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Franchise Agreements Employer Liability Issues

Lewitt Hackman

Franchisor 101: Joint Employer? Check √

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A Maryland federal district court denied a restaurant franchisor’s motion to dismiss, concluding that a restaurant manager at a franchised location alleged sufficient facts to support a finding that the franchisor is a joint...more

Akerman LLP

New FTC Rule Spares Non-Compete Clauses That Bind Franchisees, But Bans Most “Worker” Non-Compete Clauses

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On April 23, 2024, the Federal Trade Commission (FTC) voted to issue a Non-Compete Clause Rule that would ban most non-compete clauses in agreements between businesses and their “workers.” The final rule will take effect 120...more

UB Greensfelder LLP

FTC Issues Rule Prohibiting Non-Competes

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On April 23, 2034, the Federal Trade Commission (FTC) issued a final rule intended to ban the use and enforcement of most non-compete clauses signed by workers. The new rule is not in effect yet. It will become...more

Troutman Pepper

Seventh Circuit Revives McDonald's Employee No-Poach Litigation

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In June of 2022, McDonald’s obtained a judgment on the pleadings, ending antitrust litigation challenging the legality of the no-hire restraints it previously included in its franchise agreements. More than a year later, the...more

Manatt, Phelps & Phillips, LLP

Fresh Off the Grill: No-Poach Agreements May Lead to Per Se Antitrust Liability, Says 7th Circuit

Introduction - No-poach agreements, wherein companies agree not to solicit or hire employees away from a competitor, have been targeted by the White House, the Federal Trade Commission (FTC) and the Antitrust Division....more

Quarles & Brady LLP

Seventh Circuit Rejects Dismissal of Franchisee No-Poach Clause Challenge

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In Deslandes v. McDonald’s USA LLC, issued August 25, 2023, the U.S. Court of Appeals for the Seventh Circuit overturned the dismissal of antitrust claims that challenged no-poach clauses in franchise agreements....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

Lewitt Hackman

Franchisee 101: No Joint Employer, No Cry

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A federal district court in New York dismissed workplace harassment and retaliation claims against corporate affiliates of the Golden Krust Caribbean Bakery & Grill franchisor for damages as a result of workplace harassment...more

Davies Ward Phillips & Vineberg LLP

Employers Beware: Amendments to the Canadian Competition Act’s Criminal Conspiracy Provisions Take Effect

Amendments to the Canadian Competition Act (Act), taking effect on June 23, 2023, will make it a criminal offence for unaffiliated employers to agree, conspire or arrange to: •“fix, maintain, decrease or control salaries,...more

Bilzin Sumberg

Eleventh Circuit Revives Putative Class Action Against Burger King for Violation of Federal Antitrust Laws Based on No-Poaching...

Bilzin Sumberg on

Arrington v. Burger King Worldwide, Inc., No. 20-13561 (11th Cir. Aug. 31, 2022) – In October 2018, a former line cook of a Burger King franchise restaurant in Illinois, filed a class action complaint in the District Court...more

Fisher Phillips

7-Eleven Franchise Owners Not Deemed Employees Under Massachusetts Law

Fisher Phillips on

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

Kilpatrick

Class Action | Eleventh Circuit Reinstates No Hire Antitrust Claims Against Burger King

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Partner Jay Bogan recently discussed the Eleventh Circuit Reinstating No Hire Antitrust Claims Against Burger King....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

Perkins Coie

Antitrust Challenge to McDonald’s No-Poach Restriction Evaluated Under the Rule of Reason

Perkins Coie on

A federal judge in the U.S. District Court for the Northern District of Illinois has held that an antitrust challenge to a “hiring restriction [that] prevented” plaintiff employees “from taking a better-paying position with a...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

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

Carlton Fields

Sixth Circuit Affirms Ruling That Arbitrator Is to Determine Arbitrability of Employment Dispute Between Franchise Employees and...

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The plaintiffs filed a class action against Domino’s, alleging that the company’s franchise agreement violated federal antitrust law as well as state law. ...more

Lathrop GPM

The Franchise Memorandum - Issue 249

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Welcome to The Franchise Memorandum by Lathrop GPM, formerly known as The GPMemorandum. Since December 1997, The GPMemorandum has been presenting summaries of recent legal developments of interest to franchisors and companies...more

Littler

Highest Court in Canada Says Substance, not Form, will Determine Independent Contractor or Employee Status

Littler on

A recent Supreme Court of Canada (SCC) decision considered whether a franchisee who entered into a franchise agreement with a franchisor was an employee or an independent contractor. The fact-specific case, Modern Cleaning...more

Orrick - Antitrust Watch

DOJ Publishes Statements Clarifying Its Analysis of No-Poach Agreements – But Questions Remain

Since issuing the DOJ/FTC Antitrust Guidance for Human Resource Professionals in 2016, the DOJ Antitrust Division has remained active in enforcing and commenting on agreements among employers not to compete for hiring...more

Fox Rothschild LLP

Just Signed! New Washington State Law Limits Use Of Non-Competes And No-Poach Agreements

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Yesterday, Washington’s Governor, Jay Inslee signed HB1450 [PDF] which targets the use of restrictive covenants in the State of Washington (the “Non-Compete Act”). The signing of the Non-Compete Act follows the recent...more

Dorsey & Whitney LLP

Employers Beware: Recent Developments in Employee No-Poaching Agreements

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No poaching agreements among employers continue to make antitrust news, and employers and their HR professionals need to take note. Whether or not a particular agreement has a valid purpose (such as protecting an employer’s...more

Sheppard Mullin Richter & Hampton LLP

Aiming for Clarity, DOL Proposes to Update the FLSA’s “Joint Employer” Regulations

Hoping to clarify when entities should be treated as “joint employers” under the FLSA, the Department of Labor (“DOL”) recently announced its intent to revise its so-called “joint employer” regulations under the Fair Labor...more

Akin Gump Strauss Hauer & Feld LLP

A Fresh Approach to No-Poach Provisions in Franchise Agreements

• The Antitrust Division of the Department of Justice (DOJ) and the Federal Trade Commission (FTC) have indicated in the past that they believe that certain agreements between employers not to poach each other’s employees are...more

McAfee & Taft

Employers must still use caution when using independent contractors

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A new opinion from the Tenth Circuit Court of Appeals, Acosta v. Jani-King of Oklahoma, Inc., is a reminder that there are still significant risks when classifying workers and independent contractors....more

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