Attorneys Run Down Most Interesting Cases of 2018
Quentin Wittrock and two of his compatriots at Gray Plant Mooty outlined their picks for the most interesting developments in franchise law in 2018.
Anti-poaching clauses topped the list (or at least kicked off the webinar) of the most interesting developments in franchise law in 2018, as presented by three Gray Plant Mooty attorneys this week.
Also called no-hire or no-solicitation, those commonly used clauses prevent one franchisee from soliciting or hiring the employees of another franchisee in the same brand.
Following an investigation by the Washington state attorney general, at least 34 brands have signed “assurances of discontinuation”of such clauses and agreed to remove the clauses from franchise agreements, according to presenters Quentin Wittrock, Maisa Jean Frank and Julia Colarusso.
Jersey Mike’s refused to enter into such an agreement and has been sued by the attorney general in King County Superior Court, they said.
The investigation started with fast-food restaurants but has now moved to other industries, including fitness centers, car repair services, salons, insurance adjustor services and many others.
Three class-actions filed by franchisee employees have moved past the motion-to-dismiss phase, involving McDonald’s, Jimmy John’s and Cinnabon, and there are at least 10 pending class-action cases to watch.
The attorneys went on to discuss a long list of joint employer developments at the National Labor Relations Board and in the court system, as well as a few cases about vicarious liability and misclassification. Arbitration and distribution cases, too, were given the once over.
A final case, Lokhandwala v. KFC Corp., received the distinction of “perhaps the most interesting miscellaneous case”of the year. A franchisee claimed KFC breached the franchise agreement by demanding that he stop marketing his chicken as halal (that is, prepared in accordance with Islamic laws and customs) after previously allowing such marketing. The court rejected the franchisee’s claims.
Expect to see much more activity on these hot topics in the coming year, the attorneys said.