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Patel v. 7-Eleven, Inc.

Patel v. 7-Eleven, Inc.

United States District Court for the District of Massachusetts

September 10, 2020, Decided; September 10, 2020, Filed

Civil Action No. 17-11414-NMG

Opinion

 [*301]  MEMORANDUM [**2]  & ORDER

GORTON, J.

This is a putative class action brought by Dhananjay Patel, Safdar Hussain, Vatsal Chokshi, Dhaval Patel and Niral Patel (collectively "plaintiffs") on behalf of themselves and a putative class of similarly situated individuals who operate franchise stores of 7-Eleven, Inc. ("7-Eleven" or "defendant") in the Commonwealth of Massachusetts.

Plaintiffs allege that 7-Eleven (1) misclassifies its franchisees as independent contractors instead of employees in violation of the Massachusetts Independent Contractor Law, Mass. Gen. L. c. 149, § 148B (Count I), (2) has violated the Massachusetts Wage Act, Mass. Gen. L. c. 149, § 148 (Count II) and (3) has violated the Massachusetts Minimum Wage Law, Mass. Gen. L. c. 151, §§ 1, 7 (Count III). Plaintiffs initially made similar claims against two 7-Eleven market managers, Mary Cadigan and Andrew Brothers ("the individual defendants") but this Court dismissed those claims on July 20, 2018.

7-Eleven has counterclaimed, (1) seeking declaratory judgment that the various franchise agreements are void (Counterclaim I); (2) for breach of contract (Counterclaim II); and (3) for contractual indemnity (Counterclaim III). 7-Eleven also filed a third-party complaint on the same grounds against DPNEWTO1, Inc., DP  [*302]  Tremont Street, [**3]  Inc., DP Milk Street, Inc. and DP Jersey, Inc. (collectively, "third-party corporate defendants"), each of which is a corporation through which a named plaintiff contracted with 7-Eleven.

Pending before the Court are the parties' cross motions for summary judgment and plaintiffs' motion for class certification.

I. Background

A. The Parties

7-Eleven is a Texas corporation with its principal place of business in Texas. For more than 50 years, 7-Eleven has sold convenience store franchises. In addition to its franchises, 7-Eleven operates corporate stores, which are managed and staffed by acknowledged 7-Eleven employees ("company operated 7-Elevens"). As of 2018, there were approximately 1,700 company operated 7-Elevens and 7,200 franchisee-operated 7-Elevens in the United States. Approximately 160 of those franchisee-operated 7-Elevens are in Massachusetts.

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485 F. Supp. 3d 299 *; 2020 U.S. Dist. LEXIS 165057 **; 107 Fed. R. Serv. 3d (Callaghan) 1723; 2020 WL 5440623

Dhananjay Patel, et al., Plaintiffs, v. 7-Eleven, Inc., et al., Defendants.

Prior History: Patel v. 7-Eleven, Inc., 322 F. Supp. 3d 244, 2018 U.S. Dist. LEXIS 121705 (D. Mass., July 20, 2018)

CORE TERMS

franchisee, franchise agreement, franchise, Prong, franchisor, summary judgment, FTC Franchise Rule, independent contractor, plaintiffs', employees, discovery, inventory, regulated, trademark, license, parties, expert testimony, Counterclaim, third-party, training, genuine, FTC, summary judgment motion, class certification, provide a service, store employee, material fact, classification, recommended, proffered

Civil Procedure, Judgments, Summary Judgment, Burdens of Proof, Entitlement as Matter of Law, Entitlement as Matter of Law, Materiality of Facts, Genuine Disputes, Legal Entitlement, Appropriateness, Burdens of Proof, Nonmovant Persuasion & Proof, Movant Persuasion & Proof, Business & Corporate Law, Agents Distinguished, Independent Contractors, Masters & Servants, Masters & Servants, Labor & Employment Law, Wage & Hour Laws, Scope & Definitions, Independent Contractors, Evidence, Inferences & Presumptions, Presumptions, Rebuttal of Presumptions, Employment Relationships, Administrative Law, Judicial Review, Standards of Review, Deference to Agency Statutory Interpretation, Governments, Legislation, Interpretation, Allocation, Antitrust & Trade Law, Consumer Protection, Deceptive & Unfair Trade Practices, Federal Trade Commission Act, Distributorships & Franchises, Disclosure & Registration, Requirements, Federal Trade Commission Act, US Federal Trade Commission, Regulated Practices, Trade Practices & Unfair Competition, Scope, Franchise Relationships, Elements, Franchise Agreements, Enforcement of Franchise Requirements, False Advertising