A franchise relationship is not a defense against independent contractor misclassification claims, according to a ruling earlier this month by a California court, JD Supra reported [1].
In Roman v. Jan-Pro Franchising International Inc., janitors classified as independent contractors sued their franchisor, Jan-Pro Franchising International, for misclassification.
To be correctly classified as independent contractors, all three parts of California’s ABC worker classification test as codified in AB 5 must be met:
- A. The worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact; and
B. The worker performs work that is outside the usual course of the hiring entity’s business; and
C. The worker is customarily engaged in an independently established trade, occupation or business of the same nature as that involved in the work performed.
Jan-Pro’s defense hinged on point B, arguing that it was not in the janitorial business but in the business of selling franchises. However, the court noted the company advertised itself as a janitorial service and that “unit franchisees remained at all times necessary to defendant’s business.” Read the full story on JD Supra [1].