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Before committing to a franchise business, consider...
A recent Texas Supreme Court decision fully overturned a jury’s finding that a franchisor was liable for the criminal actions of a franchisee’s employee. This decision underscores the importance of a franchisor having clearly...more
On May 2, 2025, the Texas Supreme Court reversed a Texas Court of Appeals’ decision that had affirmed a jury’s verdict finding a franchisor directly liable to the customer of a franchisee for actions undertaken by the...more
On April 23, 2024, the Federal Trade Commission (FTC) voted to issue a Non-Compete Clause Rule that would ban most non-compete clauses in agreements between businesses and their “workers.” The final rule will take effect 120...more
On April 23, 2034, the Federal Trade Commission (FTC) issued a final rule intended to ban the use and enforcement of most non-compete clauses signed by workers. The new rule is not in effect yet. It will become...more
In Deslandes v. McDonald’s USA LLC, issued August 25, 2023, the U.S. Court of Appeals for the Seventh Circuit overturned the dismissal of antitrust claims that challenged no-poach clauses in franchise agreements....more
A federal court in Maine granted a franchisor’s motion to dismiss claims asserting that a franchisor was liable for its franchisee’s alleged age discrimination in employment. Goodwill v. Anywhere Real Est., 2023 WL 4034372...more
Arrington v. Burger King Worldwide, Inc., No. 20-13561 (11th Cir. Aug. 31, 2022) – In October 2018, a former line cook of a Burger King franchise restaurant in Illinois, filed a class action complaint in the District Court...more
Over the last several years, business-to-business “no-hire” and “no-poach” agreements have come under legal attack, including through enforcement actions by the Federal Trade Commission and criminal prosecutions by the...more
A federal judge in the U.S. District Court for the Northern District of Illinois has held that an antitrust challenge to a “hiring restriction [that] prevented” plaintiff employees “from taking a better-paying position with a...more
California Supreme Court Applies Independent Contractor Standard Retroactively; Does Not Reach Applicability to Franchises - The California Supreme Court has held that its Dynamex decision applies retroactively, answering...more
Welcome to The Franchise Memorandum by Lathrop GPM, formerly known as The GPMemorandum. Since December 1997, The GPMemorandum has been presenting summaries of recent legal developments of interest to franchisors and companies...more
A recent Supreme Court of Canada (SCC) decision considered whether a franchisee who entered into a franchise agreement with a franchisor was an employee or an independent contractor. The fact-specific case, Modern Cleaning...more
Yesterday, Washington’s Governor, Jay Inslee signed HB1450 [PDF] which targets the use of restrictive covenants in the State of Washington (the “Non-Compete Act”). The signing of the Non-Compete Act follows the recent...more
No poaching agreements among employers continue to make antitrust news, and employers and their HR professionals need to take note. Whether or not a particular agreement has a valid purpose (such as protecting an employer’s...more
In order to avoid a lawsuit by the Washington State Attorney General, seven fast-food chains with store locations nationwide agreed to no longer enforce “no-poach/no-hire” provisions in their franchise agreements and to...more
We reported last week that the attorneys generals of ten states are investigating several fast food franchisors for their use of so-called “no poach” provisions in their franchise agreements. ...more
The Attorneys General of ten states are investigating fast food franchisors for their alleged use of “no poach” provisions in their franchise agreements, according to a press release by the New Jersey Attorney General’s...more
Franchise agreements often contain provisions prohibiting the franchisee from soliciting or hiring workers employed by the franchisor or other franchisees. Such “anti-poaching” agreements have recently come under increased...more
The fight against joint employment of franchisors and franchisees took a small hit when the Western District of Pennsylvania (“Court”) chose to allow a franchisee’s employee’s suit to proceed. In Harris v. Midas, et. al., the...more
Agreements among companies to not hire each other’s workers are more risky than ever. The DOJ’s Assistant Attorney General for the Antitrust Division, Makan Delrahim, stated on January 19 that the division has criminal cases...more
The past month’s judicial and administrative activity in the area of IC misclassification reflects the wide range of industries facing these types of claims: communications; cleaning services; transportation and delivery...more
The National Labor Relations Board (“NLRB”) on August 27, 2015, issued a sweeping decision that overturned decades of precedent and created a new standard for determining when two (or more) entities are “joint employers” for...more
Any time an employer is involved in a franchise relationship, there are bound to be unique issues when legal disputes arise, particularly in the employment context. It is no longer surprising to see the names of any and all...more
JANITORIAL FRANCHISE COMPANY SETTLES ITS APPEAL OF $4.8 MILLION JUDGMENT IN FAVOR OF MISCLASSIFIED CUSTODIANS. Coverall North America Inc. settled the independent contractor misclassification case filed against it by a class...more
The concept of joint-employer liability is popping up in the news a lot again. This is because the NLRB is taking a more aggressive view on joint-employer standards under the National Labor Relations Act, particularly as to...more