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

Mealey's Franchise

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.
March 22, 2021
U.S. High Court Won’t Hear Franchisees’ Arbitration Delegation Appeal

WASHINGTON, D.C. — The U.S. Supreme Court on March 22 denied a petition for a writ of certiorari filed by two commercial cleaning business franchisees seeking resolution of a circuit split and a decision on whether a passing reference to a set of arbitration rules constitutes “clear and unmistakable” intent to delegate arbitrability issues to an arbitrator, rather than a court.
March 22, 2021
New York Justice: Motion To Vacate Injury Case Summary Judgment Lacks Merit

BRONX, N.Y. — A New York state court justice on Feb. 26 denied a motion to vacate a summary judgment upon default in favor of Dunkin' Donuts Franchising LLC, ruling that the action in a case alleging personal injuries from a fall in a driveway used by several businesses lacked merit against Dunkin'.
March 19, 2021
Federal Judge Dismisses Franchise Owners’ $41M Coronavirus Coverage Suit

NEWARK, N.J. — A federal judge in New Jersey on March 17 granted an insurer’s motion to dismiss a breach of contract lawsuit brought by the owners of more than 120 franchise locations under the brands Wendy's, T.G.I. Friday's, Marriott and Hilton, finding that the insureds’ “general statements that the COVID-19 virus was on surfaces and in the air at their properties is insufficient to show property loss or damage.”
March 18, 2021
New Jersey Federal Judge Enters Default Judgment Against Franchisee In Breach Case

NEWARK, N.J. — A New Jersey federal judge on March 10 granted a motion for default judgment against a franchisee and its two individual members that did not respond to a lodging franchisor’s lawsuit, ordering them to pay $151,846.25 on claims that they breached their franchise agreement and the members’ guaranty by selling a hotel to a third party without prior consent and failing to pay liquidated damages and recurring fees.
March 18, 2021
McDonald’s Seeks To Strike Class, Dismiss Race Bias Claims By Franchisees

CHICAGO — A fast food franchisor filed replies on March 8 in a federal court in Illinois supporting its motions to dismiss a racial discrimination action and to strike proposed class claims brought by two Black franchisees, arguing that the plaintiffs have failed to show intentional discrimination or that there was a nationwide conspiracy.
March 18, 2021
Federal Judge: Arby’s Failure To Provide Braille Gift Cards Not An ADA Violation

NEW YORK — A New York federal judge on March 8 dismissed with prejudice a blind man’s proposed class action alleging that the Arby’s fast food franchisor violated the Americans with Disabilities Act (ADA), as well as state and local laws, for failing to provide gift cards in Braille.