Franchise Focus

Esguerra-Aguilar, Inc. v. Shapes Franchising, LLC: Court Finds Incorporation of Arbitration Rules Allows Arbitrator to Determine Arbitrability of Dispute

Jul 9, 2020Legal AlertsCFIL, Federal Court

Executive Summary: In an unreported decision, Judge Freeman of the United States District Court for the Northern District of California granted a franchisor’s motion to stay proceedings pending arbitration finding that the parties delegated the question of arbitrability to the arbitrator to decide by incorporating, by reference, the AAA and NAF arbitration rules. Citation: Esguerra-Aguilar, Inc. v. Shapes Franchising, LLC, 2020 […]

BP Products North America Inc. v. Petroleum: Yet Another Lesson in the Need for Clarity for Potential Costs for Franchisees

Apr 27, 2020Legal AlertsCFIL

Executive Summary: In an unreported decision, Judge Rogers of the United States District Court for the Northern District of California denied a franchisor’s motion for a preliminary injunction against a franchisee who was previously terminated for failing to implement a new marketing program based on the franchisee’s argument that the franchise agreement did not “require” it to take on these additional […]

National Labor Relations Board Follows Department of Labor’s Lead and Publishes Franchisor Friendly Joint Employer Rule

Feb 25, 2020Legal AlertsEmployment Law, Joint Employer, Labor Law, NLRB

Executive Summary The National Labor Relations Board adopts a joint employer rule that negates indirect control and explicitly limits the terms and conditions of employment which may be analyzed when determining if two or more entities are joint employers. Analysis On February 26, 2020, the National Labor Relations Board (“NLRB”) released its final rule regarding the determination of joint employer […]

Department of Labor Publishes Franchise Friendly Joint-Employer Rule

Jan 13, 2020Legal AlertsDepartment of Labor, Employment Law, Joint Employer

Executive Summary The U.S. Department of Labor released a final rule regarding the determination of joint employer status under the FLSA. The standard largely mirrors the Bonnette standard that was well-settled law for decades, but the Department of Labor’s interpretative opinion is likely to be challenged, and there is some doubt of whether it will be followed by the courts. Analysis On […]

Handel’s Enterprises, Inc. v. Schulenburg: In Spite of a “Willful” Violation of the CFIL, a Federal Court Finds a Franchisee is not Entitled to Rescission

Jan 6, 2020Legal AlertsCalifornia, CFIL

Executive Summary: In a reported decision, Judge Barker of the United States District Court for the Northern District of Ohio found that in order to successfully rescind a franchise agreement under the California Franchise Investment Law a franchisee must prove that the violation was willful and the plaintiff relied on the violation in entering into the contract and that the violation caused damages. Citation: Handel’s […]

Handoush v. Lease Finance Group, LLC: Predispute Waivers put a Forum Selection Clause at Issue Again

Oct 31, 2019Legal AlertsCalifornia, CFIL

Executive Summary: In a reported decision, Judge Wick of the California Court of Appeal, First District, Division 3, found that the forum selection clause in a contract between plaintiff and defendant was invalid based on a predispute jury waiver. Citation: Handoush v. Lease Finance Group, LLC, 41 Cal.App.5th 729 (2019). Relevant Background: On January 21, 2016, Zeaad Handoush (“Plaintiff”) filed suit […]

Governor Signs AB5 into Law and Complicates California’s Independent Contractor Analysis

Sep 12, 2019Legal Alerts, Statute Tracking, Thought LeadershipCalifornia, Employment Law, Independent Contractor

Executive Summary Governor Newsom signs AB5 into law making it effective January 1, 2020. The law does not address many questions for the franchise industry. Franchisors and franchisees should not expect these questions to be resolved until they are before the California Supreme Court, which could be years. Analysis Only a day after the California Assembly voted to send AB5 to this desk for […]

California Assembly Denies Procedural Vote Then Votes To Send AB5 To Governor’s Desk

Sep 11, 2019Statute TrackingCalifornia, Employment Law, Independent Contractor

Executive Summary The California Assembly has voted in concurrence with the Senate Amendments of AB5 and has sent the bill to Governor Newsom’s desk for signature or veto. Governor Newsom has publicly expressed support for the bill. Analysis On September 11, 2019, the California Assembly denied a procedural vote supported by Republicans in the Chamber (16 Ayes, 53 Noes, 10 […]

California Senate Passes AB5

Sep 10, 2019Statute TrackingCalifornia, Employment Law, Independent Contractor

Executive Summary The California Senate passed AB5. The bill now moves to the Assembly for concurrence. Analysis On September 10, 2019, the California Senate passed AB5 as amended on September 6, 2019. Votes for AB5 broke down along partisan lines with 29 ayes, 11 noes, and 0 no votes recorded.The bill will now move back to the California Assembly for […]

AB5 Amendments Incentivize Union Bargaining and Expands Rights of Action

Sep 6, 2019Statute TrackingCalifornia, Employment Law, Independent Contractor, Labor Law

Executive Summary The California Senate has amended AB5 one last time before coming to a floor vote. While several of the amendments are superfluous purpose statements and findings, technical changes that have no objective impact on the law, and small clarifications regarding individuals who were already covered or carved out from the bill (i.e., licensed manicurists), there are two notable […]