Antitrust Law Daily Wrap Up, FRANCHISING & DISTRIBUTION NEWS: Cleaning services franchisor misrepresents opportunities, complaint alleges, (Oct 20, 2015)

By Greg Hammond, J.D.

Syatt Franchising, Inc., doing business as Jani-King of Greater Rhode Island, sold cleaning “franchises” knowing it did not have sufficient business to satisfy its obligations under its franchise agreements and misclassified “franchisees” as independent contractors, according to a complaint filed by Jani-King workers in the federal district court in Providence, Rhode Island (Fuller v. Syatt Franchising, Inc., October 19, 2015).

Jani-King employs thousands of cleaning workers across the United States, according to the plaintiffs. However, in order to induce workers to sign franchise agreements, Jani-King allegedly misrepresents that workers can earn certain monthly income, knowing that it does not have sufficient business to satisfy the terms of the franchise agreements advertised. The franchisees also claim that Jani-King: provides agreements that bury waivers of important rights and contain misleading section headings; provides workers with franchise agreements written only in English, while targeting immigrants that do not speak or read English; charges workers substantial sums of money as “franchise fees”; significantly underbids cleaning contracts; and misclassifies workers as independent contractors. As a result, workers have allegedly been paid far less than the fair value of their services and far less than they were promised, and they have been denied various benefits to which they are entitled to as employees under the wage laws of Massachusetts, the complaint asserts.

The workers brought three counts against Jani-King, alleging unjust enrichment, misclassification as independent contractors, and wage violations. They also seek to represent a class of all individuals who have performed cleaning services for Jani-King and/or its parent organization, successors and assigns within Massachusetts and have been subjected to the legal violations described in the complaint within Massachusetts.

The complaint requests damages and statutory enhancements of damages; declaratory and injunctive relief requiring that Jani-King cease its illegal practices and a declaration that the workers are in fact employees under Massachusetts Law, not independent contractors; attorney fees; and rescission of the written contracts between the named plaintiffs and Jani-King.

The case number is 1:15-cv-00438-M-LDA.

Attorneys: Peter Wasylyk, James W. Simpson, Jr., and Shannon Liss-Riordan (Lichten & Liss-Riordan, P.C.) for John Fuller, Maqunair Rodrigues De Freitas, and Adilson Dos Santos.

Companies: Syatt Franchising, Inc.; Jani-King International; Jani-King, Inc.

News: FranchisingDistribution RhodeIslandNews