Corporate Governance » Franchisor Principal On Hook For Franchise Wage Violations

Franchisor Principal On Hook For Franchise Wage Violations

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September 13, 2013

A federal court upheld a jury decision that a franchise employee can hold the franchisor founder and principal responsible for wage violations, though he had no direct control of the employee. The Western District Court of Texas agreed with the jury that the franchise functions under the Fair Labor Standards Act, and with the employee due overtime from a shut-down franchise, the principal could be considered an employer and held in violation of the law.

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