By Deborah S. Coldwell, Haynes and Boone, LLP, Iris Gibson, Haynes and Boone, LLP, Jamee Cotton, Haynes and Boone, LLP, Lissette Villarruel, Haynes and Boone, LLP, Sally Dahlstrom, Haynes and Boone, LLP
Texas courts continue to examine frequently-litigated franchising issues, and this Survey period produced a “blockbuster” development concerning joint-employer liability in the franchise context: the imposition of vicarious liability on the franchisor for labor law violations asserted by a franchisee’s employees against the franchisee. In response to the National Labor Relations Board’s recent decision to classify franchisors as joint-employers with their franchisees, the Texas Legislature passed a bill restricting such classification only to situations where the franchisor exercises direct control over those employees beyond what is necessary to protect the franchisor’s brand. Other Texas cases during this Survey period provide guidance for franchisors on a number of procedural issues—including personal jurisdiction, choice-of-law, arbitration, and jury waiver provisions—and courts also continue to define the contours of common law and statutory claims in the unique franchising model.
Deborah S. Coldwell, et al., Franchise Law, 2 SMU Ann. Tex. Surv. 159 (2016)