Home Health Care, Franchise, and Food Industries Under Attack: April 2022 IC Legal News Update
Three industries suffered setbacks last month in independent contractor misclassification cases, while another targeted industry targeted scored a success. As we have reported in many prior blog posts, class action lawyers who regularly pursue IC misclassification cases have had in their crosshairs, for over a decade, a number of industries including home health care, franchise, and food manufacturing and distribution businesses. One of the cases reported below involves a court decision granting summary judgment against a Florida home health care company and in favor of a home health aide / companion where the court found that the company misclassified the aide as an independent contractor. Another case relates to a franchisor of tool distributorships that settled with California franchisees for $15 million. A third case pertains to a $23 million settlement between a large baked goods manufacturer and those who distribute its products to grocery stores in Maine. A logistics company serving as a freight forwarder broker, however, was successful in decertifying a class action by drivers in New York. Prudent companies in each of those and other industries can and should take steps to minimize their exposure to these types of lawsuits by using a process to restructure (even if only modestly), re-document, and re-implement their independent contractor and franchisee relationships in a manner that not only substantially minimizes the likelihood of such lawsuits but also, if sued, reduces considerably the amounts for which such lawsuits are oftentimes settled. One process used by many companies is IC Diagnostics (TM). That process includes the use of state-of-the-art arbitration clauses with class action waivers, which may not have been deployed by some or all of the companies in the four cases below.
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