The Franchise Memorandum - Issue 251

Lathrop GPM

Court Dismisses Ostensible Agency Claim on Motion for Reconsideration -

A federal court in California has granted a motion for reconsideration in light of recent Ninth Circuit precedent, reversing the district court’s prior decision and dismissing ostensible agency claims alleged against a franchisor. Cruz v. MM869, Inc., 2020 WL 509109 (E.D. Cal. Jan. 31, 2020). Cruz, an employee of the Merry Maids franchisee and representative of a class action group, alleged that the franchisor Merry Maids and its parent organization ServiceMaster were joint employers and were liable for the franchisee’s alleged violation of various wage and hour laws under California’s Labor Code. The court previously dismissed Cruz’s joint employer claims against ServiceMaster/Merry Maids, but left intact her claims under an ostensible agency theory of liability.

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