Tag Archives: franchise

DOL Unveiled Alliance with Franchise Restaurant to Improve Wage-and-Hour Compliance

By: Sheila Raftery Wiggins

The U.S. Department of Labor unveiled its alliance with a sandwich franchisor to help improve the franchisee owners’ compliance with wage-and-hour laws. Under this agreement, the franchisor agreed to share data and swap ideas about promoting compliance with labor laws and co-developing training materials for distribution to franchisee owners. The agreement also includes a commitment to “explore ways to use technology to support franchisee compliance, such as building alerts into the payroll and scheduling platform that [the franchisor] offers as a service to its franchisees.” WARNING: Agreements like these may support a joint employer determination. Whether this agreement is truly a “recipe for success” is in the fine details.

Sheila Raftery Wiggins, of the Newark office, handles matters involving complex commercial disputes, insurance defense, coverage disputes, financial fraud, and attorney ethics.

Two Lessons to Avoid a Franchise Price Discrimination/Distribution Lawsuit

By: Sheila Raftery Wiggins

Design business practices by incorporating the lessons offered by other parties’ lawsuits. The lessons from a recent franchise/commodity distribution federal court case are that:

  • Watch forecasting statements: A franchisor which changes its policy—here, the rent policy changed—should avoid making representations regarding the future of the franchise (such as, we will not sell the franchise agreements—when an alleged plan to assign the agreement exists).
  • Actions/practices may trump the franchisee agreement’s terms: A franchisor’s actions—such as alleged manipulation of the delivery time of a commodity based on price fluctuations—may prompt a price discrimination claim even though the franchise agreement grants the franchisee the power to determine their own retail prices.

In New Jersey federal court, franchisees sued the franchisor regarding its:

  1. delivery actions – of allegedly manipulating pricing and delivery times immediately before the commodity price dropped,
  2. pricing practice – of dividing the state into zones and charging retailers different wholesale prices and
  3. alleged misrepresentations – of stating that the franchise agreements will not be sold, even though there was allegedly a plan to assign the agreements.

The franchisor sought an early dismissal of the lawsuit. The New Jersey federal court noted that many of the allegations are fact-based, and thus, the lawsuit may—at this point—proceed.

Sheila Raftery Wiggins, of the Newark office, handles matters involving complex commercial disputes, insurance defense, coverage disputes, financial fraud, and attorney ethics.

Submit Input: Appeals Court Hears the Franchise/Subcontractor Joint Employer Issue

By: Sheila Raftery Wiggins

The joint employer controversy flared-up against franchisors and companies that subcontract jobs as to whether their actions—controlling the work conditions and tasks of the franchisees/subcontractor’s employees—render the franchisor/business a joint employer of those employees. OPPORTUNITY TO SUBMIT INPUT: Browning-Ferris Industries appealed to the U.S. Court of Appeals in Washington, D.C. the NLRB’s groundbreaking 2015 ruling. Consider submitting “friend of the court” papers in the appeal on behalf of your company or industry group.

Sheila Raftery Wiggins, of the Newark office, handles matters involving complex commercial disputes, insurance defense, coverage disputes, financial fraud, and attorney ethics.