Opinion ID: 4159704
Heading Depth: 3
Heading Rank: 1

Heading: Affiliation with CTG

Text: From the start, Plaintiffs were “driver‐owners” who made significant decisions regarding the operation of their small businesses. Silk, 331 U.S. at 719. Plaintiffs chose not only to enter into a franchise agreement with a CTG Franchisor Defendant instead of seeking more conventional employment, but also exercised considerable discretion in choosing the nature and parameters of that affiliation. Some Plaintiffs elected to purchase a franchise, either directly from a Franchisor Defendant or on the secondary market, while others opted to rent one. Further, because the franchise agreements contained different terms, and particularly because there was wide variation in both the price of the franchises and the fees associated with using them, Plaintiffs had to strike a balance between a franchise’s upfront cost and the favorability of its terms, a choice which ultimately affected its profitability. The franchise agreements’ termination provisions also are indicative of Plaintiffs’ independence. While Plaintiffs could reassess their choice to affiliate with CTG (not to mention the nature of that affiliation) and “terminate the [franchise] agreements” as they pleased,21 Saleem, 52 F. Supp. 3d at 542, the terms The franchise agreements did provide that drivers receive franchisors’ “prior 21 written consent . . . , which consent [could] not be unreasonably withheld,” before 20 of the agreements committed the Franchisor Defendants to maintaining them for substantial durations, or even indefinitely, absent Plaintiffs’ breach of those terms. Because Plaintiffs were free to drive for competitors, for personal clients, or not at all without violating their franchise agreements, the termination provisions constituted a significant restriction on the ability of Franchisor Defendants to exercise control. In addition, each of Plaintiffs’ agreements also designated them as independent contractors, and some Plaintiffs formed corporations to operate their franchises. “Though an employer’s self‐serving label of workers as independent contractors is not controlling,” Superior Care, 840 F.2d at 1059; see also Thibault, 612 F.3d at 845–46 (noting that “contractual designation of the worker as an independent contractor is not necessarily controlling” (emphasis added)), such a designation in the franchise agreement is pertinent to “the parties’ beliefs about the nature of the relationship,” Estate of Suskovich v. Anthem Health Plans of Va., Inc., 553 F.3d 559, 564 (7th Cir. 2009); see also Johnson v. City of Saline, 151 F.3d 564, 568‐69 (6th Cir. 1998) (observing, in ADA case, that “the contractual relationship reads unmistakably as one with an independent leasing or renting a franchise. See, e.g., J.A. 3377. It is not clear whether this requirement was enforced in practice. 21 contractor as opposed to one with an employee”).22 Thus, in the language of the Silk factors, Plaintiffs demonstrated independence and initiative in selecting franchise agreements that best fit their business plans, and in choosing — independent of Franchisor Defendants —to persist in those affiliations, all of which suggests, in the circumstances of this case, that Plaintiffs were “in business for themselves.” Superior Care, 840 F.2d at 1058–59.