Mealey's Franchise : Mealey's : Legal News & Analysis

Mealey's Franchise

September 27, 2021
Radisson, Competitor Stipulate To Dismissal Of Claim Of Interference With Agreements

SPOKANE, Wash. — Following a stipulated motion to dismiss, a federal judge in Washington on Sept. 2 dismissed a lawsuit brought by Radisson Hotels International Inc., a hotel franchisor, alleging that one of its business competitors intentionally interfered with the franchise agreements of nine franchisees to acquire those franchisees and force the franchisor out of the subject territory.
September 27, 2021
Federal Judge Dismisses Golden Corral Franchisor’s Coronavirus Coverage Dispute

RALEIGH, N.C. — A federal judge in North Carolina on Sept. 8 granted an insurer’s motion for judgment on the pleadings and dismissed Golden Corral Corp. and Golden Corral Franchising Systems’ bad faith lawsuit seeking coverage for their financial losses arising from the suspension of their restaurant operations in response to the government orders prompted by the coronavirus pandemic, finding that the insureds have not plausibly alleged tangible, physical harm to their covered property or a tangible loss of their covered property.
September 27, 2021
DOL Announces Final Rule Allowing Penalties Where Employers Take Tips

WASHINGTON, D.C. — The U.S. Department of Labor announced a final rule on Sept. 23 that it says will restore the ability to levy civil money penalties up to $1,100 against employers who take workers’ tips and withdraw the civil money penalties’ provisions in the 2020 tip final rule that would have allowed the DOL to assess these penalties where such violations were found to be repeated or willful.
September 24, 2021
Black McDonald’s Franchisees Argue Against Dismissal Of Bias, Fraud Claims

CHICAGO — Two Black fast food franchisees who filed a second amended complaint alleging discrimination filed an opposition on Sept. 15 to the franchisor’s motions to dismiss and strike class allegations, arguing that they have addressed the issues raised in the previous dismissal by the federal judge in Illinois and added a claim for fraudulent concealment.
September 23, 2021
9th Circuit Reinstates Grubhub Driver’s Wage Claims For ‘ABC’ Test Consideration

SEATTLE — A district court must reconsider a food delivery driver’s wage claims under California’s “ABC” test, which distinguishes between employees and independent contractors in wage order cases as California’s Proposition 22 did not “abate” the application of the test to those claims, a Ninth Circuit U.S. Court of Appeals panel ruled Sept. 20.
September 23, 2021
Pizza Franchisees: Husband Is Not Employer, Emails Not Discoverable In Wage Suit

DAYTON, Ohio — A pizza shop franchisee and her limited liability companies named as defendants in a putative class complaint by a pizza delivery driver alleging improper reimbursement for vehicle expenses filed an opposition on Sept. 21 to the driver’s motion to compel discovery responses, arguing that the franchisee’s husband who was also named as a defendant is not an employer and so his emails are not discoverable.
September 21, 2021
7-Eleven Seeks Final Judgment In Its Favor After Franchisees Deemed Not Employees

LOS ANGELES — A convenience store franchisor on Sept. 16 filed a proposed final judgment in a federal court in California in favor of itself one week after the judge issued findings of fact and conclusions of law determining that 7-Eleven franchisees are independent contractors and not employees.
September 20, 2021
DOL Extends Effective Date For Rescission Of Joint Employer Status Rule

WASHINGTON, D.C. — The U.S. Department of Labor (DOL) on Sept. 20 announced an extension of the effective date of the rescission a joint employer status rule that took effect under President Donald J. Trump’s administration in March 2020.
September 15, 2021
Human Resources Expert Qualified To Opine On Staffing Standards, Judge Says

OXFORD, Miss. — A Mississippi federal judge on Sept. 13 rejected an employer’s attempt to narrowly define the expertise required in a wrongful death case, denying its motion to exclude filed in a case in which it is alleged that the company’s negligent hiring led to an employee’s death.
September 15, 2021
8th Circuit: Arbitration Waived In Anti-Competitive Realty Commission Class Suit

ST. LOUIS — One of the real estate broker franchisors accused in a putative class complaint of conspiring with other franchisors and the National Association of Realtors (NAR) to require home sellers to pay inflated broker commissions in violation of the Sherman Act waived its right to arbitrate after actively litigating the case for a year, the Eighth Circuit U.S. Court of Appeals ruled Sept. 10.
September 14, 2021
EEOC Hits Subway Franchise With Bias Suit; Judge Discourages Dismissal Motion

PHOENIX — The Equal Employment Opportunity Commission filed a disability bias complaint against a Subway franchise on Sept. 10, and a federal judge in Arizona the same day filed an order discouraging the parties from filing motions to dismiss or for judgment on the pleadings if any defects in the complaint could “be cured by a permissible amendment.”
September 13, 2021
Split 2nd Circuit Upholds Ruling For Cleaning Franchisor On Collection Of Fees

NEW YORK — A divided Second Circuit U.S. Court of Appeals panel on Sept. 9 ruled that a cleaning company franchisor’s compensation scheme, which included an initial franchise fee and ongoing payments from franchisees, did not violate Connecticut law even if the franchisees were found to be employees rather than independent contractors as the case law is clear that such fees are permitted and the franchisees received something of value, franchise rights, in exchange for the fees.
September 08, 2021
Sonic Denied Summary Judgment Over Data Breach Negligence Class Claim

CLEVELAND — An Ohio federal judge on Sept. 7 denied Sonic Corp.’s motion for summary judgment over a negligence claim brought against it by a class of financial institutions (FIs) related to the fast food chain’s 2017 data breach, with the judge finding that questions of material fact existed and holding that the key matter of proximate cause should be decided by a jury.
September 01, 2021
Final Approval Granted To Franchisee’s Upper-Tier Minimum Wage Class Settlement

LAS VEGAS — A federal judge in Nevada on Aug. 30 issued an order granting final approval of a more than $858,000 settlement to be paid by a Wendy’s franchisee in Nevada to settle class claims that it failed to pay workers who declined health benefits upper-tier minimum wages pursuant to state law.
August 30, 2021
3rd Circuit Affirms Franchisor’s Motion Seeking To Halt Use Of Trademarks

PHILADELPHIA — Two companies that purchased the right to franchise fitness studios failed to show that they are likely to succeed on claims that the fitness studio creator and her two companies breached their agreement or violated a noncompete clause when the creator failed to immediately begin operating her existing studios as franchises and instead began operating them under another name, the Third Circuit U.S. Court of Appeals held Aug. 10, affirming a district court’s denial of a motion for preliminary injunction.
August 30, 2021
McDonald’s Franchise, Workers Reach Settlement In COVID-19 Nuisance Suit

ALAMEDA, Calif. — A McDonald’s restaurant in Oakland, Calif., has agreed to improve its COVID-19 safety protocols in a settlement announced Aug. 5 to resolve a public nuisance lawsuit filed by its employees.
August 30, 2021
Washington Panel: Arbitrator’s Lost Profits For Franchisee Exceeded Authority

SEATTLE — A trial court’s order confirming an arbitration award of damages for a Pump It Up franchisee due to lost profits was reversed because the arbitrator exceeded his authority when he relied on New York case law to reclassify lost profits as actual damages even though the lessor and franchisee agreed to resolve disputes under Washington law, a Washington appellate court held Aug. 16, remanding for the trial court to vacate the order and order a rehearing.
August 27, 2021
Delaware Judge Denies Franchisor’s Motion To Stay In Vicarious Liability Suit

GEORGETOWN, Del. — A Delaware judge on Aug. 6 denied a franchisor’s motion to stay the proceedings in a lawsuit concerning liability for an alleged sexual assault by a franchisee’s former employee pending arbitration between the plaintiff customer and another franchisor defendant.
August 27, 2021
Judge OKs Checkers Data Breach Settlement, Rejecting Magistrate’s Recommendation

TAMPA, Fla. — After multiple rounds of briefing and a contrary view by a magistrate judge, a Florida federal judge on Aug. 25 granted final approval to the settlement of a class action over a 2019 data breach experienced by Checkers Drive-In Restaurants Inc., with the judge finding that the lead plaintiffs sufficiently establish standing to bring their claims, declining to adopt the magistrate’s recommendation to deny approval.
August 26, 2021
6th Circuit Rejects Sonic’s Class Certification Appeal In Data Breach Suit

CINCINNATI — Sonic Corp. failed to establish the need for an interlocutory appeal of a trial court’s ruling granting class certification to a group of plaintiff financial institutions (FIs) in a consolidated class action over the fast food chain’s 2017 data breach, a Sixth Circuit U.S. Court of Appeals panel ruled Aug. 24, finding that some of the defendant’s arguments pertain to causation rather than class certification.
August 26, 2021
Class Certification Denied In Employee’s No-Poach Suit Against Jimmy John’s

EAST ST. LOUIS, Ill. — A federal judge in Illinois in a partially redacted memorandum and order docketed July 30 denied motions for class certification and to strike declarations by a few franchisees in a lawsuit accusing a sandwich shop franchisor of wage suppression through the use of no-poach agreements with its franchisees.
August 25, 2021
Franchise Independent Contractor Question Certified To Massachusetts High Court

BOSTON — The First Circuit U.S. Court of Appeals on Aug. 9, in a case concerning 7-Eleven franchisees who have claimed in a putative class complaint that they were misclassified as independent contractors, certified a question to the Massachusetts Supreme Judicial Court concerning the application of the state’s independent contractor test to relationships between a franchisor and franchisees.
August 25, 2021
Divided Panel: Domain Names Are Confusingly Similar To Trademarks

ATLANTA — A panel majority of the 11th Circuit U.S. Court of Appeals on Aug. 6 upheld a Florida federal judge’s grant of summary judgment, agreeing that several accused domain names are confusingly similar to a trademark owned by a nationwide franchisor of hair removal services.
August 25, 2021
10th Circuit Dismisses Appeal Of Trademark Injunction As Moot

DENVER — The 10th Circuit U.S. Court of Appeals on Aug. 5 dismissed an appeal by a Sonic franchisee and its affiliates of a preliminary injunction barring their use of the “Sonic” trademark, which was later converted by an Oklahoma federal judge to a permanent injunction.
August 23, 2021
Wendy’s Franchisee Settles Nevada Upper-Tier Minimum Wage Class Claims

LAS VEGAS — A federal judge in Nevada on Aug. 19, according to a docket entry, granted final approval of a more than $858,000 settlement to be paid by a Wendy’s franchisee in Nevada to settle class claims that it failed to pay workers who declined health benefits upper-tier minimum wages pursuant to state law.