Massachusetts Ruling May Impact Independent Contractors

The Massachusetts Supreme Judicial Court (SJC) recently handed down a key ruling that the three-prong test for independent contractors applies to the relationships between a franchisor and its franchisee, where the franchisor must also comply with the Federal Trade Commission’s (FTC) Franchise Rule.
 
The SJC held that the independent contractor statue applies to the franchisor-franchisee relationship and is not in conflict with the franchisor’s disclosure obligations set forth in the FTC Franchise Rule. The SCJ determined a franchisee providing services to a franchisor under the terms of a franchise agreement may, in fact, be classified as an “employee” of the franchisor under state wage-and-hour law.
 
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