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Joint Employer Attacks Continue to Threaten Franchise Model
This summer, the franchising community scored a victory in the continuing joint employer battle when the Department of Labor rolled back its Obama-era guidance creating employer liability for workplace violations if the employer exercised indirect control over the workplace. As we celebrate the victory of the return of the DOL’s “direct control” standard, we should remain only cautiously optimistic in the wake of several recent federal court decisions highlighting the continued joint employer threats to the franchise model.
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Obligations to Perform in Good Faith Do Not Override Express Terms
Claims for breach of the obligation to perform in good faith, whether express or implied, continue to be popular among franchisees who choose to litigate their disputes. However, when the franchise agreements are drafted to address the key issues that are in dispute, these claims fail as courts continue to reject arguments that the obligation of good faith overrides the franchise agreement’s clearly defined, express terms. Two U.S. Court of Appeals cases from this summer illustrate how franchisors were able to overcome these claims, and how enterprising franchisors might even further improve their odds in the future.
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Spotlight: Ed Driscoll
In 1971, Governor Wendell Anderson appointed Edward J. Driscoll as Minnesota’s Commissioner of Securities and Chairman of the Minnesota Commerce Commission, where he was responsible for the regulation of financial service industries, including insurance, state chartered banks, securities, and real estate. As Commissioner, Ed called for hearings on franchising in Minnesota, and was responsible for drafting the Minnesota Franchises Act – the law that governs franchising in Minnesota today. Recently retired after a 40 year career with Larkin Hoffman, Ed’s career was defined by leadership in both the public sector and private practice.
Alert: Employers Must Use Revised Form I-9 by Next Week
On July 17, 2017, the U.S. Citizenship and Immigration Services issued a new Form I-9, Employment Eligibility Verification, dated 07/17/17 N. This revised form must be adopted and used for new hires, re-verification of employment eligibility, and rehires as of September 18, 2017 – next week. The Handbook for Employers: Guidance for Completing Form I-9 (M-274) was also revised to reflect the revisions. Printable and electronic versions of the Form I-9 as well as the instructions and employer handbook are available on-line at www.uscis.gov/i-9-central.
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News & Press
Chuck Modell was selected by Best Lawyers® as the Minneapolis franchise law “Lawyer of the Year” for 2018, a recognition given to a single attorney in each practice area within a designated metropolitan area. Lawyers receiving this honor are selected based on particularly impressive voting averages received during the peer-review assessments. Chuck was previously selected in 2014, along with Joe Fittante in 2016, making a Larkin Hoffman attorney the recipient of the recognition for three of the last five years.
Chuck and Joe, as well as Jim Susag and Susan Tegt were named as 2018 Best Lawyers® in the area of Franchise Law. Best Lawyers® is the world’s most selective and highly-regarded directory of attorneys, and inclusion is based on an exhaustive and rigorous peer-review process comprised of evaluations by top attorneys.
The same cast was also selected to the 2017 Minnesota Super Lawyers list, with Chuck Modell, Joe Fittante, and Jim Susag, being recognized as Super Lawyers, and Susan Tegt and Henry Pfutzenreuter as a Rising Stars, all in the area of franchise/dealership. Super Lawyers annually rates outstanding lawyers in many practice areas based on peer recognition and professional achievement. Only a small percentage of practitioners in Minnesota are selected each year.
Events
Chuck Modell will be presenting the “Regulatory Update” workshop and Joe Fittante will be presenting the “Fundamentals of Franchising” intensive at the upcoming American Bar Association Forum on Franchising, in Palm Desert, California, from October 18–20, 2017. Jim Susag, Susan Tegt, Henry Pfutzenreuter, and Sawan Patel will also be attending the Forum.
Larkin Hoffman will host its annual Women’s Networking Event on October 25, 2017 from 5:30 to 8:30 p.m. at the Minneapolis Institute of Arts. The event will include a private viewing of Mia’s newest exhibit, Eyewitness Views: Making History in 18th Century Europe. If you are interested in attending this event, please contact Bobbie Wicklow to RSVP. In addition, if you are interested in learning more about the event, or would like to be involved next year, you may contact Susan Tegt, the chair of the organizing committee, for more information.
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In the Community
Gala for the Benefit of Bridging
Larkin Hoffman will be a sponsor of the Gala for the Benefit of Bridging, held at the Hilton Minneapolis on October 13, 2015. Last year, the gala raised over $300,000 for Bridging, Inc., the largest non-profit furniture bank in the United States. Serving the greater Twin Cities area, Bridging provides quality, donated furniture and household items to people transitioning out of homelessness, poverty, and other difficult circumstances. Dan Ballintine, a shareholder in Larkin Hoffman's Employment Law Practice Group, serves as a member of Bridging's board and Executive Committee.
American Cancer Society Relay for Life
Larkin Hoffman was a sponsor of the American Cancer Society Relay for Life which occurred on June 24, 2017. This event raises awareness and financial support in the battle against cancer. The firm has sponsored and participated in the Relay for Life for 22 years. In addition to the firm’s financial sponsorship and contribution, many attorneys and employees contribute money and time participating in the Relay.
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Summer 2017 Issue
Our Professionals
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Charles Modell, CFE
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Joseph Fittante, Jr.
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Mark Robertson
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James Susag
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Andrew Perrin, CFE
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William Thornton
Susan Tegt
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Sawan Patel
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Inga Schuchard
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Bryan Huntington
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Henry Pfutzenreuter, editor
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Jill Henson
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Jan Jahn
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