Mealey's Franchise
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June 22, 2018
Collective Of Delivery Food Drivers Decertified In Misclassification Action
TAMPA, Fla. — A Florida federal judge on June 20 decertified a collective of food delivery drivers who allege that they were misclassified and denied minimum and overtime wages, ruling that the drivers failed to show that they are similarly situated (David Roberson, et al. v. Restaurant Delivery Developers, LLC, et al., No. 17-769, M.D. Fla., 2018 U.S. Dist. LEXIS 103044).
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June 22, 2018
Georgia Appeals Panel Finds Franchisor Not Vicariously Liable For Mishandled Funds
ATLANTA — A Georgia appeals court panel on June 14 reversed a trial court judge’s decision to deny a franchisor’s motion for judgment notwithstanding the verdict (JNOV) after it was found 12.5 percent liable for a franchisee’s mishandling of a $1 million escrow deposit for a commercial real estate transaction, finding that the plaintiff failed to show that the franchisor had control over the franchisee’s day-to-day operations (New Star Realty Inc. v. Jungang PRI USA LLC, No. A18A0777, Ga. App., 1st Div., 2018 Ga. App. LEXIS 377).
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June 22, 2018
8th Circuit: Franchisee Workers’ 1-Day Strike Was Protected Under Labor Act
ST. LOUIS — A one-day strike by workers at a Missouri Burger King franchise was protected under the National Labor Relations Act (NLRA) as any previous strikes they participated in against another employee don’t constitute “intermittent or recurrent strikes,” an Eighth Circuit U.S. Court of Appeals panel ruled June 12 (National Labor Relations Board v. EYM King of Missouri, LLC, No. 17-1944, 8th Cir., 2018 U.S. App. LEXIS 15760).
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June 22, 2018
Milk Tea Franchises Sued By EEOC For Sexual Harassment
SAN DIEGO — The Equal Employment Opportunity Commission filed a complaint on June 11 in a California federal court accusing franchisor Tapioca Express Inc. and two of the milk tea company’s franchisees of subjecting female employees to sexual harassment and causing some to quit as a result of the hostile environment (U.S. Equal Employment Opportunity Commission v. Tapioca Express, Inc., et al., No. 18-1217, S.D. Calif.).
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June 21, 2018
Judge Awards RE/MAX $231,989, Issues Permanent Injunction In Trademark Dispute
SYRACUSE, N.Y. — A New York federal judge on June 19 granted RE/MAX LLC’s motion for a default judgment against former franchisees, awarding the franchisor $231,989.23 in actual damages and issuing a permanent injunction enjoining the former franchisees from using, imitating, copying, duplicating or otherwise making use of RE/MAX marks (RE/MAX, LLC v. Robert Goodman Realty, LLC, et al., No. 17-0526, N.D. N.Y., 2018 U.S. Dist. LEXIS 101788).
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June 20, 2018
4th Circuit: Volvo Only Required To Buy Back Its Products From Dealer
RICHMOND, Va. — A Fourth Circuit U.S. Court of Appeals panel on May 25 ruled that Volvo North America LLC, doing business as Kenworth Truck Co., is only required to buy back its brand of vehicles from a dealership that was attempting to sell out to another dealership, finding that Volvo had the right of first refusal under Virginia law (Volvo Group North America LLC, d/b/a Kenworth Truck Co. v. Truck Enterprises Inc., et al., No. 17-1638, 4th Cir., 2018 U.S. App. LEXIS 13887).
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June 20, 2018
9th Circuit Sides With Fast Food Franchisor On Contract, Trademark Claims
SAN FRANCISCO — A California federal judge did not err in granting Jack in the Box Inc. (JIB) summary judgment on its allegations that a franchisee committed breach of contract and trademark infringement, the Ninth Circuit U.S. Court of Appeals ruled June 18 in a per curiam opinion (Jack in the Box Inc. v. Deepak Mehta, et al., No. 17-15336, 9th Cir., 2018 U.S. App. LEXIS 16362).
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June 20, 2018
Franchisee Cleared Of Trade Secrets Claims Is Denied Attorney Fees
AUSTIN, Texas — A buffet franchisee that was accused by the franchisor of stealing confidential information was not the “prevailing party” following voluntary dismissal of the claims and, even if it were, is not entitled to attorney fees and costs, a Texas federal magistrate judge ruled June 15 (Stockade Companies, LLC v. Kelly Restaurant Group LLC, No. 1:17-CV-143-RP, W.D. Texas, 2018 U.S. Dist. LEXIS 100535).
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June 20, 2018
Judge Allows Breach Of Contract Claim To Proceed In Tim Hortons Franchise Dispute
MIAMI — A Florida federal judge on June 12 found that fact issues preclude summary judgment in favor of Tim Hortons USA Inc. on franchisees’ breach of contract claim but concluded that the claim for tortious interference cannot survive judgment (Picktown Foods LLC et al. v. Tim Hortons USA, Inc., No. 17-21072, S.D. Fla., 2018 U.S. Dist. LEXIS 99203).
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June 14, 2018
Judge Stays Employee’s Fair Labor Standards Act Suit Pending Arbitration
SAN DIEGO — A federal judge in California on May 31 found that a Domino’s Pizza Corp. employee’s claims under the Fair Labor Standards Act (FLSA) should be arbitrated because an alternative dispute resolution (ADR) agreement is governed by the Federal Arbitration Act (FAA) and enforceable (John Ralph, et al. v. HAJ, Inc., et al., No. 17-cv-01332, S.D. Calif.).
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June 14, 2018
Judge Holds Fact Issues Exist As To Whether Hotel Franchisee Consented To Faxes
GREENVILLE, S.C. — After finding that a company failed to show that a hotel franchisee expressly consented to receiving faxes as part of a hotel franchise agreement, a South Carolina federal judge on June 12 refused to grant summary judgment in the case on the franchisee’s claim for violation of the Telephone Consumer Protection Act of 1991 (TCPA) (E&G, ex. rel. v. Mount Vernon Mills Inc., et al., No. 6:17-cv-00318, D. S.C., 2018 U.S. Dist. LEXIS 98034).
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June 13, 2018
Barrier Remains At Domino’s, Judge Rules, Refusing To Dismiss ADA Claim
MINNEAPOLIS — A Minnesota federal judge on May 14 denied a motion filed by a pizza franchise and property owner to dismiss claims for violation of the Americans with Disabilities Act (ADA) in relation to architectural barriers at a store, finding that one of the barriers identified by a customer remains at the property and that his claims were not moot (Scott Smith v. Bradley Pizza Inc., Inc. et al., No. 17-cv-2032, D. Minn., 2018 U.S. Dist. LEXIS 82592).
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June 12, 2018
Justice Dismisses Claims In Dispute Involving Buddha Bar New York Franchise
NEW YORK — A New York state justice on May 22 refused to dismiss claims for dissolution, breach of fiduciary duty, breach of contract and equitable accounting against certain defendants in a dispute arising from the establishment of a Buddha Bar franchise in Tribeca, N.Y.(MProsiemo Limited v. Arkadiy Vaygensberg, et al., No. 654565/2017, N.Y. Sup., New York Co., 2018 N.Y. Misc. LEXIS 2019).
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June 12, 2018
5th Circuit Affirms Dismissal Of Franchise’s Bankruptcy Petition As Unauthorized
NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on May 22 held that federal law does not prevent a bona fide shareholder from exercising its right to vote against a franchise’s bankruptcy petition just because the shareholder is also an unsecured creditor, finding that the issue of corporate authority to file a bankruptcy petition is left to state law and nothing there would nullify the shareholder’s right to vote against the bankruptcy petition (In Re: Franchise Services of North America, Incorporated v. United States Trustee, et al., No. 18-60093, 5th Cir., 2018 U.S. App. LEXIS 13332).
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June 11, 2018
Pennsylvania Federal Judge Partly Halts Termination Of Distributor Agreements
HARRISBURG, Pa. — In a June 7 memorandum, a Pennsylvania federal judge granted a preliminary injunction in part, upon finding that four plaintiff-distributors of Pella Corp. products will likely prevail on their claim that the window manufacturer breached the terms of its “Sales Branch Agreements,” which cover sales made to general contractors and businesses (Pella Products Inc., et al. v. Pella Corporation, No. 18-1030, M.D. Pa., 2018 U.S. Dist. LEXIS 95779).
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June 8, 2018
Hawaiian Restaurant Chain Sued For Hack Of Payment Card System
HONOLULU — Two customers of the Hawaiian-based restaurant chain Zippy’s filed a putative class action against the chain’s operator June 1 in Hawaii federal court, alleging negligence related to a recently announced breach of the Zippy’s payment system, which they say resulted in payment card fraud (Joshua Bokelman, et al. v. FCH Enterprises Inc., No. 1:18-cv-00209, D. Hawaii).
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June 7, 2018
Panel Rejects Franchisor’s Appeal To Reverse Invalidation Of Arbitration Clause
TRENTON, N.J. —A New Jersey appeals panel on June 5 refused to depart from its 2016 decision invalidating an arbitration clause in an agreement to participate at a trampoline park franchise, finding that the clause does not clearly and unmistakably inform signers that they are agreeing to waive their right to be heard in court or their constitutional right to a trial by jury or explain what arbitration is or how it differs from filing a claim in court (Alexander Defina v. Go Ahead and Jump 1, LLC, et al., No. A-1861-17T2, N.J. Super., App. Div., 2018 N.J. Super. Unpub. LEXIS 1303).
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June 6, 2018
NLRB Letter Confirms Commitment To Joint-Employer Rule-Making
WASHINGTON, D.C. — National Labor Relations Board Chairman John F. Ring sent a letter to three U.S. senators on June 5 confirming the NLRB’s plans to engage in joint-employer rule-making in the near future.
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June 5, 2018
Judge Refuses To Issue Injunction Reinstating Hotel Franchise Agreement
ALBUQUERQUE, N.M. — After finding that hotel franchisees would not suffer irreparable harm if a contract for the operation of a hotel were not reinstated and that they were unlikely to succeed on the merits of their claims asserted against the franchisors of the hotel, a New Mexico federal judge on June 1 denied a request for restraining order and injunction reinstating the franchise agreement (Presidential Hospitality, LLC, et al. v. Wyndham Hotel Group LLC, et al., No. 17-0981, D. N.M., 2018 U.S. Dist. LEXIS 92500).
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June 4, 2018
Judgment Reduced In Dispute Between Custard Franchisor, Franchisee
TOPEKA, Kan. — In a May 18 ruling, the Kansas Court of Appeals partly affirmed and partly reversed various findings by a district court judge in a dispute between a custard franchisor and franchisee, including that the franchisor is entitled to purchase a Kansas City, Mo., property at fair market value in view of the franchisee’s refusal to extend the parties’ agreement (Ronald D. Hendrix, et al. v. Jim Sheridan, et al., No. 117,112, Kan. App.).