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7-Eleven Litigation Could Have Damaging Effects on Franchisee Laws, State Economy

December 10, 2021

On Wednesday, the Supreme Judicial Court of Massachusetts heard oral arguments in an ongoing case which could have lasting effects on the future of franchises in the Bay State. The case, Patel v. 7-Eleven, was brought by franchisees of 7-Eleven alleging that, under Massachusetts law, they are employees of 7-Eleven rather than owners of their own individual franchise. The franchise owners allege that the provisions of their franchise agreement with 7-Eleven mean that they function as store managers, not business owners. 

 

The franchisees allege they are employees based on the degree of control 7-Eleven exercises over them, including requirements to keep their franchises open 24 hours a day and stock their shelves with certain products. In determining whether one is an employee or independent contractor, Massachusetts relies on what is known as the “ABC” test. Ultimately, the difference between the two boils down to one simple question: does the corporation have the right to control the individual’s work? If yes, they are typically an employee. If not, they are almost always an independent contractor.

 

A ruling in favor of the franchisees could have devastating affects not only on the future of franchises in the Commonwealth, but on the well-being of the state’s economy. Currently, there are 159 7-Eleven stores in Massachusetts. Franchises, such as Dunkin Donuts, Burger King, and McDonald’s to name a few, account for a total economic output of $12 billion. These corporations, and many other franchises, may leave the state if forced to treat franchisees as employees. If classified as such, the parent corporation would be required to pay them [franchisees] sick time, unemployment insurance, and offer sick leave. In addition, it would be illegal for franchisees to pay franchise fees out of their wages. As of now, franchisees operate as independent businesspeople and are accountable for payroll and other employer-related costs.

 

If you have questions about employment law, or any other general employment issues, please do not hesitate to contact the attorneys at The Royal Law Firm at 413-586-2288.

Massachusetts’ Superior Court Judge Rules Recording in Workplace Admissible

February 19, 2025
The Massachusetts Superior Court found that Massachusetts’ wiretap statue does not bar employers from using allegedly illegally obtained recordings in civil proceedings. In a recent case, an employee claimed she was forced to resign. Plaintiff’s coworker recorded an argument between the Plaintiff and her supervisor without her consent and shared it with supervisors. The employee then sued for discrimination and retaliation, along with two counts for violation of the wiretap statute. Massachusetts is a two-party consent state but, in this case, it was found that the consent of only one party was needed because nothing in the Wiretap Statute bars the use of an allegedly illegally obtained communication in a civil proceeding. The court found that the provisions about the use of illegally obtained communications in evidence are limited to criminal trials. However, depending on the court, results may differ, as this recording was central to proving and/or disproving the Plaintiff’s claim, and as such, the recording was indispensable as a piece of evidence. Issues with unauthorized recordings have been arising all the time in civil proceedings because recording devices are everywhere, whether they be a cell phone, laptop or other recording device. This ruling is good for employers, as if there is an otherwise inadmissible recording that is made that disproves an employee’s claims, it can be admissible as evidence if meets the same scenario above. However, employers must be careful to use these recordings as they may be inadmissible and may not show the same thing that the employer believes in the court’s eyes. This being said, it is prudent to consult an attorney before utilizing a recording for any employment action or in legal action to avoid unwanted consequences. If your business has any questions on this topic or any other matters, please do not hesitate to contact the attorneys at The Royal Law Firm at 413-586-2288.

After the DEI Executive Order

February 14, 2025
What Are the Compliance Requirements for Private Employers?
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