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

Mealey's Franchise

January 31, 2022
Editor’s Note

The journalists and staff of Mealey’s Litigation Reports are saddened by the passing of co-founder Michael P. Mealey. He was a respected member of the newsletter community, being named publisher of the year by the National Newsletter Association and president of the National Newsletter Association. Mike and Judy Mealey started Mealey Publications Inc. in 1984. As president, Mike grew the Mealey’s Litigation Report portfolio, introduced email news bulletins and electronic CD formats and launched a continuing legal education conference business. Mealey’s was sold to LexisNexis in 2000. We hope to carry on his journalistic curiosity and integrity in the titles we continue to publish today under his name.
January 27, 2022
Insureds Ask 4th Circuit To Reverse Ruling Of No Physical Loss From COVID Shutdowns

RICHMOND, Va. — A group of Anytime Fitness franchise owners appealing from a Virginia federal district court’s dismissal of their first amended class action complaint seeking coverage for the negative impact on their business caused by government shutdown orders issued in response to the coronavirus pandemic told the Fourth Circuit U.S. Court of Appeals in their Jan. 10 opening brief that the district court misinterpreted both the provisions of the insurance policy and the applicable law.
January 25, 2022
Panel: Jurisdiction Lacking Over Stay Issued In Trademark Dispute

ST. LOUIS — The Eighth Circuit U.S. Court of Appeals on Jan. 7 refused to weigh in on the merits of a Missouri judge’s stay of federal trademark infringement allegations by a window franchisor because the stay is neither a final order nor an appealable collateral interlocutory order.
January 25, 2022
$2 Million Wage Statements Settlement By McDonald’s Operator Preliminarily Approved

FRESNO, Calif. — Just over a week after declining to preliminarily approve a $2 million wage statements class and Private Attorneys General Act (PAGA) settlement by the operator of McDonald’s in California, a federal magistrate judge in California on Jan. 20 granted preliminary approval after the agreement and proposed class notice were revised, but noted concerns with the requested attorney fees.
January 25, 2022
Franchise Groups’ Suit Challenging Calif. Independent Contractor Test Dismissed

SAN DIEGO — A federal judge in California on Jan. 12 dismissed a lawsuit by franchise interest groups and associations challenging the constitutionality of the state’s “ABC Test” to determine whether a worker is an employee or independent contractor, finding that the action was not ripe under Article III of the U.S. Constitution and that the constitutional claims fail on prudential ripeness grounds.
January 21, 2022
Car Dealers Will Settle Claims They Fired A Worker After Cancer Diagnosis

SACRAMENTO, Calif. — A consent decree between two national car dealers and the Equal Employment Opportunity Commission under which the dealers will pay $150,000 and hire a consultant to facilitate changes to their policies and training practices to settle a disability discrimination lawsuit was approved Jan. 19 by a federal judge in California.
January 21, 2022
Domino’s Seeks Rehearing After Arbitration Denied In Truck Drivers Expenses Suit

PASADENA, Calif. — A Ninth Circuit U.S. Court of Appeals ruling affirming a trial court’s order denying Domino’s Pizza LLC’s motion to compel arbitration in a putative class complaint by truck drivers asserting violations of California’s labor and unfair competition laws conflicts with Ninth Circuit and U.S. Supreme Court precedent, Domino’s argues in a Jan. 20 petition for rehearing or rehearing en banc.
January 20, 2022
$2 Million Wage Statements Settlement By McDonald’s Operator Denied Approval

FRESNO, Calif. — A federal magistrate judge in California on Jan. 12 denied preliminary approval of a $2 million class and Private Attorneys General Act (PAGA) settlement by the operator of McDonald’s in California, finding issues in the agreement and proposed notice.
January 19, 2022
Judge: Employment Related Practices Exclusion Bars Coverage For BIPA Violation Suit

CHICAGO — A federal judge in Illinois on Jan. 7 granted a businessowners insurer’s motion for summary judgment in its lawsuit disputing coverage for underlying claims that its insured violated the Biometric Information Privacy Act (BIPA), finding that the policy’s “employment related practices” (ERP) exclusion precluded coverage.
January 13, 2022
McDonald’s Franchisee Found To Have Violated NLRA By Failing To Recall Workers

WASHINGTON, D.C. — A McDonald’s franchisee violated the National Labor Relations Act (NLRA) when it recalled or rehired employees who had been laid off due to the impact of the coronavirus pandemic except for four workers who participated in a union organizing campaign in 2019, a National Labor Relations Board administrative law judge (ALJ) ruled Dec. 30.
January 07, 2022
Employee, Amicus To High Court: Reverse 8th Circuit Arbitration Waiver Ruling

WASHINGTON, D.C. — American Association for Justice filed an amicus brief in the U.S. Supreme Court on Jan. 5 supporting arguments by the employee of a Taco Bell franchisee who tells the high court in her Dec. 30 petitioner brief that her employer forfeited its right to arbitration after waiting to file its motion in her wage-and-hour case until after failed settlement talks and that the ruling by the Eighth Circuit U.S. Court of Appeals panel majority must be reversed.
January 06, 2022
Hotel Franchisor, Franchisee To Turn Over Guest List In Carbon Monoxide Class Suit

DENVER — A federal magistrate judge in Colorado on Jan. 3 directed the defendants in a lawsuit over an alleged carbon monoxide poisoning incident at a Boulder, Colo., hotel to turn over the list of guests during a weeklong period to three guests who filed a putative class complaint, rejecting the arguments by the franchisor, franchisee and other defendants that the guests’ privacy rights would be violated and that plaintiffs’ counsel may misuse the information.
January 05, 2022
Class Certification Granted In Harassment Suit Against McDonald’s Franchisee

DETROIT — A federal judge in Michigan on Dec. 29 certified a class of female workers who sued a McDonald’s franchisee alleging that they were repeatedly physically and verbally harassed by a manager.
January 05, 2022
Rehearing Request Time Extended After Arbitration Denial In Domino Drivers’ Suit

PASADENA, Calif. — A request by a pizza franchisor for a 14-day extension to file a petition for rehearing was granted Jan. 3 by the Ninth Circuit U.S. Court of Appeals, less than two weeks after the panel affirmed a trial court’s order denying the franchisor’s motion to compel arbitration in a putative class complaint by truck drivers asserting violations of California’s labor laws.
December 15, 2021
Subway: Amended Class Claims Over Tuna Content Are Unsupported

OAKLAND, Calif. — A sandwich franchisor accused in a putative class complaint of violating 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 and “encouraging mixing or allowing non-tuna ingredients to make their way into the Tuna Products” moved Dec. 8 for dismissal of the second amended complaint, arguing that the complaint fails to show any false or misleading representations or damage to the consumers.
December 14, 2021
EEOC Accuses McDonald’s Franchise Of Failing To Hire Black Applicants

MILWAUKEE — The Equal Employment Opportunity Commission filed a complaint on Dec. 13 in a Wisconsin federal court accusing the operator of nine McDonald’s locations of violating federal law by failing to hire a class of Black applicants at its Milwaukee location.
December 14, 2021
Black McDonald’s Franchisees Dismiss Bias, Fraud Claims Against Franchisor

CHICAGO — A federal judge in Illinois on Dec. 13 terminated a putative class complaint accusing a fast food franchisor of steering Black franchisees to Black communities where white franchisees refused to operate restaurants due to higher overhead costs and employee turnover after both sides in the case filed a joint stipulation of dismissal with prejudice on Dec. 10.
December 14, 2021
10th Circuit Affirms Franchisor Owed No Duty To Advise Franchisee’s Employee

DENVER — A franchisor has no duty under Oklahoma law to protect a franchisee’s employee by advising her how to address her allegation that the franchisee sexually harassed her, the 10th Circuit U.S. Court of Appeals ruled Dec. 8 in an unpublished order, affirming the dismissal of a negligent misrepresentation claim against the franchisor.
December 14, 2021
On Heels Of Trial Win, Liquor Wholesaler Seeks $3.4M In Attorney Fees

ST. LOUIS — In a Dec. 7 filing in Missouri federal court, a plaintiff who was recently awarded $11.75 million by jurors on its allegation that Mast-Jägermeister US Inc. (Jägermeister) violated Missouri franchise law when it terminated a distribution agreement without good cause moved for an award of $3.4 million in attorney fees, arguing that “there can be no dispute” that it is the prevailing party in the case.
December 14, 2021
Franchisor Wins Dismissal In Dispute Over Sales Of Sick Animals

CHARLESTON, S.C. — A nationwide pet store franchisor won dismissal on Dec. 6 of allegations that it enticed consumers into purchasing unhealthy pets when a federal judge in South Carolina found, among other things, that a requirement that franchisees retain the services of a local veterinarian for regular dog and cat examinations is not akin to a guarantee of animal health.
December 14, 2021
Panel: Jurisdiction Over State Law Claims Lacking In Franchise Row

ATLANTA — Just over four months after a Florida federal judge, acting in response to a limited remand by the 11th Circuit U.S. Court of Appeals, said it lacks subject matter jurisdiction over state law claims by an association of Tim Hortons franchises, the appellate court on Dec. 1 vacated and remanded the price-gouging dispute with instructions for a dismissal without prejudice.
December 13, 2021
High Court Won’t Decide Whether Dealers Are Entitled To Compensation After Bailout

WASHINGTON, D.C. — The U.S. Supreme Court on Dec. 13 declined to review the Federal Circuit U.S. Court of Appeals ruling that former Chrysler dealership franchisees failed to prove that their franchise agreements would have had a positive value but for the conditions the federal government imposed on a $4 billion bridge loan to the bankrupt automaker that required rejecting their franchise agreements.
December 10, 2021
9th Circuit: Volkswagen Salespersons’ Class Labor, Unfair Competition Claims Fail

SAN FRANCISCO — Salespeople at franchised dealerships who claimed that their business was harmed by Volkswagen’s emissions scandal failed to adequately allege that the car maker was their joint employer, the Ninth Circuit U.S. Court of Appeals affirmed Dec. 6 in an unpublished opinion.
December 10, 2021
Arbitration Award Against Russian Franchisee Is Vacated By New York Federal Judge

NEW YORK — A federal judge in New York on Dec. 8 vacated an arbitration award concerning the control of franchisee sandwich shops in Russia, concluding that the arbitrator purported to render a decision on a claim that was reserved for trial.
December 09, 2021
Summary Judgment For McDonald’s But Not Franchisee In Harassment Class Suit

DETROIT — A federal judge in Michigan on Dec. 6 issued two opinions granting summary judgment to a fast food franchisor but largely denying a partially motion for summary judgment by the franchisee in a putative class complaint by female former employees who allege that they were repeatedly physically and verbally harassed by a manager.