Antitrust Law Daily Wrap Up, FRANCHISING & DISTRIBUTION—S.D. Cal.: Massage Envy not employer of franchisees’ massage therapists, (Jan 8, 2015)

By Greg Hammond, J.D.

Franchisor Massage Envy Franchising LLC (MEF) is not an employer of its franchisees’ massage therapists, the federal district court in San Diego decided. The franchisor therefore could not be liable for any wage and hour violations committed by its franchisees (Vann v. Massage Envy Franchising LLC, January 6, 2015, Benitez, R.).

Background. Terrance Allan Vann is a massage therapist who worked at multiple Massage Envy spa locations owned by franchisees Charis Group, LLC and OC Wellness Group, Inc. He filed a class action against Charis, OC Wellness, and franchisor MEF, alleging violations of California’s minimum-wage laws. MEF moved for summary judgment, and Vann moved to permit further discovery.

Discovery. Despite Vann’s claims that he learned of additional information that would likely contradict the positions taken by MEF, the court concluded that he failed to meet his burden of demonstrating that additional discovery would reveal specific facts precluding summary judgment. Specifically, he failed to allege what the “additional information” was, or any specific facts he believed further discovery would uncover. The motion for further discovery was consequently denied.

MEF as employer. MEF’s motion for summary judgment turned on whether MEF was an employer of Vann, and could therefore be liable for any wage and hour violations made by its franchisees. The court was required to determine whether MEF assumed the right of general control over the relevant day-to-day operations at its franchised locations. Noting that multiple spa locations changed their pay policies at different times and in different ways, the court determined that the lack of uniformity among those locations suggested that MEF did not control employee wages and hours, but left the responsibility to the franchise owners. The court also found that there was no evidence that MEF exercised control over the hiring and firing decisions at the franchise locations, or that it controlled the employees’ work schedules. MEF was therefore not an employer of Vann, and could not be liable for any of its franchisees’ violations of California’s minimum-wage laws. The motion for summary judgment was therefore granted.

The case number is 13-CV-2221-BEN (WVG).

Attorneys: Aaron M. Olsen (Zeldes Haeggquist & Eck, LLP) for Terrance Allan Vann. Hope Anne Case (Sacks, Ricketts & Case LLP) for Massage Envy Franchising, LLC. Stephanie Elaine Ahlstrom (Waterbridge Law Group, PC) for Charis Group, LLC.

Companies: Massage Envy Franchising LLC; Charis Group, LLC; OC Wellness Group, Inc.

Cases: FranchisingDistribution CaliforniaNews