(WASHINGTON, D.C., JUNE 11) – The International Franchise Association (IFA) last night filed an amicus brief requesting a rehearing or rehearing en banc in the Vazquez v. Jan-Pro Franchising International, Inc. case, currently before the 9th Circuit.
In the amicus brief, IFA argues that retroactively applying the “ABC” test creates a conflict between Dynamex and federal and state statutes, misinterprets and disregards the California Supreme Court’s decision in Patterson v. Domino’s Pizza, LLC., ignores the fundamental attributes of the franchise business model, and threatens the very existence of franchising in California.
“California businesses suffer from high taxes and labor costs, and following this decision from the 9th Circuit, they will now have another anti-business initiative to worry about,” said IFA Senior Vice President of Public Affairs and Government Relations Matt Haller. “The decision blatantly ignores longstanding California law and Supreme Court precedent, leaving 76,000 franchise hotels, gyms, salons, restaurants, and retail stores in legal limbo. This anti-business ruling is bound to discourage both franchise investors, entrepreneurs, and small business owners from opening or expanding in the state.”
On May 2, 2019, a panel on the 9th Circuit issued a decision in Vazquez v. Jan-Pro Franchising International, Inc. (Vazquez) that called for retroactive application of the California Supreme Court’s decision in Dynamex Operations West, Inc. v. Superior Court (Dynamex). The Dynamex decision adopted the so-called “ABC” test for determining employment status.
California is home to 75,800 franchise establishments that employ 728,000 individuals.
Celebrating 59 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 733,000 franchise establishments that support nearly 7.6 million direct jobs, $674.3 billion of economic output for the U.S. economy and 2.5 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.