Franchise Civil Procedure

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A Fresh Take on the Horizontal Joint Employment Theory: Conditional Certification for Subway Employees Denied

Seyfarth Synopsis: Federal court denies motion for conditional certification for a proposed class of employees working at separate Subway franchises. Earlier this year, the DOL’s Wage-Hour Division issued a...more

Court Grants Default Judgment Confirming Arbitration Award, With A Lesson On Jurisdiction

Choice Hotels filed an application to confirm an arbitration award of over $247,000 for the alleged breach of a franchise agreement by two defendants, which failed to timely commence construction of a hotel. The defendants...more

THANKSGIVING EDITION [FROM THE ARCHIVES]: Court Protects Quizno’s Franchise Turkey Trade Secrets

This Thanksgiving, Trade Secrets Watch is serving a delicious tale about protecting trade secrets in a franchising relationship. In 1994, Quizno’s entered into a franchise agreement with Robert Kampendahl, an...more

FRANCHISEE 101: Is It a Franchise? Yes and No

A federal court in Indiana made an interesting decision on whether a business relationship was a franchise. Wabash National Corp. is a famous maker of semitrailers. Wabash notified a dealer in Texas that its dealership was...more

Third Circuit affirms class certification in franchisee-as-employee class action

In a recent sharply divided 2-1 decision, the Third Circuit Court of Appeals affirmed the grant of class certification against commercial cleaning franchisor Jani-King in a lawsuit alleging that Jani-King’s franchisees were...more

Five Critical Wage and Hour Issues Impacting Employers

It is no secret that the wage and hour requirements found in the myriad of federal, state, and local laws and regulations present unique challenges to employers across the country. Those challenges are further complicated by...more

September 2016 Independent Contractor Misclassification and Compliance News Update

The past month’s judicial and administrative activity in the area of IC misclassification reflects the wide range of industries facing these types of claims: communications; cleaning services; transportation and delivery...more

Lessons Unlearned: Franchise and Independent Contractor Agreements Can Be Kiss of Death

The Third Circuit’s decision is a pointed reminder to franchisors, as well as businesses that use independent contractors, that the form of their agreements can either serve their legal interests or harm them in employee...more

EEOC Supports NLRB’s Joint-Employer Standard before DC Circ.

On September 14, 2016 the Equal Employment Opportunity Commission (“EEOC”) filed an amicus brief in the D.C. Circuit expressing support for the National Labor Relations Board’s (“NLRB”) loosened standard of a joint employer....more

Motel 6 Sued By EEOC for Pregnancy Discrimination

New Orleans Motel Placed Employee on Unwanted Leave of Absence, Federal Agency Charges - NEW ORLEANS - G6 Hospitality, dba Motel 6, unlawfully placed a pregnant employee on leave solely because of the fact that she was...more

FRANCHISEE 101: How Far Do Earnings Projections Go?

A franchisor is allowed to make "financial performance representations" in its disclosure documents. These figures may project how much money a franchisee is likely to make and can play a critical part in the franchisor's...more

Dunkin’ Donuts Franchise to Pay $150,000 to Settle Sexual Harassment Lawsuit

Doughnut Franchise Manager Sexually Harassed Young Female Employees, Some in Their Teens, and Retaliated Against Worker Who Resisted Advances, Federal Agency Charged - NEW YORK - Hillcrest Marshall, Inc., which owns...more

Federal court certifies class of franchisee’s employees to pursue ostensible agency claims against franchisor: three takeaways

In Ochoa, et al. v. McDonald’s Corp. et al.,[1] the United States District Court for the Northern District of California recently certified a class of more than 800 current and former employees of a McDonald’s franchisee in...more

Franchisor to Be Considered Statutory Employer? PA Supreme Court to Decide

The far-reaching implications of this decision could change the existing franchise business model. Is a franchisor a statutory employer of its franchisee’s employees? The Workers’ Compensation Appeals Board thinks so,...more

Government Involvement in Noncompetes… Against a Sandwich Maker?! Jimmy John’s Slapped With Another Lawsuit, This Time Brought by...

Jimmy John’s can’t seem to escape the limelight. Last year, the company made headlines when employees hit it with a putative class action lawsuit seeking to invalidate their non-compete agreements. The District Court...more

District Court: CFPB May Hold Law Firm Owners Individually Liable for Alleged Violations

The U.S. District Court for the Western District of Wisconsin ruled on July 20, 2016, that the Consumer Financial Protection Bureau (CFPB) may hold the owners of two law firms offering debt relief services liable for alleged...more

Res Judicata: California Mandamus Claims Are Not Fundamentally Distinct From Federal Counterparts Under California’s Primary...

The age-old doctrine of res judicata is as strong as ever in California. In Franceschi v. Franchise Tax Board, et al. (B267719, filed July 8, 2016) the California Court of Appeal Second District, held that Ernest Franceschi’s...more

Sixth Circuit Tri County Decision Provides Much-Needed Clarity on “Successor” Provision in Ohio Franchise Law

I attach a copy of the US Court of Appeals for the Sixth Circuit’s recent decision in Tri County Wholesale Distributors v. Labatt USA Operating Company, Nos. 15-3710/3769 (6th Cir., July 6, 2016). For students of the...more

Excess Policies at Issue Deemed Not to Attach Absent Actual Payment of the Amount of Underlying Limits by Either the Insured or...

Policyholders contemplating insurance coverage settlements with low-level insurers should use caution to preserve their ability to access higher-level excess policies. Excess insurers are increasingly disputing that...more

The limits of negligent misstatement

The house always wins - except, it seems, at the Court of Appeal. The appellant bank did not owe a duty of care to Playboy Club's casino for a negligent misstatement as to a gambler's creditworthiness made to a sister...more

Chorley Enterprises, Inc. v. Dickey’s Barbecue Restaurants, Inc.: Arbitration Provisions in Maryland Franchise Agreements

Maryland law requires franchisors include a provision in their franchise agreements that preserves the franchisee’s ability to litigate certain claims in court rather than in arbitration. In Chorley Enterprises, Inc. v....more

New Tool to Protect Franchisors’ Trade Secrets

On May 11, 2016, President Obama signed into law the Defending Trade Secrets Act of 2016 (the Act). The Act amends the Economic Espionage Act of 1996 (EEA) to create a federal private right of action for the misappropriation...more

FRANCHISOR 101: Wins, Losses & Lessons in Joint Employer Liability

As joint employer liability continues to develop, plaintiffs seeking deep pockets continue to claim, with some success, that franchisors are joint employers, responsible for actions of their franchisees' employees. In April,...more

Sign O’ The Times: SCOTUS Denies Cert In Franchise Arbitration Dispute

On Monday of this week, after stringing the parties along for five months, SCOTUS denied cert in a case involving the intersection between arbitration and franchise regulation. The petition was filed in November of 2015,...more

Ninth Circuit: Arbitration Provision Contained In Sham Agreement Is Not Enforceable

The Ninth Circuit reversed a district court ruling that had compelled arbitration, holding that a party may not enforce an arbitration agreement where the clause is contained in a nonbinding contract. The parties had entered...more

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