Mealey's Franchise

  • September 18, 2020

    NLRB Won't Reopen Record On McDonald's Joint Employment After Settlement Order

    WASHINGTON, D.C. — A three-member panel of the National Labor Relations Board (NLRB) on Sept. 16 declined to reopen the record and reconsider a Dec. 12 order in which an NLRB panel ruled 2-1 to vacate an administrative law judge's (ALJ) order that denied approval of multiple settlement agreements involving McDonald's USA LLC, McDonald's Restaurants of Illinois Inc. and a large number of franchisees accused of retaliating against workers involved in an organizing campaign for higher pay based on a lack of finding that McDonald's USA was a joint employer and remanded the case to the ALJ with instructions to approve the agreements (McDonald's USA, LLC, et al. and Fast Food Workers Committee, et al., Nos. 02-CA-093893, 04-CA-125567, 13-CA-106490, 20-CA-132103, 25-CA-114819 and 31-CA-127447, NLRB).

  • September 18, 2020

    2nd Circuit Upholds Denial Of Arbitration To Subway In TCPA Action

    NEW YORK — The Second Circuit U.S. Court of Appeals on Sept. 15 affirmed a lower court's denial of a request made by the franchisor of Subway restaurants to arbitrate a putative class action concerning violations of the Telephone Consumer Protection Act (TCPA) because an agreement to arbitrate does not exist between the parties under New York law (Luis Arnaud v. Doctor's Associates, Inc., No. 19-3057, 2nd Cir., 2020 U.S. App. LEXIS 29504).

  • September 18, 2020

    5th Circuit Issues 2 Rulings In Franchisee Worker's Bias, Retaliation Suits

    NEW ORLEANS — A former employee of an Ameriprise franchisee may proceed with allegations against a practice affiliated with Ameriprise that she was fired in retaliation for complaining of gender bias, but failed to successfully challenge a federal court's jurisdiction over her challenge of an arbitration award dismissing her claims against the franchisees, a Fifth Circuit U.S. Court of Appeals panel ruled in two separate opinions, one issued Sept. 15 and the other on Sept. 11 (Denise A. Badgerow v. Greg Walters, et al., No. 19-30766, 2020 U.S. App. LEXIS 29339, Denise A. Badgerow v. REJ Properties, Incorporated, No. 19-30584 and 19-30687, 5th Cir., 2020 U.S. App. LEXIS 28954).

  • September 18, 2020

    Hawthorn Suites Franchisee Sued By EEOC For Harassment, Retaliation

    SEATTLE — The owner of a Kent, Wash., Hawthorn Suites by Wyndham violated federal law when it allowed a manager to sexually harass two housekeepers and retaliate against one of them after she complained, the Equal Employment Opportunity Commission alleges in a complaint filed Sept. 17 in a federal court in Washington (Equal Employment Opportunity Commission v. GIPHX10, LLC, No. 20-1369, W.D. Wash.).

  • September 17, 2020

    Judge Denies Dismissal Of Hotel Franchisor's Case Against Note Guarantor

    NEW YORK — Because a hotel franchisor successfully alleges consideration for a guaranty, a New York federal judge on Sept. 14 refused to dismiss a breach of contract suit against an alleged guarantor of the note related to a franchise agreement (Wyndham Hotel Group International, Inc. v. Silver Entertainment LLC, et al., No. 15-7996, S.D. N.Y., 2020 U.S. Dist. LEXIS 167642).

  • September 16, 2020

    Judge Awards Gas Station Franchisee $46,887.36 For Franchisor's PMPA Violation

    TRENTON, N.J. — A gas station franchisee was awarded $46,887.36 by a New Jersey federal judge on Sept. 14 in a bench trial because a gas distributor violated the Petroleum Marketing Practices Act (PMPA) by failing to renew or terminate their franchise agreement in good faith (Four S Shell, LLC v. PMG, LLC, No. 16-5701, D. N.J., 2020 U.S. Dist. LEXIS 167673).

  • September 16, 2020

    Alabama Federal Magistrate Judge Finds Jurisdiction Lacking Over Franchisee

    BIRMINGHAM, Ala. — A franchisor's effort to remand its dispute with a franchisee to Alabama state court failed Sept. 14, when a federal magistrate judge in Alabama instead ruled that the franchisee is entitled to dismissal for lack of personal jurisdiction (AFC Franchising LLC v. Danilo Purugganan, No. 20-456, N.D. Ala., 2020 U.S. Dist. LEXIS 167094).

  • September 15, 2020

    Collective Suit Conditionally Certified Over KFC, Taco Bell Franchisee's Wage Violations

    GREENBELT, Md. — A federal judge in Maryland on Sept. 11 conditionally certified collective action over allegations that a franchisee of 700 Kentucky Fried Chicken (KFC) or Taco Bell restaurant franchises violated the Fair Labor Standards Act (FLSA) and certain Maryland wage laws with regard to the franchisee's failure to pay for all time worked, including overtime (Latoya Lancaster, et al. v. FQSR, LLC, No. 19-2632, D. Md., 2020 U.S. Dist. LEXIS 166285).

  • September 14, 2020

    Judge Dismisses 6 Hotel Chains From Lawsuit Over Sex Trafficking Profiteering

    PORTLAND, Ore. — An Oregon federal judge on Sept. 8 dismissed six hotel chains from a woman's suit alleging violations of the Trafficking Victims Protection Reauthorization Act (TVPRA) by profiting from sex trafficking but allowed amendment as to four of the chains (A.B. v. Hilton Worldwide Holdings Inc., et al., No. 19-1992, D. Ore., 2020 U.S. Dist. LEXIS 163412).

  • September 14, 2020

    7-Eleven Awarded Summary Judgment In Franchisees' Misclassification Class Action

    BOSTON — A federal judge in Massachusetts on Sept. 10 awarded summary judgment to 7-Eleven Inc. on claims brought by four franchisees who sought class certification for being misclassified as contractors rather than employees, finding that the Federal Trade Commission's regulatory regime for franchises governs over the state's independent contractor law (Dhananjay Patel, et al. v. 7-Eleven Inc., et al., No. 17-11414, D. Mass., 2020 U.S. Dist. LEXIS 165057).

  • September 10, 2020

    Direct Marketing Services Franchisor Awarded Summary Judgment On Counterclaims

    SEATTLE — A franchisor of direct marketing services was granted summary judgment on a franchisee's contract, statutory and common-law counterclaims by a Washington federal judge on Sept. 8 because there is no evidence the franchisor marked up its products and services (Money Mailer, LLC v. Wade G. Brewer, No. 15-1215, W.D. Wash., 2020 U.S. Dist. LEXIS 163630).

  • September 10, 2020

    Panel: No Negligence By Chick-Fil-A Franchisee In Playground's Cleaning

    ATLANTA — Parents failed to show that actions by a franchisee of Chick-Fil-A in the cleaning process for a playground resulted in injuries to their minor son, a Georgia appeals panel ruled Aug. 20, upholding summary judgment to the franchisee on negligence theories (Craig Stern, et al. v. David Pettis, et al., A20A1261, Ga. App., 2nd Div., 2020 Ga. App. LEXIS 456).

  • September 10, 2020

    Discovery On Franchisees Permitted In Suit Over Jimmy John's No-Poach Agreements

    EAST ST. LOUIS, Ill. — Finding that both sides "were in the wrong" in a disagreement over discovery related to newly revealed declarants in an employment antitrust putative class action, an Illinois federal judge on Sept. 4 partly granted Jimmy John's Franchise LLC's motion to stay third-party discovery on the declarants, while extending a deadline for the lead plaintiff to conduct additional discovery on some of the declarants without broadening the overall scope of discovery (Donald Conrad, et al. v. Jimmy John's Franchise, LLC, et al., No. 18-133, S.D. Ill., 2020 U.S. Dist. LEXIS 162146).

  • September 09, 2020

    New York Federal Judge Strikes Changes To Vertical Joint Employment

    NEW YORK — A federal judge in New York on Sept. 8 deemed the portions of the U.S. Department of Labor's (DOL) final rule revising its regulations interpreting vertical joint employer liability as "arbitrary and capricious," in conflict with the Fair Labor Standards Act (FLSA) and "flawed in just about every respect" but found the portion making nonsubstantive changes to horizonal joint employer liability permissible and severable (New York, et al. v. Eugene Scalia, et al., No. 20-1689, S.D. N.Y., 2020 U.S. Dist. LEXIS 163498).

  • September 08, 2020

    Judge Upholds Dismissal Of Former 7-Eleven Franchisee's Breach Of Contract Suit

    PHILADELPHIA — A former franchisee of 7-Eleven on Sept. 3 was denied reconsideration by a Pennsylvania federal judge on the dismissal of his breach of contract lawsuit because Section 2 of the franchise agreements did not impose a duty on 7-Eleven to support an independent contractor claim (Azmi Takiedine v. 7-Eleven, Inc., No. 17-4518, E.D. Pa., 2020 U.S. Dist. LEXIS 161103).

  • September 08, 2020

    No Reconsideration For Former Franchisee On Award Issued To 7-Eleven

    PHILADELPHIA — Reconsideration of a $159,566.78 award to 7-Eleven Inc. on its breach of contract and breach of guaranty counterclaims against a former franchisee and a guarantor is not needed, a Pennsylvania federal judge said Sept. 3, finding that a merchandising evaluation "was inconsequential" as Section 2 of the franchise agreements did not impose any duties on 7-Eleven (Anthony Chong, et al. v. 7-Eleven, Inc., No. 18-1542, E.D. Pa., 2020 U.S. Dist. LEXIS 161110).

  • September 03, 2020

    Amici Argue Both Sides In California High Court Briefs Over Dynamex Retroactivity

    SAN FRANCISCO — In the latest of a series of amicus curiae briefs recently filed in a case before the California Supreme Court regarding whether the ruling in Dynamex Operations West, Inc. v. Superior Court should be applied retroactively, the Taxicab Paratransit Association of California (TPAC) in an Aug. 28 brief argues in support of forward-looking application only (Gerardo Vazquez, et al. v. Jan-Pro Franchising International, Inc., No. S258191, Calif. Sup.).

  • September 03, 2020

    Black Former Franchisees Accuse McDonald's Of History Of Discrimination

    CHICAGO — McDonald's has "a decades-long history of racial discrimination" against its own Black franchisees, former franchisees allege in an Aug. 31 complaint in an Illinois federal court (Christine Crawford, et al. v. McDonald's USA, LLC, et al., No. 20-05132, N.D. Ill.).

  • September 01, 2020

    Judge Sends Franchise Dispute Against Edible Arrangements To Arbitration

    NASHVILLE, Tenn. — A Tennessee federal judge on Aug. 27 sent a breach of contract suit brought by franchisees of Edible Arrangements LLC (EA) to arbitration based upon a clause in the franchise agreements despite the "creativity" of the franchisees' arguments (Fruit Creations, LLC, et al. v. Edible Arrangements, LLC, et al., No. 20-479, M.D. Tenn., 2020 U.S. Dist. LEXIS 156779).

  • August 28, 2020

    McDonald's, Franchisees Seek Coverage For Suit Disputing Safe Work Environment

    CHICAGO — McDonald's Corp. and former and current franchise owners on Aug. 27 sued their insurer in a federal court in Illinois for breach of contract and declaratory relief, seeking coverage for an underlying class action injunction alleging that they are taking inadequate steps to contain COVID-19 in the workplace (McDonald's Corporation, et al. v. Austin Mutual Insurance Company, No. 20-05057, N.D. Ill.).