Jani-King is a commercial cleaning and janitorial services franchise used by offices, hotels, restaurants, stadiums, universities, and other commercial settings. Two custodians who had been working as franchisees in Philadelphia claim that they were wrongly classified as independent contractors when they should have been considered employees of the company. As a result, they have obtained legal counsel to pursue a class action case with approximately 300 other franchisees against Jani-King.
According to legal counsel, the cleaning company uses the franchising tactic as a way to attract potential employees, many of whom are immigrant workers, to take jobs as franchisees. The Massachusetts courts ruled that the current franchise arrangement is unlawful. However, a federal district court in California denied class action status to the janitors who were suing Jani-King for employee status.
In response to a court ruling that said that documents that establish “franchise system controls” are evidence that the janitors can use to certify their class action, Stephen Hagedorn, general counsel for Jani-King, said the ruling could encourage other franchisees to pursue class actions against the franchisor. Ultimately, according to Hagedorn, he is confident that Jani-King will prevail.
In order for a franchise to operate, they must abide by the “franchise system controls” required by the Lanham Act. If those controls can be used as evidence of an employee relationship, more franchisees are likely to pursue employee status in class actions.
While the court did not rule on the franchisees’ employee status, it did say that the lawsuit could proceed as a class action case, as the janitors’ misclassification claims could be established through evidence like the Jani-King franchise agreement and manuals.
Jani-King’s Questionable Record
For close to two decades, the Federal Trade Commission has been warning consumers against purchasing janitorial franchises, like those offered by Jani-King. In 1995 Jani-King paid $100,000 to settle FTC charges about a complaint stating that Jani-King did not provide prospective franchisees with information about earnings claims, the company’s litigation history, and disclosure of its other franchisees. By settling the case with the FTC, Jani-King did not admit or deny wrongdoing.
According to Liss-Riordan, the majority of the janitorial franchise companies in Massachusetts have made changes to the way they operate their franchise operations. For example, most companies no longer charge steep upfront franchise fees, which pose as a financial hardship for many new franchise owners.
Cherry Hill Employment Lawyers at McOmber McOmber & Luber, P.C. Help Employees With Wage and Hour Claims
If your employee status has compromised your earning potential, or has negatively affected your employment, you are urged to contact the Cherry Hill employment Lawyers at McOmber McOmber & Luber, P.C. as soon as possible. We will thoroughly investigate your claim and provide the dedicated, compassionate legal counsel you need to reach the best possible outcome. To schedule a confidential consultation, call our Red Bank, New Jersey offices at 732-842-6500 or our Marlton, New Jersey offices at 856-985-9800, or contact us online.