Franchise Updates

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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

Impact of new French labor law on franchise network

After much toing and froing, the new French labor law (sometimes also referred to as " The El Khomri Law " was finally passed by Parliament on the 8th of August 2016 . Among the articles of this Law, one of the goals of...more

Assignments and restrictive covenants in Ontario: franchisors take note

Franchisors concerned about how they may wish to handle an assignment of a franchise can look to two 2015 decisions of the Ontario Court of Appeal for guidance. In the first decision, 2147191 Ontario Inc. v. Springdale Pizza...more

Après maintes péripéties, la nouvelle loi travail française (parfois aussi dénommée “Loi El Khomri”) a finalement été promulguée...

Après maintes péripéties, la nouvelle loi travail française (parfois aussi dénommée “Loi El Khomri”) a finalement été promulguée par le parlement le 8 aout 2016. Parmi les 123 articles de cette loi, dont l’un des buts...more

Special Edition: President of International Franchise Association (IFA) Visits Lewitt Hackman

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

FINRA to Conduct Targeted Exams of Unit Investment Trust Rollovers

FINRA recently announced that it will be conducting an inquiry into unit investment trust (“UIT”) rollovers. UITs generally are unmanaged registered investment companies that are comprised of a fixed portfolio of securities...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

Privacy & Cybersecurity Update: New York State Proposes Cybersecurity Regulation for Financial Institutions

New York state has proposed a new regulation — to go into effect January 1, 2017 — that would require banks, insurance companies and other financial services institutions regulated by the New York State Department of...more

FCPA Compliance and Ethics Report-Episode 276-Regulator Evolution

In this episode Red Flag Group CEO Scott Lane and I discuss how regulators thinking on best practices compliance programs has evolved. ...more

The NLRB, Franchisees, And Temporary Employees

The retail industry, due to the seasonal nature of its business, has often bolstered its workforces with temporary employees through employment agencies. This arrangement works as an efficient way for employers to manage the typical ups and downs of business both in stores and distribution centers. Several recent decisions from the National Labor Relations Board (NLRB), however, have cast uncertainty over the practice of retaining temporary workers, especially when it involves franchise operations.more

Franchisee d/b/a Franchisor’s Trademark: The Fictitious Name Registration

The fictitious name, also known as the d/b/a, doing business as, trade name or assumed name. Every franchisee uses one and, in almost all cases, it’s the franchisor’s trademark. And while it may be considered “fictitious,” the value of the name is very real to the franchisor. So, when a franchisee says, “I need to register my d/b/a,” should the franchisor be concerned? Not with a proper understanding of fictitious name registration and a properly drafted franchise agreement.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 pregnant, the U.S. Equal Employment Opportunity Commission (EEOC) charged in a lawsuit it filed today.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 sales process. But if the numbers are way off, what kind of legal recovery can the franchisee get?more

Franchising: Is it For You?

As a business owner, you are constantly looking to expand your operations. One option is franchising. It sure works for Dairy Queen and UPS, so why not for you? Like all business models, however, franchising has its cons. Before you give it the green light, it is important to understand how franchising would work in the context of your business. For instance, is your business model easily duplicable? Can your processes be scaled across markets? Are you able to train new franchisees on your model?more

FRANCHISOR 101: Non-Competes for Franchisees’ Employees

A "non-compete" provision limits the franchisee's ability, after the franchise agreement ends, to continue to work in a similar type of business to the franchise within a certain time period and geographic area. The purpose is to protect the franchise system for a time against a competitor who "knows the system from the inside." Non-compete provisions are often disfavored by courts. What about non-compete agreements for the employees of franchisees?more

Suspending Franchise Sales

In several states that require franchise registration, it is a good idea to suspend franchise sales while an amendment or renewal application is pending with the state.  Franchisors commonly suspend franchise sales pending registration.  But California and New York each offers a unique and very different approach to a simple blackout or suspension of sales.more

What To Make Of The Wage And Hour Division's Voluntary Compliance Agreement With The Subway Franchise System

On July 26, the U.S. Department of Labor’s Wage and Hour Division entered into a “Voluntary Agreement” with the franchisor of the Subway brand, known as Doctor’s Associates, Inc., and its affiliates. The agreement reads like a mutual back-scratching, though not surprisingly, the WHD retained the sharper nails in the drafting. The agreement itself is certainly comprehensible and praiseworthy, and it makes sure to compliment Subway, but what does it truly do? more

Ten Hallmarks of an Effective Compliance Program-Hallmark 7

In this podcast, I discuss the most vexing problem of a best practices compliance program, managing third party risk. more

Franchise Relationships, Personal Information and Trade Secret Liability

Corporate entities that share confidential personal information with each other, including those in franchise relationships, should strongly consider potential privacy and trade secret risks and consider available alternative measures before taking any action that could compromise data security.more

Ten Hallmarks of an Effective Compliance Program-Hallmark 4, risk assessments

In this 10-episode podcast series I take a look at the hallmarks of an effective compliance program. In this episode I review Hallmark 4-risk assessments.more

NY Attorney General Schneiderman Declares “War” on Non-Compete Agreements That He Perceives as Overbroad

In an initiative that is virtually without precedent in New York, in the past two months (June 15, June 22 and August 4) Attorney General Schneiderman announced agreements with three separate companies in three different industries under which they each agreed to stop utilizing non-compete agreements that applied to a broad range of their employees.more

Subway Adopts Novel Approach to Stem Wage and Hour Claims

Subway is one of the largest franchisors in the world, with over 26,000 restaurants in the United States alone. It is also in one of the industries most prone to wage and hour claims, a fact reflected in both Department of Labor (DOL) investigations and litigation involving individual outlets. And, predictably, some claimants pursuing wage and hour litigation against a franchisee have also tried to bring the corporate franchisor in as well. The potential threat against the company has increased with aggressive efforts by the National Labor Relations Board and other enforcement agencies to broaden concepts such as joint employer relationships.more

Brexit's Impact on ISDA Documentation

As previously noted in the client alert “Brexit: A First Look at the Impact on Asset Managers That Trade Derivatives,” Brexit is not anticipated to have an immediate impact on ISDA Documentation or derivatives contracts. Until further details of the post-Brexit regime have unfolded, it will also be difficult to determine the future impact of Brexit on the 1992 and 2002 ISDA Master Agreements. This alert summarizes some of the key issues that counterparties to ISDAs will need to consider with respect to agreements that are already in place and those that are currently being negotiated.more

Employment Law This Week®: Salary History, Wage and Hour Compliance Training, Non-Competes, Misclassified Workers

We invite you to view Employment Law This Week® - a weekly rundown of the latest news in the field, brought to you by Epstein Becker Green. We look at the latest trends, important court decisions, and new developments that could impact your work. Join us every Monday for a new five-minute episode! Read the firm's press release here and subscribe for updates. This week’s stories include ... (1) Massachusetts Bans Salary History Question Our top story: Beginning in 2018, pay history will be off limits for Massachusetts job applications and interviews. In a unique attempt to close the gender wage gap, the state has passed a pay equity law that will bar employers from asking applicants about their previous salaries. Employers will also be prohibited from seeking that information from an applicant’s prior employers. While this provision is the first of its kind in the country, the new law also contains more common equal pay protections, broadens the definition of “equal work,” and prevents employers from banning the discussion of salary among employees. Mickey Neuhauser, from Epstein Becker Green, has more. “The hope is that by taking the salary history question off the table, employers will rely only on relevant factors and won't even unconsciously rely upon an irrelevant factor, such as the employee’s prior salary. . . . The law does not prohibit applicants from disclosing their current salaries or salary history, and it doesn't prevent applicants and employers from negotiating over salary. However, the law does not protect employers from paying a salary lower than what would otherwise be permitted under the act simply because an individual has agreed to accept that salary. In other words, an employee cannot agree to be illegally underpaid.” (2) Subway Partners with the DOL The U.S. Department of Labor (DOL) and Subway teamed up to break new ground. The world’s largest fast-food franchisor has reached a voluntary agreement with the DOL to provide wage and hour compliance training to franchisees. The agency conducted more 800 investigations into underpayment of workers at Subway franchises in recent years. This partnership will focus on helping the franchises comply with federal wage and hour laws moving forward. While the DOL hopes to enter into more agreements like this one, franchisors are hesitant, noting that the deal could make them joint employers under the National Labor Relations Board’s standard. (3) New York Attorney General Cracks Down on Non-Competes New York’s crackdown on non-compete agreements continues. An investigation by New York Attorney General Eric Schneiderman revealed that Examination Management Services Inc. required all of its workers, even those who had no access to trade secrets or sensitive information, to sign non-compete agreements. Non-compete agreements in the state are usually permissible only for employees with a high level of access to trade secrets or sensitive information. Under the agreement, the company will stop using the non-competes for most employees in New York. (4) Citigroup Unit Pays Misclassified Workers After DOL Probe A Citigroup affiliate shells out a hefty sum for misclassifying workers. A subsidiary of Citigroup in Florida recently paid almost $2 million to workers whom it had misclassified as exempt from overtime pay. An investigation by the DOL’s Wage and Hour Division found that the company mistakenly applied the Fair Labor Standards Act’s exemption to a group of 882 employees. This case serves as a reminder that salaried workers are not necessarily exempt from overtime. (5) Tip of the Week Lisa Glass, Chief Human Resources Officer for The Child Center of NY, is here with advice on how to create an effective onboarding program. “An important way organizations can help combat employee turnover and help employees adjust to the new organization is through an effective onboarding program. An onboarding program allows employees to understand the expectations of their role in terms of performance as well as social expectations. . . . Effective onboarding is key in creating employee expectations and sharing organization values. The goals must align with the goals of the organization, and the program initiative must be driven by senior management, and not solely driven by human resources.” Visit EmploymentLawThisWeek.commore

Subway, DOL Partner to Improve FLSA Compliance

Last week, the Subway restaurant chain entered into a landmark partnership with the U.S. Department of Labor (DOL) aimed at improving Fair Labor Standards Act (FLSA) compliance among the chain's 27,000 franchisees. The DOL issued a statement that the deal neither "increases or decreases the likelihood that Subway could be held as a joint employer in a [DOL] investigation into FLSA violations by a franchisee," and the agreement itself is silent on this point. more

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