not independent contractors but rather employees entitled to the protections of state labor laws, a...more

Lewitt Hackman

Franchisor 101: Is Matco the Next Jan-Pro?

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A federal court in California certified a class of Matco Tools franchisees who claimed to be misclassified by Matco as independent contractors rather than employees. They claimed Matco did this to avoid obligations owed to...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: California’s Dynamex/ABC Test is Retroactive

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In 2019, the U.S. Court of Appeals for the Ninth Circuit held that the ABC Test announced in a California Supreme Court decision, Dynamex Operations West, Inc. v. Superior Court, 4 Cal.5th 903 (2018) could apply to franchise...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

Lewitt Hackman

Franchisor 101: The Wrong Tools to Avoid California Courts

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The Ninth Circuit ruled that a California Matco Tool franchisee, John Fleming, could bring a class action wage and hour suit in California, even though a forum selection clause in the distribution agreement specified Ohio...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

Fox Rothschild LLP

Time To Exhale . . . CAUTIOUSLY: Ninth Circuit Has Good News For Franchisors

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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

BCLP

New California Law Disrupts Franchise Relationships

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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

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

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