SAN FRANCISCO — Three Volkswagen salespeople who brought class employment and unfair competition law (UCL) claims alleging that their business was harmed by the car maker’s emissions scandal failed to show that Volkswagen is their employer, a federal judge in California ruled Oct. 21, opining that evidence of training is insufficient to establish Volkswagen’s status as the employer and dismissing the claims with prejudice (In re: Volkswagen “Clean Diesel” Marking, Sales Practices, and Products Liability Litigation, No. 15-md-2672, MDL No. 2672, N.D. Calif., 2020 U.S. Dist. LEXIS 195614).
DETROIT — A Michigan federal judge on Oct. 19 confirmed in part an arbitration award in favor of the franchisor of an eco-friendly auto and truck wash that upheld a noncompete clause against a former franchisee, its principal and the principal’s family members (DetailXPerts Franchise Systems, LLC v. TKTM Enterprise, LLC, et al., No. 18-11823, DetailXPerts Franchise Systems, LLC v. Deck, Inc., et al., No. 19-10037, DetailXPerts Franchise Systems, LLC v. SRQ Detailers, et al., No. 19-12607, E.D. Mich., 2020 U.S. Dist. LEXIS 192673).
ATLANTA — Allegations of sex trafficking in several hotel chains were properly dismissed, the hotel chains franchisors argue to the 11th Circuit U.S. Court of Appeals in separate Oct. 16 appellee briefs, because the complaints were impermissible shotgun pleadings (Jane Doe #1, et al. v. Red Roof Inns, Inc., et al., Nos. 20-11764, 20-11769, 20-11770 & 20-11771, 11th Cir.).
NEWARK, N.J. — The owners of more than 120 franchise locations under the brands Wendy's, T.G.I. Friday's, Marriott and Hilton on Oct. 12 sued their all-risk commercial business insurer in a federal court in New Jersey for breach of contract and reformation, alleging that physical loss and damage caused by the novel coronavirus “directly led” to their subsequent $40,798,390 in economic damages (Manhattan Partners LLC, et al. v. American Guaranty and Liability Insurance Company, No. 20-cv-14342, D. N.J.).
ROCK ISLAND, Ill. — McDonald’s Corp. was hit with a complaint on Oct. 13 in an Illinois federal court by two former employees and a current employee accusing it of racial harassment and discrimination against Black employees and favoritism toward white employees (Selynda Middlebrook, et al. v. McDonald’s Corporation, et al., No. 20-4214, C.D. Ill.).
SACRAMENTO, Calif. — A California federal judge on Oct. 7 granted preliminary approval of a $10 million settlement in a putative wage and hour class action against a staffing agency, one of its franchisees and a wine servicing company because an issue of commonality in the class had been resolved (Michael H. Stoddart, et al. v. Express Services, et al., No. 12-1054, E.D. Calif.).
CHICAGO — An Illinois federal judge on Oct. 2 allowed an antitrust action against the National Association of Realtors (NAR) and seven real estate franchisors to proceed because homeowners sufficiently allege a conspiracy to artificially inflate commission offers to a successful buyer-broker for property listing on a multiple listing service (MLS) (Christopher Moehrl, et al. v. The National Association of Realtors, et al., No. 19-1610, N.D. Ill., 2020 U.S. Dist. LEXIS 182532).
MINNEAPOLIS — Allegations by a Denny's franchisee that its franchisor breached the Minnesota Franchise Act when it failed to renew a franchise agreement under "substantially similar" terms will proceed, according to a Sept. 30 opinion by a federal judge there (Rogers Family Foods LLC v. DFO LLC, No. 19-1476, D. Minn., 2020 U.S. Dist. LEXIS 180598).
NASHVILLE, Tenn. — A group of co-owners of 11 Popeyes Louisiana Kitchen Restaurants franchises failed to establish the need for a preliminary injunction enjoining another group of co-owners from selling the franchises, a Tennessee federal judge ruled Oct. 1, finding an unlikelihood of success on the merits of intentional misrepresentation and conversion claims (Rajendra Patel, et al. v. AR Group Tennessee, LLC, et al., No. 20-52, M.D. Tenn., 2020 U.S. Dist. LEXIS 182130).
NEW YORK — A federal district court did not err in dismissing a pension plan's consolidated amended securities class action complaint against a tax preparation services provider and two of its former senior executives stemming from the company's former CEO's sexual and personal misconduct without leave to amend because the pension plan failed to plead any sufficient material misrepresentations in making its federal securities law claims, a Second Circuit U.S. Court of Appeals panel ruled Sept. 30 in a summary order (In re Liberty Tax Inc. Securities Litigation, No. 20-652, 2nd Cir.).
SAN FRANCISCO — The franchisee of Outback Steakhouse restaurants in Arizona, Colorado, Nevada, New Mexico and California and its parent and affiliated companies on Sept. 29 sued an insurer in a California federal court, alleging that an all-risk insurance policy unambiguously provides coverage for its "direct and/or imminent physical loss" and property damage related to the novel coronavirus (Out West Restaurant Group Inc., et al. v. Affiliated FM Insurance Company, No. 20-06786, N.D. Calif.).
WILMINGTON, Del. — A Delaware federal judge on Sept. 29 confirmed a final arbitration award to former franchisees on post-termination rights against the franchisor of residential bath remodeling services as a result of the franchisor's breaches of franchise agreements (Rome Enterprises, Inc., et al. v. ReBath, LLC, 19-MC-191, D. Del., 2020 U.S. Dist. LEXIS 179078).
AMARILLO, Texas — A Krispy Kreme franchisee is owed $286,889.56 by the Texas Workforce Commission (TWC) as a refund for an increase in unemployment taxes paid as the result of an improper transfer of a predecessor's unemployment compensation experience rating to the franchisee, a Texas appeals panel held Sept. 25 (Dulce Restaurants, LLC v. Texas Workforce Commission, No. 07-19-00213-CV, Texas App., 7th Dist., 2020 Tex. App. LEXIS 7781).
MOBILE, Ala. — The operator of a Smoothie King franchise in Mobile paid $918 in back wages to seven employees denied emergency leave while being tested for COVID-19, caused by the novel coronavirus, or quarantining due to exposure at work, the U.S. Department of Labor (DOL) announced Sept. 21.
INDIANAPOLIS — Ranrae Inc., a Subway franchisee in Indiana, violated the Americans with Disabilities Act (ADA) when it rejected a heard-of-hearing job applicant due to his hearing and speech impairments, the Equal Employment Opportunity Commission alleges in a Sept. 23 class complaint filed in a federal court in Indiana (Equal Employment Opportunity Commission v. Ranrae, Inc., No. 20-2450, S.D. Ind.).
NASHVILLE, Tenn. — In a dispute over the termination of a franchise agreement, a franchisor of cleaning and damage restoration services was granted summary judgment in part on Sept. 21 by a Tennessee federal judge on the franchisor's breach of contract and trademark infringement claims as well as a breach of contract counterclaim brought by a former franchisee (Servpro Industries, Inc. v. Tammy Woloski, et al., No. 17-1433, M.D. Tenn., 2020 U.S. Dist. LEXIS 171955).
CHICAGO — A businessowners liability insurer filed suit in a federal court in Illinois on Sept. 21, seeking a declaration that it owes no coverage for an underlying class action alleging that a McDonald's franchise owner violated the Illinois Biometric Information Privacy Act (BIPA) when it scanned an employee's fingerprints but did not disclose the specific purpose for collecting, storing and using her biometric data (American Family Mutual Insurance Company v. McEssy Investment Company, et al., No. 20-05591, N.D. Ill., Eastern Div.).
DENVER — Dismissal of an insured's lawsuit against its commercial property insurance provider and the provider's parent company seeking coverage for business income losses at its franchised hair salons in Colorado and Missouri stemming from state and local governmental orders in response to the novel coronavirus pandemic is warranted because the insured has failed to state any viable claim against the defendants under the plain language of the policy, the defendants argue in a Sept. 11 motion to dismiss filed in Colorado federal court (Holtzman Enterprises Inc. v. Continental Casualty Co., et al., No. 20-2152, D. Colo.).
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).
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).