SAN DIEGO (Legal Newsline) – The International Franchise Association and other groups are suing to keep California from enforcing its new test for determining whether a worker is an employee or an independent contractor.
The IFA was joined by the Asian American Hotel Owners Association, Supercuts Franchisee Association and the DD Independent Franchise Owners Association in a lawsuit filed in federal court on Nov. 17.
Legislation passed two years ago in California imposes an ABC Test to determine how to classify workers, and the plaintiffs say that test is in conflict with federal laws that regulate franchising. It notes a Massachusetts federal judge has found an “inherent conflict” between that state’s version of the test and FTC rules.
“The ABC Test thus stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress, including the authorization and regulation of the sale of franchises and the licensing of trademarks in connection therewith,” the suit says.
The suit seeks an injunction against the test being applied to franchises.