Parent Corporation Found Liable For Unpaid Wages

A parent corporation who franchises out their business can be found liable for the franchisee’s unpaid wages. In Depianti v. Jan-Pro Franchising International, Inc., Depianti will now be able to claim against Jan-Pro, even though he does not directly work for them. Depianti was misclassified as an independent contractor instead of an employee by the franchisee.

Jan-Pro franchises cleaning services. It sells rights to “regional master franchisees,” who then exclusively sell the Jan-Pro brand to “unit franchisees,” who perform the actual cleaning. Mr. Depianti was a cleaning worker for a regional franchise. He suffered a variety of wage law violations, including misclassification as an independent contractor. Part of the definition of an independent contractor is someone who performs “service outside the usual course of business,” so, clearly, Mr. Depianti should be identified as an employee. But the question for the court was whether Jan-Pro could be liable, too. The answer: yes. The SJC decided that Jan-Pro had created a structure over a group of cleaning workers. Therefore, even though there was no direct contract, Mr. Depianti and Jan-Pro were closely linked and means Jan-Pro is liable under the independent contractor statute.

If you work as an independent contractor and wonder if you have been misclassified, call us today.