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Franchisee Employment Verification Lawsuit

August 14th, 2019
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A Massachusetts-based coffee and doughnut franchise company recently sued several franchisees in Delaware and Pennsylvania, demanding that they cease operations. The company had previously terminated their franchise agreements because the operators failed to provide complete documentation showing that their employees were eligible to work in the U.S. The franchisees were also accused of keeping inaccurate business records. Two months prior to this lawsuit, the company sued several operators in New Jersey.

According to the company, a review of the franchisees’ employment and tax records from 2017 and 2018 revealed pervasive non-compliance with federal employment laws. The company also said the franchisees failed to consistently use E-Verify, a web-based program run by the U.S government that verifies the eligibility of employees to work in the U.S.

The franchisees have countersued, claiming the company terminated the locations without compensation while failing to give them the opportunity to correct the violations. Franchisees and employers increasingly face a myriad of federal, state, and local laws, as well as complex contracts and franchise agreements. Employers and franchisees unaware of the nuances of contracts, laws, and agreements may become embroiled in expensive, time-consuming litigation.

Our Philadelphia employment lawyers at Sidney L. Gold & Associates, P.C. help employers and franchisees comply with federal, state, and local laws, and provide legal guidance when disputes arise. To schedule a free consultation, call us at 215-569-1999 or fill out our online form today. Located in Philadelphia and Pennsauken, New Jersey, we serve clients throughout Bucks County, Chester County, Delaware County, Montgomery County, and South Jersey.

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