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

Mealey's Franchise

April 15, 2021
Volkswagen Salespersons Tell 9th Circuit Class Suit Was Wrongly Dismissed

SAN FRANCISCO — Three salespeople who allege that their business was harmed by Volkswagen’s emissions scandal tell the Ninth Circuit U.S. Court of Appeals in an April 9 appellant brief that a district court erred in concluding that the car maker was not their employer under California law and in granting a motion to dismiss their class employment and unfair competition law (UCL) claims.
April 14, 2021
10th Circuit: Franchisee Deprived Notice Of Entry Of Judgment

DENVER — In an April 13 ruling, the 10th Circuit U.S. Court of Appeals found that although a federal judge in Oklahoma did not abuse his discretion in granting a motion to enforce a settlement agreement between a franchisor and former franchisee accused of trademark infringement, he “went too far” in entering a $200,000 judgment.
April 14, 2021
OSHA Cites Tax Prep Franchisee For Failure To Provide COVID-19 Safeguards

BOSTON — The owner of a Liberty Tax Service location in Massachusetts must pay $136,532 in penalties for refusing to put in place various safeguards to protect employees and customers from coronavirus, including prohibiting employees and customers from wearing masks, the U.S. Department of Labor (DOL) announced April 13.
April 14, 2021
Judge: Spa Franchises’ Losses Do Not Implicate Communicable Disease Provision

WILMINGTON, N.C. — A federal judge in North Carolina on April 13 held that franchises of Hand and Stone Massage and Facial Spa fail to plausibly assert that their insurance policies’ Communicable Disease Provision was implicated by their claimed lost income arising from their business closures prompted by the coronavirus pandemic, finding that the insureds do not assert that COVID-19 was ever present at their insured premises.
April 14, 2021
Motel Denied Class Certification In Junk Fax Prevention Act Case Against Sprint

NEW HAVEN, Conn. — A Connecticut federal judge on March 31 denied class certification in a motel’s case claiming that Sprint Solutions Inc. sent five unsolicited fax ads over three years in violation of the Junk Fax Prevention Act, ruling that the motel cannot show that classwide issues predominate over individual issues of consent.
April 14, 2021
Split 8th Circuit Rules Litigation Strategy Not A Waiver Of Right To Arbitrate

ST. LOUIS — A split Eighth Circuit U.S. Court of Appeals panel on March 30 reversed a district court’s denial of a motion to compel arbitration, ruling in a 2-1 decision that a corporation’s litigation strategy did not waive its right to arbitrate with a former employee who alleged that a franchise violated the Fair Labor Standards Act (FLSA) by failing to pay overtime.
April 13, 2021
Dispute Over Business Coaching Franchise Royalties Allowed To Proceed By Federal Judge

CINCINNATI — An Ohio federal judge denied business coaching franchisees’ motion to dismiss for lack of personal jurisdiction, failure to state a claim and improper venue on March 31 in a franchisor’s suit accusing the defendants of failing to pay royalties due under the franchise agreement after they changed the name of their business without consent. The judge agreed to dismiss a fraud claim against the owner of the franchise.
April 13, 2021
90 Franchisees Ordered To Individually Arbitrate Discrimination, RICO Claims

ALLENTOWN, Pa. — A Pennsylvania federal judge on March 19 granted a hotel franchisor’s motion to compel arbitration, ruling that arbitration clauses in its franchise agreements with 90 franchisees are valid and enforceable, ordering individual arbitration on the franchisees’ allegations that the franchisor discriminated against Indian-American and South-Asian American franchisees and violated the Racketeer Influenced and Corrupt Organizations Act (RICO) with a $61.4 million kickback scheme.
April 13, 2021
Judge Denies Franchisor’s Bid To Compel Arbitration In Scope Of Agreement Dispute

DETROIT — A Michigan federal judge on March 31 denied a franchisor’s motion to compel arbitration, holding that its dispute with two franchisees over the operation of a virtual computer training platform did not implicate the parties’ franchise agreements. The dispute fell under the parties’ participation agreements (PAs), which do not contain an arbitration clause, the judge said.
April 13, 2021
Domino’s Delivery Drivers Seek Final Approval Of Class Settlement In Mileage Dispute

NEWARK, N.J. — Domino’s pizza restaurant franchise delivery drivers on April 1 filed an unopposed motion in a New Jersey federal court for final approval of a $1.48 million class action settlement. The deal would resolve claims that the franchise owners and operators short-changed their delivery drivers in reimbursing them for the miles they drove their vehicles for work.
April 13, 2021
Sex Trafficking Suit Against 3 Hotel Chains Dismissed By Oregon Federal Judge

PORTLAND, Ore. — Rejecting new claims asserted in an amended complaint, an Oregon federal judge on March 31 dismissed with prejudice a woman’s suit against three hotel chains alleging violations of the Trafficking Victims Protection Reauthorization Act (TVPRA) by profiting from her sex trafficking.
April 12, 2021
Tennessee Federal Judge Rules Hotel Franchisor Not Liable For Assault Of Guest

NASHVILLE, Tenn. — A family failed to show that a hotel franchisor was vicariously or directly liable for injuries the father suffered in an alleged assault by a hotel franchisee employee and her boyfriend, a federal Tennessee judge concluded March 24 in granting summary judgment to the franchisor.
April 12, 2021
Connecticut Federal Judge Dismisses Hotel Franchisee’s Suit Over Unsolicited Faxes

NEW HAVEN, Conn. — Because a Wyndham hotel franchisee gave a Wyndham-approved vendor its contact information, it could not argue that six fax advertisements it received from the vendor were unsolicited and in violation of the Telephone Consumer Protection Act (TCPA), as amended by the Junk Fax Prevention Act (JFPA), a Connecticut federal judge held March 26 in granting the vendor’s summary judgment motion and denying the franchisee’s motion.
April 07, 2021
Domino’s Granted Stay Pending Appeal Of Arbitration Denial In Putative Class Suit

SANTA ANA, Calif. — A federal judge in California on March 31 granted a pizza company’s motion to stay a putative class complaint over truck drivers’ cell phone expenses pending appeal of the denial of its motion to compel arbitration.
April 07, 2021
Outback Steakhouse’s Franchisee Appeals No Coverage Ruling In Coronavirus Suit

SAN FRANCISCO — A franchisee of Outback Steakhouse restaurants in Arizona, Colorado, Nevada, New Mexico and California and its parent and affiliated companies on April 1 filed a notice of appeal in the Ninth Circuit U.S. Court of Appeals challenging a lower court’s finding that they have failed to plausibly allege “direct physical loss of or damage to” their property to trigger coverage under the policy in a coronavirus coverage suit.
April 06, 2021
Trade Groups Oppose Motion To Hold Joint Employment Appeal In Abeyance

NEW YORK — Trade groups that together with the former U.S. secretary of Labor who was appointed under President Donald J. Trump appealed a trial court’s ruling for various states deeming 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” filed an opposition on April 5 to the recently appointed secretary’s motion to hold the appeal in abeyance.
April 05, 2021
Magistrate Judge Recommends Dismissing Man’s Bias Suit Against Mitsubishi Franchisor

NEW YORK — A New York federal magistrate judge on March 18 recommended that a Mitsubishi dealership franchisor be dismissed from a terminated franchisee employee’s suit alleging age and race discrimination. The magistrate judge said the franchisor had not been named in the underlying Equal Employment Opportunity Commission charge and was not the plaintiff’s employer or joint employer.
April 02, 2021
New Jersey Appeals Court Reverses Arbitration Agreement Denial In Injury Suit

TRENTON, N.J. — New Jersey Superior Court Appellate Division on March 30 reversed a trial court’s ruling denying reconsideration of a motion to compel arbitration in an injury lawsuit against a trampoline park and its franchisor and remanded the case for arbitration, noting the state high court’s reversal of an earlier opinion on which the trial court had relied and holding that the unavailability of the arbiter specified in the arbitration provision does not make the provision unenforceable.
March 30, 2021
Illinois Federal Judge Dismisses Putative Class Action On Planet Fitness Fees

CHICAGO — An Illinois federal judge on March 26 dismissed all claims against Planet Fitness Inc. and related entities in a putative class action case alleging that the chain unlawfully charged membership fees while restricting access during the COVID-19 pandemic, ruling that one named plaintiff was subject to an arbitration provision within a membership agreement and that the other named plaintiff’s membership agreement was with a party that could not be joined to the action.
March 30, 2021
Federal Judge Allows Dealerships’ Suit Against GM To Proceed, Minus Race Bias Claims

DETROIT — A Michigan federal judge on March 26 upheld claims against General Motors LLC (GM) brought by two dealerships under a federal antitrust law and a federal law protecting automobile dealership franchises from manufacturers’ bad faith actions. But she agreed to dismiss the remaining claims, including allegations of racial discrimination over the application of a family discount program for GM employees and former employees.
March 26, 2021
Subway Franchisee Agrees To $28,700 Settlement In EEOC Bias Suit

INDIANAPOLIS — A Bloomington, Ind., Subway franchisee will pay $28,700 to end a disability discrimination lawsuit filed by the Equal Employment Opportunity Commission in a federal court in Indiana after the sandwich shop allegedly rejected a hard-of-hearing job applicant due to his hearing and speech impairments, the EEOC announced March 25.
March 26, 2021
9th Circuit Denies Rehearing In Franchisee Misclassification Appeal

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on March 25 denied a petition for rehearing or rehearing en banc filed by a cleaning company franchisor after the appellate court issued an amended opinion on Feb. 2 vacating a summary judgment ruling for the franchisor and remanding for the district court to consider whether the janitors are employees under the Dynamex Operations West, Inc. v. Superior Court standard in the first instance.
March 26, 2021
McDonald’s Granted Judgment In Cybersquatting Suit Over Use Of ‘McD’ Domains

SEATTLE — A man who registered several internet domains incorporating McDonald’s Corp.'s valid “McD” trademark, did so with a bad faith intend to profit by seeking to obtain payment from the fast food chain in exchange for his delivery of misdirected emails, a Washington federal judge ruled on March 23, granting summary judgment to McDonald’s on its cybersquatting counterclaim against the man.
March 25, 2021
6th Circuit Told Fairness Act Applies To Foreign Dealers And Arbitrability

CINCINNATI — A Kuwaiti car dealer in a March 22 appellant brief urges the Sixth Circuit U.S. Court of Appeals to find that the Motor Vehicle Franchise Contract Arbitration Fairness Act (the Fairness Act) applies to foreign dealers and that a district court reversibly erred by ordering it to arbitrate breach of contract claims against Ford Motor Co. rather than first evaluating the claims’ arbitrability.
March 22, 2021
McDonald’s, Franchisees Permitted To Intervene In Joint Employment Appeal

WASHINGTON, D.C. — The District of Columbia Circuit U.S. Court of Appeals on March 19 granted motions for leave to intervene filed by the franchisor and franchisees in an appeal by two unions seeking review of the National Labor Relations Board’s orders in a joint employment dispute.