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

Mealey's Franchise

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.
August 12, 2021
McDonald’s, Franchisees, NLRB Argue Against Reopening Joint Employment Dispute

WASHINGTON, D.C. — McDonald’s USA LLC and franchisees filed intervenor briefs in the District of Columbia Circuit U.S. Court of Appeals on Aug. 10 supporting arguments by the National Labor Relations Board opposing efforts by unions to reopen arguments in an already settled joint employment dispute.
August 10, 2021
NLRB Argues Against Reopening Joint Employment Dispute After Settlement

WASHINGTON, D.C. — Settlement agreements between a fast food franchisor and franchisees accused of retaliating against workers involved in an organizing campaign for higher pay and now being challenged by two unions were reached via compromise and approved after changes to the joint-employer standard, the National Labor Relations Board argues in a brief filed Aug. 3 in the District of Columbia Circuit U.S. Court of Appeals opposing the unions’ arguments that they should be permitted to present new evidence and challenging the standard of review used by the NLRB.
August 09, 2021
3rd Circuit: Parties Must Address Appealability Of Pandemic Layoff Suit

PHILADELPHIA — The Third Circuit U.S. Court of Appeals on Aug. 2 ordered the parties in a lawsuit accusing an auto dealership of laying off a sales manager who requested to work from home after the coronavirus pandemic hit the United States in March 2020 to file responses addressing the appealability of a trial court’s order staying the case and compelling arbitration.
August 05, 2021
Federal Jury: Harley-Davidson Dealer Owes $500,000 For Sex Discrimination

TAMPA, Fla. — A federal jury in Florida on Aug. 3 returned a $500,000 punitive damages verdict in a lawsuit brought by the Equal Employment Opportunity Commission for a former Harley-Davidson dealer employee who alleged that she was denied a promotion due to her gender.
August 03, 2021
California High Court: Pay Rate For Missed Breaks Includes Nondiscretionary Pay

SAN FRANCISCO — The one hour of pay at the “regular rate of compensation” that must be provided under California law to employees when a meal or rest break is not provided “encompasses all nondiscretionary payments,” the California Supreme Court ruled July 15.
July 29, 2021
DOL Announces Final Rule Rescinding Trump-Era Joint Employer Status Rule

WASHINGTON, D.C. — The U.S. Department of Labor (DOL) on July 29 announced a final rule that will become effective on Sept. 28 rescinding a joint employer status rule that took effect under President Donald J. Trump’s administration in March 2020.
July 29, 2021
Guest Settles Claims Against Hotel Franchise; Racial Bias Claims Dismissed

RICHMOND, Va. — A Black hotel guest who alleged that a security guard discriminated and committed a hate crime against him under federal and state statutes when he repeatedly asked the guest in the hotel lobby if he “belonged there” and requested identification stipulated to dismiss the matter against Hilton hotel franchise owners and operators and a security service provider with prejudice on July 21 in a federal district court in Virginia.
July 26, 2021
Judge Grants Marriott Extension To Produce Discovery In Unfair Competition Suit

SAN DIEGO — A federal magistrate judge in California on July 20 granted a third joint motion for an extension of time to produce documents in a putative class action accusing Marriott of violating California’s unfair competition law (UCL) and other state statutes.