The National Labor Relations Board (“NLRB”) has extended the deadline for posting workplace notices of employees’ rights. As discussed in our previous Franchise Law Newsletter, the NLRB issued a final rule in August 2011 requiring all private sector employers, subject to the National Labor Relations Act, to post workplace notices informing employees of their rights to participate in union activities and engage in collective bargaining, as well as to refrain from such activities. The notice also provides examples of unlawful conduct and instructs employees on how to contact the NLRB with questions and complaints. The deadline to post this notice… Read more

A federal district court in Indiana held that a terminated real estate franchisee who continued to use the trademarks of its former franchisor was liable for trademark infringement, trademark dilution, and most notably, trademark counterfeiting. The franchisee was also found liable for false advertising and false designation of origin under the Lanham Act, unfair competition, and breach of the franchise agreement. Federal judicial circuits are currently split regarding whether a terminated franchisee’s continued unauthorized use of a franchisor’s trademark can constitute counterfeiting. If the Indiana district court’s decision is upheld, it may provide strong precedent for franchisors seeking to curtail… Read more

In August, the National Labor Relations Board issued a final rule requiring all private sector employers subject to the National Labor Relations Act to post a workplace notice informing employees of their rights under the Act. The notice informs employees of their rights to participate in union activities and engage in collective bargaining, as well as to refrain from such activities. The notice also provides examples of unlawful conduct and instructs employees on how to contact the NLRB with questions and complaints. Failure to comply with the posting rule will be deemed a violation of the Act and may result… Read more

In an important ruling for businesses desiring to settle their legal disputes through arbitration, the U.S. Supreme Court has held that, where a complaint contains both arbitrable and non-arbitrable claims, a court must compel arbitration of the arbitrable claims. A court may not refuse to compel arbitration merely because it will lead to piecemeal litigation. The ruling arose from an action brought by individuals and entities who bought partnership interests in funds co-invested with financier Bernie Madoff. After these investors allegedly lost millions of dollars as a result of Madoff’s scheme to defraud, they brought claims against numerous parties including… Read more

The Alabama Supreme Court ruled that a motor vehicle manufacturer could terminate a dealer due to the deteriorating condition and appearance of the dealership’s facility even though the manufacturer was aware of the appearance problems more than 180 days before giving notice of termination to the franchisee. The Court held that, because the problems were both evolving and continuous, the time-notification requirement set forth in the Alabama motor vehicle dealer law was not violated. The Alabama law prohibits automobile manufacturers from premising a termination decision on a breach that is over 180 days stale before notice of termination is given…. Read more

The Utah Supreme Court recently held that a manufacturer’s failure to provide a distributor with certain marketing materials was not a breach of the implied covenant of good faith and fair dealing, and did not excuse the distributor’s failure to meet performance guarantees set forth in its agreement with the manufacturer. The agreement in question required the manufacturer to pay monthly minimum advance payments that would be offset by commission payments earned by the distributor. When the distributor failed to meet the agreement’s performance guarantees, the manufacturer sued for the difference between the advance payments it had made and the… Read more

The U.S. Supreme Court denied review of a decision by the Iowa Supreme Court holding that physical presence within the state was not a constitutional prerequisite to the state’s imposition of income tax on a franchisor. The Iowa court had held that the dormant Commerce Clause of the U.S. Constitution did not require a franchisor to maintain a physical presence within the state in order for the state to impose an income tax on revenue arising from the use of the franchisor’s intangibles by franchisees located within the state. State courts are currently split on whether the physical presence requirement… Read more

The Coalition of Franchise Associations (CFA) has released a “Universal Franchisee Bill of Rights,” which calls for a number of changes in the way franchisors and franchisees contract with one another. The document, which the CFA terms a “fairness doctrine,” calls for greater disclosure and transparency by franchisors, the uniform application of franchise operating standards, and the right to renew or transfer a franchise free of “unreasonable costs and/or stipulations.” The document also recommends giving franchisees the right to set their own prices, to freely associate with other franchisees and independent associations, and to terminate their franchise without penalty in… Read more

A federal district court in New Jersey granted summary judgment to a franchisee, holding that the franchisor must renew its franchise agreements even where those agreements contained no express right of renewal. Under the New Jersey Franchise Practices Act (NJFPA), it is unlawful for a franchisor to terminate, cancel or fail to renew a franchise agreement unless the franchisee has failed to substantially comply with requirements imposed by the franchise. The district court held that this provision of the NJFPA applies regardless of whether the franchise agreement at issue contains an express right of renewal. The district court’s decision relied… Read more