What You Need to Know

• The plaintiffs allege that 7-Eleven misclassifies its franchisees as independent contractors instead of employees in violation of the Massachusetts Independent Contractor Law.
• The U.S. Court of Appeals for the First Circuit asked the Massachusetts Supreme Judicial Court to consider the certified question.
• While the SJC remanded the case to the district court to determine if the plaintiffs were actually employees of 7-Eleven, the court rejected 7-Eleven's claims, holding the independent contractor statute and franchise rule do not conflict with one another.

Employment attorneys are preparing for a potential influx of misclassification litigation following the Massachusetts Supreme Judicial Court’s ruling last month that the so-called “ABC test” in the independent contractor statute applies to the franchisee-franchisor relationship.

In Dhananjay Patel v. 7-Eleven, a group of plaintiffs entered into a franchise agreement with 7-Eleven as independent contractors who would operate the branded convenience stores “around the clock, stock inventory sold by 7-Eleven’s preferred vendors, utilize the 7-Eleven payroll system to pay store staff, and adhere to a host of other guidelines,” the court’s opinion said.

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Read Full Story: https://www.law.com/2022/04/12/application-of-abc-test-to-franchise-relations...