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

Mealey's Franchise

July 21, 2021
11th Circuit: Orbitz’s Arbitration Terms Don’t Extend To Car Rental Franchisor

ATLANTA — A travel fare aggregator website’s arbitration agreement with customers doesn’t extend to a car rental franchise from whom customers rent cars as the terms of the agreement refer only to Orbitz.com’s products and services, an 11th Circuit U.S. Court of Appeals panel ruled July 14.
July 21, 2021
6th Circuit Upholds Jury Award In Minor’s Harassment Suit Against Steak ‘N Shake

CINCINNATI — A minor who alleged that she was sexually harassed at her place of employment successfully proved a hostile work environment and harassment but failed to establish that reporting the harassment was the but-for cause of removing her from the work schedule, the Sixth Circuit U.S. Court of Appeals ruled in a July 8 amended opinion, affirming a jury’s award of punitive damages and the trial court’s calculation of attorney fees for the former employee and the summary judgment ruling for the employer on the retaliation claim.
July 16, 2021
DOL Recovers Back Wages From Hotel Franchisee For Housekeepers

FAYETTEVILLE, N.C. — The U.S. Department of Labor (DOL) recovered $67,556 in back wages for 18 employees of a North Carolina hotel franchisee after determining that the employer’s piece-rate rate practice for housekeepers caused the hourly rate for some to fall below the federal minimum wage, the DOL announced July 14.
July 06, 2021
Domino’s Franchisee Supports Magistrate’s ‘Reasonably Approximated’ Expenses Report

CINCINNATI — A pizza restaurant franchisee filed a response on June 30 in a federal court in Ohio to objections by a delivery driver in which it supported a magistrate judge’s report and recommendation that vehicle-related expenses incurred by delivery drivers working for Domino’s Pizza franchises may be “reasonably approximated” under the Fair Labor Standards Act (FLSA).
June 30, 2021
Amended Class Suit Accuses Subway Of Misrepresenting Composition Of Tuna

OAKLAND, Calif. — A sandwich franchisor has violated California’s unfair competition law (UCL) and other state laws by labeling its tuna salad, sandwiches and wraps as “100% tuna” while failing to prevent adulteration in its supply chain or honor its representation that it has “a global ban on the sale of tuna species that come from anything less than healthy stocks,” two California consumers allege in an amended class complaint filed June 7 in a California federal court.
June 29, 2021
Judge Remands Spa’s Suit Against Professional Liability Insurer To Jersey Court

CAMDEN, N.J. — A federal judge in New Jersey on June 24 granted a beauty spa insured’s motion to remand its lawsuit seeking a declaration that its professional liability insurer has a duty to defend and indemnify it against underlying claims that one of its employees perpetuated a sexual act against one of its former customers, finding that complete diversity does not exist.
June 22, 2021
Franchise Groups: California’s Independent Contractor Test Is Preempted

SAN DIEGO — Arguing that they have standing and ripe and properly pleaded claims and have shown preemption, four franchising-related associations on June 18 filed an opposition in a California federal court to California’s motion to dismiss their amended complaint challenging the constitutionality of the state’s “ABC Test” to determine whether a worker is an employee or independent contractor.
June 21, 2021
Delivery Driver Objects To Magistrate’s ‘Reasonably Approximated’ Expenses Report

CINCINNATI — A report and recommendation by a federal magistrate judge in Ohio stating that vehicle-related expenses incurred by delivery drivers working for Domino’s Pizza franchises may be “reasonably approximated” under the Fair Labor Standards Act (FLSA) misinterprets the FLSA regulations or binding Supreme Court precedent, the lead plaintiff in the case argues in his June 9 objections.
June 16, 2021
$3.25M Papa John’s Drivers’ Expenses Settlement Preliminarily Approved

DAYTON, Ohio — A federal judge in Ohio on June 4 granted preliminary approval of a $3.25 million settlement reached by Papa John’s franchisees and delivery drivers who brought class and collective claims seeking reimbursement for actual expenses.
June 14, 2021
Franchisees’ Claims Of Being Steered To Black Communities Dismissed

CHICAGO — A federal judge in Illinois on June 9 dismissed with prejudice based on the two-year statute of limitations putative class claims by two Black franchisees that they were steered by a fast food franchisor to Black communities where white franchisees refused to operate restaurants due to higher overhead costs and employee turnover and denied as moot a motion to strike class allegations.
June 11, 2021
2nd Circuit Affirms Arbitration Denial In Subway TCPA Class Complaint

NEW YORK — A consumer who filed a class complaint against Subway Franchisee Advertising Fund Trust Ltd. alleging that it sent her and a proposed class unwanted text messages in violation of the Telephone Consumer Protection Act (TCPA) was not bound by an arbitration agreement on Subway’s website due to the company’s failure to provide users with a reasonable conspicuous notice that they were agreeing to such terms, a Second Circuit U.S. Court of Appeals panel ruled June 8.
June 10, 2021
DOL: States Lack Standing To Challenge Joint Employer Rule

NEW YORK — The U.S. Department of Labor (DOL) is considering whether to rescind the joint employer rule issued in February 2020; however, even if the rule is not rescinded, the states and commonwealth that have sued challenging the changes lack standing as the injuries they allege they will suffer “result entirely from their own policy changes,” the DOL argues in its reply brief filed May 28 in the Second Circuit U.S. Court of Appeals.
June 10, 2021
Unions To 2nd Circuit: NLRB Erred In Not Reopening Joint Employer Dispute

WASHINGTON, D.C. — Two unions challenging the National Labor Relations Board’s (NLRB) refusal to reopen the record and reconsider an order directing approval of settlement agreements between a fast food franchisor and franchisees accused of retaliating against workers involved in an organizing campaign for higher pay and the impartiality of one of the NLRB members and the substance of the agreements filed an opening brief on June 4 in the District of Columbia Circuit U.S. Court of Appeals, arguing that they must be permitted to present new evidence and challenging the standard of review used by the NLRB.
June 08, 2021
Judge Won’t Dismiss Restaurant Worker’s Title VII Claims Against McDonald’s

ST. LOUIS — A former employee who filed claims of sex discrimination and hostile work environment under Title VII of the Civil Rights Act of 1964 against McDonald’s Corp. and McDonald’s USA LLC and a franchisee made sufficient allegations based on the joint employer theory to state a claim for relief against the franchisors, a Missouri federal judge ruled June 3, denying motions to dismiss filed by the McDonald’s defendants.
June 07, 2021
Franchise Owners Appeal Dismissal Of $41M Coronavirus Coverage Dispute

NEWARK, N.J. — Owners of more than 120 franchise locations under the brands Wendy's, T.G.I. Friday's, Marriott and Hilton filed a notice of appeal in a New Jersey federal court on June 4 indicating they are seeking the Third Circuit U.S. Court of Appeal’s review of the lower court’s dismissal of their breach of contract lawsuit alleging $40,798,390 in damages for their losses resulting from the coronavirus pandemic.
June 07, 2021
Plethora Of Bar, Restaurant Owners, Operators Sue Insurer For Coronavirus Losses

CHICAGO — Owners and operators of various bars, restaurants and taverns, including the Buffalo Wild Wings franchise, sued their property and casualty insurer in a federal court in Illinois on June 2 for its failure to provide coverage for their lost business income arising from the ongoing coronavirus pandemic and subsequent executive orders issued by Illinois Gov. J.B. Pritzker.
June 04, 2021
Preliminary Approval Of $1.2M Wage, Hour Class Action Settlement Denied A 3rd Time

FRESNO, Calif. — A former Five Guys employee’s third motion seeking preliminary approval of a proposed $1.2 million class action settlement of allegations that the franchise chain and a franchisee violated federal and California consumer reporting laws, California wage-and-hour laws and California’s unfair competition law (UCL) does not provide sufficient information to show that it “is likely to be approved as ‘fair, reasonable, and adequate’ upon certification of the class,” a California federal judge ruled in an order filed June 1 that denied the motion without prejudice.
June 03, 2021
Ford To 6th Circuit: Fairness Act Can’t Protect Foreign Dealer From Arbitration

CINCINNATI — Ford Motor Co. in a June 1 appellee brief to the Sixth Circuit U.S. Court of Appeals says a Kuwaiti car dealer’s argument that the Motor Vehicle Franchise Contract Arbitration Fairness Act (the Fairness Act) applies to foreign dealers and should have precluded a district court from ordering it to arbitrate a dispute with Ford is moot and contends that the Fairness Act applies only domestically.
June 02, 2021
Papa John’s Franchisees Seek To Settle Drivers’ Expenses Suit For $3.25 Million

DAYTON, Ohio — Pizza delivery drivers employed by Papa John’s franchisees who brought class and collective claims seeking reimbursement for actual expenses moved in a federal court in Ohio on May 27 for preliminary approval of a $3.25 million settlement.
June 02, 2021
Franchise Owner’s Motion For Attorney Fees In EEOC Suit Denied By Federal Judge

WEST PALM BEACH, Fla. — A Florida federal judge on May 18 denied a post-settlement motion for attorney fees filed by the owner of multiple franchises in a dispute with the Equal Employment Opportunity Commission over an arbitration agreement employees were required to sign.
June 01, 2021
Engineering Firm: Building Designer Has No Evidence To Support Negligence Claim

RALEIGH, N.C. — An engineering firm named as a third-party defendant in a property owner and hotel franchisee’s suit over a building designer’s allegedly faulty plans says in a motion for summary judgment filed May 13 in federal court in North Carolina that the designer has not proffered any evidence that the firm violated its standard of care.
May 28, 2021
Insurer: No Coverage Owed For BIPA Suits Brought Against McDonald’s Franchisees

CHICAGO — An insurer on May 19 filed suit in an Illinois court, seeking a declaration that is has no duty to defend or indemnify McDonald’s and its franchisees against two underlying lawsuits alleging violations of the Illinois Biometric Information Privacy Act (BIPA), arguing that the underlying claims do not assert “bodily injury” or “property damage” that was caused by an “occurrence” nor do they allege “personal and advertising injury” under the policy.
May 28, 2021
Federal Magistrate Judge: Drivers’ Expenses May Be ‘Reasonably Approximated’

CINCINNATI — Vehicle-related expenses incurred by delivery drivers working for Domino’s Pizza franchises may be “reasonably approximated” under the Fair Labor Standards Act (FLSA) as there is “no genuine ambiguity” in the anti-kickback regulation, a federal magistrate judge in Ohio stated in her May 26 report and recommendation.
May 28, 2021
Wendy’s Franchisee Agrees To Settle Nevada Upper-Tier Minimum Wage Class Claims

LAS VEGAS — A Wendy’s franchise in Nevada has agreed pay more than $858,000 to settle class claims that it failed to pay workers who declined health benefits upper-tier minimum wages pursuant to state law, according to an order granting preliminary class settlement approval issued May 27 by a federal judge in Nevada.
May 27, 2021
Insurer Says District Court’s Ruling On COVID-19 Losses Must Be Affirmed

ATLANTA — A district court correctly found that an insured restaurant chain’s claim for loss of business income caused by shutdown orders issued by state governors in the wake of the COVID-19 pandemic is not covered because the decision is clearly supported by the insurance policy’s language and because the policy’s contamination exclusion bars coverage, an insurer says in a May 26 appellee brief filed in the 11th Circuit U.S. Court of Appeals.