Posts Tagged agreement

Franchisor Liability As a Joint-Employer

Franchisors have a valid interest in protecting the brand they have worked hard to create. they accomplish this by requiring uniformity from their franchisees and exercising control over certain aspects of their franchisees’ operations. This includes control over the location and look of their franchisees’ places of business, the products and services offered by their franchisees and how intellectual property is utilized and protected by their franchisees. Franchisors also exercise control over their franchisees’ “employees by dictating minimum employment standards, the type of training that is required for employees and the clothing or uniforms employees must wear. Unfortunately, this control over their franchisees’ employees can sometimes create liability for franchisors when employees sue the franchisees for violations of Title VII, the Fair Labor Standards Act or other labor laws. It is becoming increasingly common that employees are also suing the franchisor claiming the franchisor is liable because they acted as a joint-employer based upon the amount of control they exercised over their franchisees’ employees. This joint-employer claim creates a second, deep pocket for them to pursue. Background of Joint-Employer Liability The current standard for determining whether an individual or entity is a joint-employer was set forth in the National Labor Relations Board (the “NLRB”)’s 2015 decision in the Browning-Ferris Industries matter. Specifically, the NLRB held the primary inquiry for determining joint-employer status is whether the purported joint-employer possesses the actual or potential authority to exercise control over the primary employer’s employees, regardless of whether the control is in fact ever exercised. In December 2017, the NLRB established a more employer-friendly standard in the Hy-Brand Industrial Contractors, Ltd. matter that required the purported joint-employer to actually exercise joint control over essential employment terms, rather than just reserving the right to exercise such control. This control had to be “direct and immediate”


Waning Support for Non-Compete Agreements in Florida?

The State of Florida has been a longstanding proponent of noncompete agreements. In 1996 the Florida legislature enacted the current non-compete statute, 542.335 Florida Statutes, which governs all noncompete agreements entered into after July 1, 1996. Due to some of the extreme provisions in this statute, Florida is considered to be one of the most “employer-friendly” states in the country. Florida’s statute expressly provides that noncompete agreements will be enforced as long as “such contracts are reasonable in time, area, and line of business,” and the employer is able to prove “the existence of one or more legitimate business interests justifying the restrictive covenant” and the “contractually specified restraint is reasonably necessary to protect the legitimate interest.” While these provisions are common and reasonable, the statute also includes more extreme provisions that are, without question, designed to protect employers. Specifically, the statute precludes a court from considering any “individualized economic hardship that might be caused to the person against whom enforcement is sought.” Additionally, the statute precludes any contract provision that “requires the court to construe a restrictive covenant narrowly, against the restraint or the drafter of the contract.” Criticism of Florida’s Noncompete Statute by Other States While Florida is considered to be very “employer-friendly,” other states such as California, Illinois and New York are on the other side of the spectrum and are considered to be very “pro-employee.” In fact, noncompete agreements are actually precluded in California except when they are executed in connection with the sale of a business. Courts in these states, as well as Alabama and Georgia, have been especially critical of the more extreme provisions in Florida’s noncompete statute. Courts in these states have gone as far as refusing to enforce choice of law provisions in employment contracts that require the application of Florida law