How has franchise litigation changed in recent years?
Washington D.C. litigator Eric Yaffe discusses how franchise litigation has changed recently.
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Well, franchise litigation changes as the issues that franchisees and their lawyers raise change, to some extent. So in recent years we’ve seen a lot of controversy over, for example, joint employer, employee issues, and whether a franchisor can be held liable for the decisions that the franchisees are making in connection with their employees. We’ve also seen wage and hour issues become much more prevalent: overtime payments or lack thereof to employees by franchisees, giving them breaks or not as the law might require. And, again, this leads into the vicarious liability realm, but as a general rule, of course, we believe franchisors should not be held liable for anything that the franchisee is doing unless the franchisor is really controlling that issue themselves. So we’ve seen a movement in that whole employment context over the last several years.
Also, with the advent of social media, we’re seeing some new developments in franchise law. For example, we’re seeing more consumer type actions and even class actions being brought against franchisors and franchisees for privacy type violations, the use of email addresses inappropriately, and there have been some statutes and laws, protective laws, for consumers that have arisen that has led to additional litigation against franchisors and franchisees. So we expect to see more of that in the social media age, that there are issues of false advertising, web-related issues that have arisen that of course we hadn’t seen previously.