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Franchises Misclassification

Polsinelli

Global Franchise & Supply Network - 2025 Report

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While 2024 saw more stability in the financial markets than 2023, many challenges arose in 2024 for franchised businesses, manufacturers and retail chains, including bankruptcies of many large restaurant and retail chains,...more

Lathrop GPM

Massachusetts Supreme Judicial Court Rules that Franchisees Did Not Perform Services for Franchisor Within the Meaning of the...

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The Massachusetts Supreme Judicial Court answered “no” to a certified question from the First Circuit Court of Appeals asking whether plaintiff franchisees “‘perform any service’ for 7-Eleven within the meaning of [the...more

Troutman Pepper Locke

Can Nurses Lawfully Be Classified as Independent Contractors? September 2024 IC Legal ‎News Update

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One of the most important legal developments last month is a new lawsuit filed by registered nurses against a leading health care system alleging that they have been misclassified as independent contractors instead of...more

Constangy, Brooks, Smith & Prophete, LLP

Oh, thank heaven! 7-Eleven franchisees were not misclassified “employees,” MA high court rules

The Supreme Judicial Court of Massachusetts, answering a certified question, has ruled that five 7-Eleven franchisees were independent contractors, not misclassified “employees,” under the Massachusetts Independent Contractor...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

Lathrop GPM

First Circuit Certifies Second Employee Misclassification Question to Massachusetts Supreme Court in Ongoing 7-Eleven Case

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The First Circuit Court of Appeals recently certified to the Massachusetts Supreme Court the question of whether franchisee plaintiffs in an ongoing case pass the threshold inquiry under the state’s three-prong employee...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

Littler

Massachusetts Top Court Issues Key Ruling Impacting Independent Contractors

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On March 24, 2022, the Massachusetts Supreme Judicial Court (SJC) handed down a key ruling that could have a significant impact on franchising across the state. In Patel v. 7-Eleven, Inc., the SJC was asked whether the...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

Fisher Phillips

Massachusetts Franchise Owner-Operators May Be Employees of Franchisors

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The Massachusetts Supreme Judicial Court just held that 7-Eleven franchisees may be employees of 7-Eleven under Massachusetts wage and hour law. The March 24 decision in Dhananjay Patel v. 7-Eleven, Inc. will have significant...more

Lewitt Hackman

Franchisee 101: Jani-King Franchisees Wear Many Crowns

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Past and present franchisees of commercial cleaning service franchisor, Jani-King, brought claims for violation of Connecticut minimum wage and anti-kickback laws, and unjust enrichment. They claimed Jani-King misclassified...more

Fox Rothschild LLP

Franchising Threat No. 3: Other State Legislation And Policies

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The California version of the ABC test is arguably the most hostile to franchising. Nonetheless, the risk is not confined to California. This is because the ABC employee classification test, with variations, has been...more

McCarter & English, LLP

Massachusetts’ Strictest-In-The-Nation Definition Of “Employee” May Encompass Franchise Operators

When a worker is classified as an employee, a panoply of local, state, and federal laws regulate many facets of the relationship between the worker and the person or entity the worker serves. When a worker is not an...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

Fox Rothschild LLP

Franchising On The Precipice: Unknowns In Transition

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Change is coming, but will it be a welcome change or a harbinger of woe? Over the last 8 years or so, the ever-changing landscape of employment laws has arguably posed an existential threat to franchising. The franchise...more

Polsinelli

Evolving Worker Classification Standards and the Future of Franchising

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From a ballot measure in California, to a court decision in Massachusetts, to federal regulations proposed by the Department of Labor, several recent developments could impact whether a franchisor’s independent franchisees...more

Lewitt Hackman

Competing Tests: Employee or Independent Contractor? Saving the Franchise Model

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Download PDF Assembly Bill 5 took effect in California on January 1, 2020 and governs when a business can treat a worker as an employee as opposed to an independent contractor. Under AB5 and its “ABC” test, a hiring entity...more

Lathrop GPM

The Franchise Memorandum - Issue # 254

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Welcome to The Franchise Memorandum by Lathrop GPM, formerly known as The GPMemorandum. Below are summaries of recent legal developments of interest to franchisors. Given the widespread and evolving impact of the COVID-19...more

Best Best & Krieger LLP

Best in Law: AB5 and Franchisees

BB&K Partner Thomas O'Connell Explores the Independent Contractor Law's Impact on the Franchise Industry in a Southern California Newspaper Group Column - In enacting Assembly Bill 5 earlier this year, the California...more

Littler

New Jersey Enacts Legislative Package to Add Teeth to Worker Misclassification Laws

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Seeking to tighten worker misclassification enforcement in New Jersey, on January 20, 2020, Governor Phil Murphy signed into law a package of legislation to add misclassification penalties, allow stop-work orders against...more

Littler

Plaintiffs’ Bar Seeks to Expand Reach of California’s Dynamex Decision and ABC Test to Franchising, Joint Employment

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The battle over the scope and applicability of the so-called “ABC test” in determining California employers’ potential liability under wage and hour and other state labor laws continues unabated....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

Lewitt Hackman

Franchisors are “Lovin’ It”

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In a win for franchisors, the Ninth Circuit recently affirmed the district court’s summary judgment in favor of fast-food behemoth McDonald’s Corp., ruling that the franchisor is not a joint employer of its franchisees’...more

Littler

Dynamex Retroactivity Question Sent to California State Court

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On September 24, 2019, the U.S. Court of Appeals for the Ninth Circuit certified to the Supreme Court of California the question of whether that court’s landmark 2018 decision in Dynamex v. Superior Court should be applied...more

Fox Rothschild LLP

New California Law Imperils Franchise Model

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“Someday, California is going to disappear into the ocean.” That phrase usually refers to the San Andreas Fault. But for those in the franchise industry, it may now refer to AB-5, a new California law that calls for...more

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