BB&K In the News Jul 11, 2017

Joint Amicus Brief Filed to Protect Franchise Business Model

BB&K’s Thomas O’Connell Counsel of Record

Joint Amicus Brief Filed to Protect Franchise Business Model

Best Best & Krieger LLP attorneys Thomas O’Connell, as counsel of record, and Roger Crawford recently submitted an amicus curiae brief to the U.S. Supreme Court on behalf of the International Franchise Association, American Hotel & Lodging Association, Asian American Hotel Owners Association, Coalition of Franchisee Associations, and Restaurant Law Center.  In the amicus, these franchise-related groups argued that the Fourth Circuit’s decision in DirecTV LLC and DirectSat USA, LLC v. Marlon Hall, et al. and its companion case Salinas v. Commercial Interiors, Inc. to make entities that are “not completely disassociated” from another employer liable for that other employer’s FLSA violations is a vast overreach by the court. The decision adds to a clear and developed conflict among the circuits and federal agencies about joint-employer liability and may result in an adverse domino effect on the entire franchise system.  As stated in a related news release by the IFA, “…[T]his new joint-employer standard makes it difficult for the franchise business model to continue in the form that has been successful for decades.”
Representing more than 733,000 franchise establishments in the United States that employ more than 7.6 million people and have an economic output in excess of $674.3 billion—approximately 2.5 percent of the nation’s gross domestic product—these franchise groups are requesting that the Supreme Court grant DirecTV’s petition and resolve the growing conflict among the circuits and federal agencies by adopting a common law agency joint-employer standard that would not only be applicable to FLSA claims, but could serve as guidance to every court that is confronted with a joint-employer allegation under any statute or regulation.
A copy of the brief can be seen here.

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