A California court held that two janitorial services franchisees were independent contractors, not employees of the franchisor, and thus were not entitled to workers' wages and job benefits. In California, an employment relationship will be deemed to exist where the person to whom the services are being rendered exercises sufficient control over the management and means of accomplishing the desired result. According to the court, in a franchise context, the burden is on the franchisee to show that the franchisor exercised control beyond what is necessary to protect and maintain its interest in its trademark, trade name, and good will.
In this case, the court noted that the franchisees maintained the right to select and supervise their employees, determine their employees' pay, and decline accounts. The franchisees purchased their own equipment and supplies and, aside from franchise fees, retained the revenues from their services. Importantly, the franchisees' franchise agreements explicitly provided that the franchisees were independent contractors. With this evidence against them, the court held that the franchisee failed to raise a triable issue.
Juarezv. Jani-King of California, Inc., N.D. Cal., No. 09-3495, January 23, 2012.