WASHINGTON, Oct. 8, 2015 – The International Franchise Association has filed an amicus brief in support of IFA member and founder of a children’s consignment franchise, Rhea Lana Riner, who has been unfairly targeted by the Department of Labor (DOL). The DOL’s action also threatens other, similarly situated businesses.

“The Obama administration has stated that it wants to give everyone a chance at the American dream, but in this case, the Department of Labor has simply decided to label Rhea Lana’s, a small family-owned franchise business, as guilty without so much as a complaint being filed or a judge hearing a case,” said IFA President & CEO Robert Cresanti. “We align with those who believe that America stands for the rule of law and for due process.  Public servants, even regulators, have a duty to administer those fundamental principles faithfully and fairly.” 

Rhea Lana Riner developed a children’s consignment business – Rhea Lana’s – in her hometown of Conway Ark., with the goal of giving moms a place to buy and sell gently loved children’s clothing and toys. Riner’s business idea and organizing software was such a success that it allowed her give other women the chance to run their own businesses organizing consignment sales. Today, her franchise businesses are in 22 states with more than 60 locations and still growing. These franchisees organize sales events and give volunteer consignors a venue for buying and selling their used children’s’ items. In exchange for helping run the shows, the volunteer consigners get early access to the sale and the chance to purchase popular items and sizes.  

However Riner’s business is operating under a cloud of uncertainty. In 2013, the DOL found fault with her business model, despite the fact that not one of her franchisees or volunteers had ever filed a complaint. The DOL sent her a letter arbitrarily asserting that her volunteers are employees under the Fair Labor Standards Act. The DOL even sent letters to all of her volunteers notifying them of their right to sue Rhea Lana’s for back wages, liquidated damages and attorneys’ fees.

If this DOL action stands, Riner and all her franchisees will be forced to pay the volunteer consigners minimum wage, overtime, back wages and possibly additional fines. IFA’s brief argues Riner is a victim of an overly aggressive bureaucracy and at a minimum deserves the right to challenge this overreach in court.

“These actions not only threaten Riner’s business and personal reputation, they also spread a cloud of uncertainty over her franchisees and other similar businesses that follow the same business model. This uncertainty hinders her ability to grow and sell additional franchises and help more communities,” added Cresanti. “IFA will continue to support Riner’s rights as a small business owner and work to protect the franchise business model for all aspiring entrepreneurs.”

Riner filed a lawsuit against the DOL challenging its ruling.  Her case will continue next month when the D.C. Circuit Court hears her appeal. For a full copy of IFA’s amicus brief, click here. 

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About the International Franchise Association

Celebrating 55 years of excellence, education and advocacy, the International Franchise Association is the world’s oldest and largest organization representing franchising worldwide. IFA works through its government relations and public policy, media relations and educational programs to protect, enhance and promote franchising and the more than 780,000 franchise establishments that support nearly 8.9 million direct jobs, $890 billion of economic output for the U.S. economy and 3 percent of the Gross Domestic Product (GDP). IFA members include franchise companies in over 300 different business format categories, individual franchisees and companies that support the industry in marketing, law, technology and business development.

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