Court Watch

In the most recent decision in a long-running battle between a group of janitorial franchise owners and their franchisor, the Massachusetts Supreme Judicial Court, in response to questions certified to it by the U.S. District Court for the District of Massachusetts, decided several issues arising from an earlier finding that the “franchisees” were, in fact, “employees” under the Massachusetts Wage Act, G.L. c.149, Sec.148 et seq. In Awuah et al. v. Coverall North America, Inc., Bus. Fran. Guide (CCH) '14,349 (U.S.D.C., D. Mass, March 23, 2010), the U.S. District Court decided that while the franchise agreement at issue cast the franchisees as independent contractors, the degree of control maintained by the franchisor, the nature of the services performed by the franchisees and the interdependence of the parties, among other things, caused the parties to have an employer-employee relationship rather than that of a traditional franchisor and franchisee. In an earlier case, the Massachusetts Supreme Judicial Court had held that different Coverall franchisees were employees for unemployment law purposes. Coverall North America, Inc. v. Commissioner of the Division of Unemployment Assistance, 447 Mass. 852, Bus. Fran. Guide (CCH) '13,491 (Dec. 12, 2006). See discussion in Klaus, Swierzewski and Winkelman, “Court Watch” LJN's Franchising Business & Law Alert, Vol. 13, No. 5, Feb. 2007, p. 5 et seq.