In Vazquez v. Jan-Pro Franchising International, Inc., a decade-old proposed class action against a franchisor, the Ninth Circuit ruled on May 2, 2019, that the recent California Supreme Court case Dynamex Ops. W. Inc. v. Superior Court of Los Angeles, 416 P.3d 1 (Cal. 2018) applies retroactively.
Vazquez is a warning for franchises
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Trademark Update: No Standing to Seek Trademark Registration Cancellation
By Sheila Raftery Wiggins
When applying for a registration for a trademark, the applicant must affirmatively state that it knew of nobody else who had the right to use the same or confusingly similar trademark. Failure to do so is a violation of 15 U.S.C. 1120 (Civil Liability for False or Fraudulent Registration) and leaves…
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…
Native Advertising Is blurry, but Disclosures Must Be Clear
By: Sheila Raftery Wiggins
“Native advertising” is an advertisement that may blur the distinction between advertising and editorial, video or other content. For example, an advertisement may be integrated into a newspaper website, with a “headline” and then a few lines of text which looks like a regular story rather than looking like an advertisement.…
Commission, Incentive Pay and Nondiscretionary Bonus Are Impacted by DOL’s New Regs
By: Sheila Raftery Wiggins
The U.S. Department of Labor’s new regulations are effective on Dec. 1, 2016. The new regulations impact exempt employees, federal overtime pay and minimum wage requirements.
Significantly, nondiscretionary bonuses, commissions and incentive payments may be used to satisfy up to 10 percent of the minimum standard salary requirement if these payments…
Texting Advertisements or Employment Offers May Violate TCPA
By: Sheila Raftery Wiggins
Potential drivers filed a class action suit against a well-known ride hailing firm in federal court (N.D. Ill.) alleging that text messages sent to potential drivers violate the Telephone Consumer Protection Act (“TCPA”). A sample text states: “You’re invited to drive [insert name]. No schedule. No boss. Sign up now and…
FCC Seeks Comments on Law Governing Automated Calls to Your Customers
By: Sheila Raftery Wiggins
Companies make automated calls to customers who owe money. These calls are governed by a federal statute, the Telephone Consumer Protection Act (“TCPA”). When a company violates the TCPA, the damages are calculated for each call. That can be costly. Due by June 6, 2016, the FCC seeks comments about changing the scope of the TCPA,…
More States Enact Laws: Franchisors Are Not “Joint Employers”
By: Sheila Raftery Wiggins
Eight states passed legislation prohibiting a franchisor from being considered an employer or co-employer of franchisee employees, including: Texas, Louisiana, Tennessee, Wisconsin, Michigan, Indiana, Utah and Georgia. Similar legislative efforts were introduced in California, Colorado, Massachusetts, Oklahoma, Pennsylvania, Vermont and Virginia.
On May 3, 2016, Georgia is the most recent state…
E-commerce: Clickwrap Versus Browsewrap Agreement
By: Sheila Raftery Wiggins
The goal of an e-commerce contract is whether the “reasonable” consumer is aware of the e-commerce contract terms. A browsewrap agreement uses hyperlinks to the contract terms and conditions. A clickwrap agreement requires users to scroll through the terms before they are required to agree to them. The California state appeals court recently held that…
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
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