en In Browning-Ferris NLRB Gives Workers Victory for Labor Day Celebration <!-- google_ad_section_start --><div class="photoright"><img alt="BFI was bought out by Allied Waste" src="/sites/default/files/resize/AWI-680x382.jpg" style="width: 680px; height: 382px;" width="680" height="382" /> <div class="caption">Browning-Ferris waste sanitation service was bought out in 1999 by Allied Waste.&nbsp;AWI truck&nbsp;featured here. Photo on <a href="" target="_blank">Wikipedia by Ildar Sagdejev</a></div> </div> <p>WASHINGTON, D.C. &ndash; The International Brotherhood of Teamsters (IBT) is no doubt celebrating this Labor Day with what it considers its most dramatic victory during the Obama years, receiving a ruling last week from the National Labor Relations Board in the Browning-Ferris case.</p> <!--break--><!--break--><p>&quot;Today&#39;s decision is another step to show that companies can no longer claim they are not employers when problems arise. This is important in industries like the solid waste and recycling industries, where workers can face dangerous working conditions and need proper training and standards to have safe working environments,&quot; said Ron Herrera, Director of the Teamsters Solid Waste and Recycling Division on August 27. &quot;Instead of pointing fingers if a worker gets hurt, companies will now be accountable. It&#39;s the decent and reasonable expectation that workers should have at work.&quot;</p> <p>The NLRB announced on August 27, in a 3-2 vote, its decision&nbsp;in the Browning-Ferris&nbsp;Industries (BFI) of California case.&nbsp;The non-franchised waste management firm was ruled a joint employer with its subcontractor staffing agency that provides most of its temporary employees.</p> <p>The board&#39;s decision basically refines NLRB&#39;s traditional standard saying, &quot;When two entities, directly or indirectly, share the ability to control the terms of employment of workers they are &quot;joint employers.&quot; In evaluating whether an employer possesses sufficient control over employees to qualify as a joint employer, the NLRB will consider whether an employer has exercised control over terms and conditions of employment indirectly through an intermediary, or whether it has reserved the authority to do so.</p> <p>While Browning-Ferris focuses on the relationship between a non-franchised company and a subcontractor, the franchisor-franchisee relationship has also been examined recently in determining &quot;joint employment&quot; issues surrounding OSHA (Occupational Safety &amp; Health Administration) and other health and safety violations against franchisee employees. Early on when legal cases began surfacing over the issue, the NLRB determined that the franchisor had the right to exercise indirect control over franchise owners&#39; staff in order to protect its brand.</p> <p>That changed in April 2014, when Dr. David Weil was appointed by President Obama as administrator of the Department of Labor Wage and Hour Division. The new appointee voiced his opinion stating, &quot;The direct, two-party relationship assumed in federal and state legislation and embodied in traditional approaches to enforcement no longer describes the employment situation on the ground.&quot;</p> <p>In a Law360 article Dr. Weil explained that &quot;due to business decision to focus on core competencies, a desire to shift labor costs and liabilities to smaller business entities or to third-party labor intermediaries . . . as a means to &#39;subvert&#39; compliance with labor policies, companies fragment their operations by transferring management and operations of certain units to outside entities. As a result, there becomes a &#39;fissure,&#39; or split, in the employment relationship that makes workers &#39;vulnerable&#39; to abuses.&quot;</p> <p>In order to protect workers from abuses, Dr. Weil argued that the laws must hold the employers at the top of the pyramid liable, jointly liable or vicariously liable for labor and employment liabilities of third parties with whom they contract.</p> <div class="photoright"><img alt="Dr. David Weil" src="" style="float: left; margin-left: 5px; margin-right: 5px;" width="116" height="132" /> <div class="caption">Dr. David Weil</div> </div> <p>One law firm expressed its dismay in reading the Browning-Ferris decision. Baker Donelson attorneys stated in their labor and employment Alert bulletin, &quot;The National Labor Relations Board in a 3-2 decision last Thursday gutted more than 30 years of legal precedent when it changed the joint employer standard in business relationships in a case involving Browning-Ferris Industries. Under this decision, contractors and subcontractors, franchisors and franchisees, and employers and staffing companies (and others) may all be deemed to be joint employers and each subject to the NLRB and its decisions. This ruling is a part of an overall strategy of the Obama NLRB to change the business model to favor unions.&quot;</p> <p>In explaining the case, the attorneys said the NLRB found that BFI and Leadpoint Business Services, the subcontractor, were joint employers of Leadpoint&#39;s employees. &quot;Significantly, BFI&#39;s employees were already represented by a union, and the same union wanted to add its employees to the bargaining unit.&quot; The attorneys said the decision turned on the agreement with Leadpoint. &quot;Thus, the agreement with the temporary agency is critical,&quot; the legal bulletin said.</p> <p>Baker Donelson gave a few takeaways from the decision that can now show a &quot;joint employer&quot; relationship:</p> <ul> <li>Having the ability to reject temporary employees or to ask the agency to remove employees</li> <li>Establishing the qualifications of the temporary employees</li> <li>Requiring a drug test of temporary employees</li> <li>Requiring a maximum wage scale to be paid to temporary employees</li> <li>Requiring that only the primary employer can establish the work shifts</li> <li>Requiring the temporary employees to comply with the primary employer&#39;s safety and training procedures</li> <li>Having the primary employer&#39;s supervisors supervise the temporary agency&#39;s employees</li> </ul> <h3><span style="color:#800000;"><strong>Franchisee advocates say franchisors exercise too much control over franchises</strong></span></h3> <p>The Browning-Ferris case is one of two NLRB legal cases that has the franchise community on edge. The second, yet to be decided, is one that was brought against McDonald&#39;s USA in December 2014 by the Fast Food Workers Committee and Service Employees International Union, in which the NLRB ruled that McDonald&#39;s is a &quot;joint employer&quot; with its franchisees. On August 14 the board denied McDonald&#39;s request for an appeal of its decision.</p> <p>Robert Purvin, CEO and chair of the American Franchisees and Dealers Association said given the evolution of franchise relationships over the past 50 years that have given greater and greater control by franchisors over franchisees, decisions like Browning-Ferris will inevitably creep into franchise regulation.</p> <p>&quot;The dividing line between whether a franchisee is a business owner, an independent contractor, an indentured servant or an employee of the franchisor has become increasingly blurred over the years, and for many franchise systems the line has been erased,&quot; Purvin stated. He said if franchisors and franchisees jointly desire to reinvigorate the independent contractor relationship, the solution is to give ownership and control of the franchised business back to the franchisee, by recognizing and confirming essential indicia of business ownership in the franchise owner.</p> <p>Purvin added, &quot;Hopefully, franchise owners, and franchisee associations, will cease the opportunity presented by Brown-Ferris and similar decisions to petition their franchisors to shift the direction of the pendulum back to the recognition of business ownership in the franchisee, and the requisite right to own and control the conduct of the franchised business.&quot;</p> <p>Jeff Haff of Dady &amp; Gardner noted in reading the Browning-Ferris decision that in one of the footnotes, (number 94) it states that in Patterson v. Domino&#39;s Pizza, LLC, the decision addressed the particularized features of franchisor/franchisee relationships, none of which are present here.&quot;</p> <h3><span style="color:#800000;"><strong>What does the Browning-Ferris decision mean for franchisors? Not much</strong></span></h3> <p>Haff said since the NLRB made it clear that its ruling was not referencing the franchisor-franchisee relationship and that it has nothing to do with franchises. &quot;The question in my mind is whether there are requirements in franchising for franchisors to exercise some level of control. If the franchisor doesn&#39;t exercise some control of its trademarks, then it can lose those trademarks. So the question I have is will the NLRB say, look, we&#39;re going to give some counterweight to that requirement. We&#39;re going to say in the franchise context there is some control that has to be exercised and therefore that level of control isn&#39;t enough to make you a joint employer. That is what I think is going to ultimately be the result.&quot;</p> <p>The franchise attorney continued, &quot;The NLRB is going to have to decide how much weight they are going to give to the requirement that a franchisor protests its marks. If they say none, than yes, there is going to be a lot of franchisors who are going to be employers. If they say, some, then you are going to have franchisors on a case by case basis to determine how much control they have. Is it more than they need? Or NLRB could rule we will never find that franchisors are joint employers with franchisees.&quot;</p> <p>On Thursday, the AFL-CIO also reveled over the NLRB&#39;s decision saying working people won a significant victory, increasing employer accountability for wages and work conditions. Like most government rulings, the union said the decision was rather complicated and many people are asking question as to what it means. One asked if the decision was about McDonald&#39;s and other franchisors. The AFL-CIO explained that it deals specifically with a staffing agency that supplied workers to BFI. &quot;But the rule laid out in the decision could apply to a franchise situation, depending on the facts of the case and how much the franchisor has authority to control key aspects of the workers.&quot;</p> <hr /> <p><strong>Related Articles</strong>:</p> <ul> <li><a href=";sa=U&amp;ved=0CAUQFjAAahUKEwjE7KibgtTHAhUXEpIKHUZ-AL8&amp;client=internal-uds-cse&amp;usg=AFQjCNE6gDdWQqOAYB2tIAIFjw4GCb_wVg" target="_top">A New Day for Franchisor Liability | BlueMauMau, Franchise news</a></li> <li><a href=";sa=U&amp;ved=0CAgQFjABahUKEwjE7KibgtTHAhUXEpIKHUZ-AL8&amp;client=internal-uds-cse&amp;usg=AFQjCNG-b0fPEyg0TtuUOZsWz-DmX2krdg" target="_top">Franchisors Warned: Hands Off Franchisee Employees&nbsp;</a></li> <li><a href="">NLRB Joint Employer Redifinition Threatens Franchises (Law360)</a></li> <li> <p><a href="http://NLRB Rules in Favor of Teamsters in ’Joint Employer’ Case">NLRB Rules in Favor of Teamsters in &rsquo;Joint Employer&rsquo; Case</a></p> </li> <li> <p>&nbsp;</p> </li> </ul> <!-- google_ad_section_end --> Legal judgment & dispute resolution Administrator of DOL AFL-CIO Browning-Ferris Industries decision Dr. David Weil International Brotherhood of Teamsters joint employer standard Fri, 04 Sep 2015 17:21:12 +0000 Janet Sparks 14671 at Franchise Jobs Cool to 22,800 in August <!-- google_ad_section_start --><div class="photoright"><img alt="" src="" width="481" height="289" /></div> <p>ROSELAND, N.J.&mdash;U.S. private-sector franchise jobs had a sub-par increase in August, increasing their hiring by 22,800 while small businesses increased by 85,000, according to ADP Research Institute. </p> <!--break--><!--break--><p> The two types of franchises that added the most jobs were auto dealerships, which added 7,300 jobs and restaurants, which added 8,300. Business services was lackluster, with 0 percent growth.</p> <p>&quot;Franchise employment growth in August was below the twelve-month average of almost 27,000 jobs added per month,&quot; said Ahu Yildirmaz, vice president and head of the ADP Research Institute. &quot;However, the franchise employment growth rate was still above that of the overall labor market.&quot;</p> <p>For the past two years, December and June have been the highest months that franchises have recruited.</p> <p><img alt="" src="" style="width: 680px; height: 395px;" width="680" height="395" /></p> <!-- google_ad_section_end --> The Economy Thu, 03 Sep 2015 19:04:57 +0000 Don Sniegowski 14666 at California Bar Announces Franchise Specialty Exam <!-- google_ad_section_start --><p>SAN FRANCISCO &ndash; The state bar of California wants attorneys to know that they can now register for the state bar exam for franchise and distribution law. California is the first and so far only state to certify specialists in the area of franchise and distribution law. According to the bar, the state now has approximately 50 board certified franchise and distribution law specialists.</p> <p>California attorneys can <a href="">register for the examination</a> if they have been practicing in the specialty since at least January 2014.&nbsp; Once the exam has been passed, candidates have two years to satisfy the remaining requirements of certification. The candidate:</p> <ul> <li>must have practiced franchise and distribution law for the past 5 years,</li> <li>complete certain task and experience requirements,</li> <li>complete continuing education in franchise and distribution law or a related area, and</li> <li>be favorably evaluated by attorneys familiar with his or her work.</li> </ul> <p>Board certified specialists will be listed on the California state bar website, and these attorneys may identify themselves as &quot;certified specialists&quot; under the California Rules of Professional Conduct.</p> <p>The <a href="">specialization examination</a> will be administered in the Oakland Convention Center and Pasadena Convention Center on Tuesday, October 27, 2015.&nbsp; Doors open at 7:00 a.m. It is given every other year and will be offered again in 2017.</p> <p>More information can be found at <a href=""></a> about the specialization program and exam registration.&nbsp; Although registration is available until October 1, 2015, a lower Early Bird pricing will cease being offered in just a few days, September 1, 2015.</p> <!-- google_ad_section_end --> Legal News bar exam franchise lawyer certification Fri, 28 Aug 2015 13:26:39 +0000 Don Sniegowski 14654 at NLRB Denies McDonald’s Appeal on Joint Employer Order <!-- google_ad_section_start --><div class="photoright"><img alt="" src="" style="width: 681px; height: 383px;" /> <div class="caption">A recruiting sign on the wall of a franchised McDonald&#39;s. photo/bmm</div> </div> <p>NEW YORK &ndash; The National Labor Relations Board denied McDonald&#39;s Corporation&#39;s request for a special appeal on claims that it is a &quot;joint employer&quot; with its franchisees. </p> <!--break--><!--break--><p> The unfair labor practices charge, filed by the Service Employees International Union (SEIU), alleges that the world&#39;s largest hamburger chain should be ruled a joint employer because of the control it has over the labor relations policies of its restaurant owners.</p> <p>Some in the franchise community believe if the decision becomes final, the entire relationship between franchisor and franchisee could be transformed to the detriment of franchising. The International Franchise Association stated earlier this year that the redefinition could deflate growth projections for the industry. &quot;A redefinition of who is the employer threatens that dream and, no matter what the intent . . . the ultimate losers may very well be the employees as fewer and fewer franchise opportunities arise.&quot;</p> <p>The Coalition of Franchisee Associations has also opposed the joint employer ruling. Executive director Misty Chally expressed her organization&#39;s view last June saying attempts to redefine &quot;joint employer&quot; are direct threats to the franchise model and would make it much easier for unions to organize franchise businesses. &quot;It will force franchisors to exercise unprecedented control over franchisees and destroy the independence that has made the franchise model work for decades. Further, this new standard will significantly increase the number of lawsuits filed, as complainants will be looking to the &quot;deep pockets&quot; of the franchisors; little do they know it is the franchisee who will be paying because of the indemnification clause he or she signed via their franchise agreement,&quot; Chally stated.</p> <p>Last December the NLRB filed 13 cases against McDonald&#39;s and its franchisees, alleging they violated the rights of employees, who worked at McDonald&#39;s restaurants at various locations across the country. The government agency&#39;s complaints stated that McDonald&#39;s and its restaurant owners made statements and took actions against fast food workers for engaging in activities that aimed to improve their wages and working conditions. They accuse the parties of interfering with nationwide protests organized by unions over the past three years over their terms and conditions of employment.</p> <p><strong>NLRB&#39;s order says Law Judge did not err in decision</strong></p> <p>The request for an appeal, filed by both McDonald&#39;s and its franchisees, had asked the Administrative Law Judge for a &quot;bill of particulars&quot; explaining the facts that the general counsel intended to rely upon in showing the franchisor was a joint employer. McDonald&#39;s had argued that without the pertinent information of how the general counsel intended to present its case in evaluating whether there was a joint employer relationship, it would be denied due process. McDonald&#39;s asked the ALJ to strike the SEIU&#39;s allegations and dismiss its 2014 complaint.</p> <p>In the short five-paragraph order, three of the five NLRB members determined that the Administrative Law Judge Lauren Esposito gave a &quot;well-reasoned&quot; analysis of McDonald&#39;s request. They stated that &quot;the consolidated complaint was sufficient to put McDonald&#39;s on notice that the general counsel is alleging joint employer status based on McDonald&#39;s control over the labor relations practices of its franchisees.&quot;</p> <p>Two NLRB board members did not agree with the majority and issued a lengthy dissent. They argued that McDonald&#39;s request &quot;presents an acute due process problem and is shortsighted in terms of prudently managing the board&#39;s resources and minimizing the burden placed on the parties.&quot;</p> <p>The two member&#39;s dissent stated that although the complaint is consistent with the NLRB&#39;s current joint employer standard, its language provides no notice regarding the new joint employer standard upon which the general counsel intends to rely upon in the alternative, nor what facts the general counsel believes will prove joint employer status under the alternative standard.</p> <p>Their opposition argued that &quot;significantly, as the dissent noted, that alternative theory may be the&nbsp;sole&nbsp;basis for finding that McDonald&#39;s violated the Act despite the utter lack of notice in the complaint regarding the underpinnings of that theory.&quot;</p> <p>The<em> National Law Review</em> reported this week that such a denial of due process, as the dissenters pointed out, &quot;means that if the board ultimately, at the end of these lengthy, expensive and time consuming proceedings, finds that McDonald&#39;s is a joint employer with its franchisees under the alternative theory, and that the Act was violated, McDonald&#39;s will have a plausible and potentially compelling argument that its due process rights have been violated&mdash;and the board may find that it has expended substantial resources building and litigating a case on an unstable foundation.&quot;</p> <hr /> <p><strong>Related Articles</strong>:</p> <ul> <li><a href="" target="_blank">NLRB Denies McDonald&#39;s Appeal of Motion to Dismiss Joint Employer Claims</a></li> <li><a href="" target="_blank">NLRB Fact Sheet on McDonald&#39;s</a></li> <li><a href="" target="_blank">As NLRB Attacks Franchisors Like McDonald&#39;s, Is &#39;Quasi-Franchising&#39; the Answer?</a></li> </ul> <!-- google_ad_section_end --> Legal judgment & dispute resolution Coalition of Franchisee Associations IFA McDonald's sued by NLRB SEIU Tue, 25 Aug 2015 20:07:58 +0000 Janet Sparks 14648 at Jared Fogle Pleads Guilty to Child Sex, Pornography <!-- google_ad_section_start --><div class="photoright"><img alt="Subway ex-spokesman Jared Fogle" src="" style="width: 330px; height: 264px;" /> <div class="caption">Jared Fogle serves Subway Photo: cc <a href="" target="_blank">Anna Hanks</a>, Sep 30, 2014</div> </div> <p>INDIANAPOLIS &ndash; On Wednesday, the United States of America and the U.S. Attorney for Southern Indiana entered a plea agreement with Jared Fogle, spokesman for Subway sandwich chain, on two counts of child pornography. Fogle plead guilty, waiving his rights to indictment by a grand jury.</p> <!--break--><!--break--><p>U.S. Attorney Josh J. Minkler stated in a press release, &quot;Mr. Fogle has admitted in court pleadings that he received child pornography involving multiple minors living in Indiana and other countries over the course of several years. &nbsp;His child pornography crime began when he learned that alleged co-conspirator Russell Taylor was sexually exploiting a 14 year old girl in March 2011.&quot; Minkler said, at that time, Fogle did nothing to stop the abuse.</p> <p>Fogle&#39;s criminal child pornography activity began years prior to being involved with Taylor. The U.S. Attorney said that from 2007 until June 2015, Fogle repeatedly engaged in Internet social networking and traveled to other states for the purpose of engaging in commercial sexual acts with at least two underage minors. &quot;Such activities have devastating effects on the lives of minors subjected to such sex trafficking,&quot; Minkler declared.</p> <p>After Fogle&#39;s initial appearance in court he was released on home detention with GPS monitoring and other conditions.&nbsp;</p> <h3><strong><span style="color:#800000;">Court documents reveal sordid details of behavior</span></strong></h3> <p>The first count charges Fogle with distributing and receiving visual depictions of minors engaging in sexually explicit conduct, and with conspiring with others to do so. The second charges Fogle with travelling in interstate commerce in order to engage in unlawful commercial sexual acts with minors. Court documents state that Fogle could be imprisoned for 60 to 240 months (5 to 20 years) for Count One, and receive a fine of up to $250,000. On his release from prison, he will be on supervised probation for a term of up to 5 years to life. Count Two requires Fogle to be imprisoned for up to 360 months (30 years), and pay a fine up to $250,000. He will again serve up to 5 years on probation following his release.</p> <p>Fogle acknowledges that his plea agreement is governed by federal procedures and that his sentence is in the hands of the court, meaning it could be higher or lower than that recommended by both parties. The plea agreement is based on the information presently known to the U.S. Attorney in Southern District of Indiana.</p> <p>Fogle also acknowledges that nothing in his plea agreement can protect him from prosecution for any charges outside of the agreement. Nor will it protect him from any offense committed after the date of the plea agreement.</p> <p>At this time, both parties have not agreed to a specific sentence, and preserve the right to present evidence and arguments concerning what they believe is the appropriate sentence. The Government&#39;s recommendation is to not ask for a sentence greater than 151 months, (12 &frac12; years) of imprisonment, and Fogle has agreed not to ask for a sentence below 60 months (5 years) of imprisonment.</p> <h3><strong><span style="color:#800000;">Restrictions on sentencing</span></strong></h3> <p>As part of his sentencing, Fogle will not be allowed to possess any obscene material, child pornography or erotica, or nude images of minors, as part of his sentencing. He must also participate in a program of treatment for sexual disorders, including periodic polygraph examinations. Fogle will not be allowed to have any unsupervised meetings, activities or visits with minors, unless approved by his probation officer. He must also register as a sex offender with all appropriate authorities.</p> <p>Other requirements dictate that he must submit to regular and random searches by his probation officer, which will include of his person, vehicle, office/business, residence, and property. That will include his computer systems, telephones and Internet enabled devices. Fogle must also consent</p> <p>By federal law, he must also provide samples of DNA as directed by his probation officer.</p> <p>Fogle will pay $100,000 to each of the 14 minor victims, for a total of $1.4 million for agreed restitution. He is required to deposit the total amount in a trust fund within two days of his plea agreement. The funds will be distributed within 10 days or later, as directed by the court. Nothing in the agreement prevent identified or unidentified victims from seeking additional restitution. At the present time, the Government does not have any other victims.</p> <p>Fogle must also forfeit $50,000 to the United States on the date of sentencing as a substitute for vehicles, personal property and other assets he used in connection with the offense. He must also submit all requested financial information to the U.S. Attorney&#39;s Office, and authorize the Inmate Financial Responsibility to obtain credit reports.</p> <h3><strong><span style="color:#800000;">Factual basis for guilty plea</span></strong></h3> <p>Regarding Count One, on multiple occasions between 2011 and April 2015, Fogle received visual depictions of numerous minors engaging in sexually explicit conduct from Russell Taylor, the former executive director of the Jared Fogle Foundation. Fogle knew Taylor&#39;s relationship with each minor and knew their names. In some cases, Fogle met the minors during social events in Indiana.</p> <div class="photoright"> <blockquote class="twitter-tweet" data-partner="tweetdeck"><p>We no longer have a relationship with Jared and have no further comment.</p> <p>&mdash; SUBWAY&reg; (@SUBWAY) <a href="">August 18, 2015</a></p></blockquote> <script async src="//" charset="utf-8"></script></div> <p>Fogle knew victims were being video recorded by Taylor in his residence, and that victims did not know they were being recorded. He knew victims were as young as six years old. He also knew Taylor obtained and provided him with child pornography from the Internet. Fogle&#39;s distribution of videos was accomplished using interstate or foreign commerce. And in one case, displayed the pornography to another person. Some videos and other material was manufactured outside Indiana.</p> <p>Regarding Count Two, from 2011 and April 2015, Fogle traveled from Indiana to New York City in order to engage in sexual activity with minors under the age of 18. He repeatedly asked two minors to provide him with access to minors as young as 14 for the purposes of sex. Fogle engaged in sex multiple times with one victim, at age 16 and 17, in exchange for money. She told authorities in interviews that she discussed her age with Fogle.</p> <p>The investigation of Fogle revealed he had sex with numerous prostitutes in Virginia, Missouri and Nevada, asking them to provide him with access to other minors.</p> <h3><strong><span style="color:#800000;">Family and Subway react to Jared&#39;s shocking criminal behavior</span></strong></h3> <p>Jared Fogle is married and the father of two young children. His&nbsp;family released a statement yesterday after the press conference, saying how &quot;shocked and profoundly disappointed&quot; they were in &quot;Jared&#39;s abhorrent criminal behavior.&quot; His wife issued a separate statement that she is also in the process of obtaining a divorce.</p> <p>Subway issued a statement through social media service Twitter, saying: &quot;Jared Fogle&#39;s actions are inexcusable and do not represent our brand&#39;s values. We had already ended our relationship with Jared.&quot;</p> <hr /> <p><strong>Related reading</strong>:</p> <ul> <li><a href="" target="_blank">Jared Fogle&#39;s guilty plea might cast shadow over Subway</a></li> <li><a href="" target="_blank">US Attorney Press Release August 19, 2015</a></li> <li><a href=";rct=j&amp;q=&amp;esrc=s&amp;source=web&amp;cd=4&amp;cad=rja&amp;uact=8&amp;ved=0CCcQFjADahUKEwiO75zX_bfHAhWDL4gKHct0A0k&amp;;ei=_PLVVY6BBoPfoATL6Y3IBA&amp;usg=AFQjCNEWhArsg2bgZzExoL2N5BsUdyKN9g">Jared Fogle to plead guilty to sex acts with minors, child porn</a></li> <li><a href="" target="_blank">Former Subway spokesman Jared Fogle to plead guilty to child pornography charges</a></li> <li><a href="" target="_blank">Court documents reveal Jared Fogle&#39;s sordid secret life</a></li> <li><a href="" target="_blank">Jared Fogle Barely Hid His Lust for Minors - The Daily Beast</a></li> </ul> <!-- google_ad_section_end --> Legal judgment & dispute resolution brand corruption brand spokesperson misconduct Thu, 20 Aug 2015 15:17:35 +0000 Janet Sparks 14638 at Subway Ex-Spokesman Jared to Plead Guilty to Child Pornography <!-- google_ad_section_start --><p>INDIANPOLIS &ndash; The Associated Press tweeted this evening that Subway pitchman Jared Fogle will enter a guilty plea tomorrow to possession of child pornography. An Indiana television station first reported the news, citing sources it did not identify. The report also said the U.S. Attorney&#39;s Office in Indianapolis planned to hold a news conference on Wednesday.</p> <!--break--><!--break--><p>The report comes six weeks after the FBI, the Indiana State Police and the U.S. Postal Service raided Fogle&#39;s affluent home in Zionsville, Indiana. They announced they were conducting an investigation, which some suspected was triggered by the arrest of Russell Taylor, the executive director of the Jared Fogle Foundation, an organization formed by the Subway pitchman to raise the awareness of childhood obesity. The investigation of Taylor revealed that he had a cache of sexually explicit photos and videos he allegedly produced by secretly filming minor children at his home.</p> <p>Jared was first discovered by Subway when he was a student at Indiana University. When the college paper published an article about his dramatic weight loss while eating Subway sandwiches, it was soon picked up by the national media. Fogle&nbsp;became a celebrity, appearing on television commercials and attending events on Subway&#39;s behalf. &quot;Jared&quot; became a part of the sandwich chain&#39;s success story, showing that a &quot;regular guy&quot; could easily lose weight, his weight loss topping 235 pounds.</p> <p>When his foundation&#39;s head was arrested last May and charged with seven counts of production of child pornography and one count of possession of child pornography, Fogle announced he was severing ties with Taylor. While in prison, Taylor unsuccessfully tried to commit suicide. Shortly after, government officials announced Taylor&#39;s case would be extended to allow more evidence to surface. The Jared Fogle investigation then began.</p> <p>Authorities removed documents, computers, DVDs and other electronic equipment that could provide evidence against him&nbsp;from Fogle&#39;s home. At that time, his attorney stated that he had not been arrested or charged with any crime.</p> <p>A week later&nbsp;other news reports related to Jared Fogle&#39;s past history began to surface. The Gawker stated that he was widely known in college for owning a porn-lending library. Another reported that one woman came forward telling that Jared would often visit schools in Sarasota County, Florida, alleging he made numerous disturbing comments that &#39;middle school girls are hot.&#39; When she contacted the FBI she was asked to wear a wire and record her conversations with Fogle.</p> <p>Earlier this month&nbsp;the FBI subpoenaed an affidavit containing alleged texts between Jared Fogle and a former Subway franchisee. Reports said that Fogle stated in messages that he paid for sex with a 16-year-old girl, according to the franchisee&#39;s attorney.</p> <p>AP Article: <a href=";SECTION=HOME&amp;TEMPLATE=DEFAULT&amp;CTIME=2015-08-18-22-19-24" target="_blank">TV Report: Ex-Subway Pitchman to Admit to Child-Porn Charges</a></p> <hr /> <p><strong>Related Articles</strong>:</p> <ul> <li><a href="" target="_blank">Subway Disgraced Spokesman Jared Fogle Bragged about Amazing Sex with 16-year-old</a></li> <li><a href="" target="_blank">Subway Faces Tough Times</a></li> <li><a href=";sa=U&amp;ved=0CAUQFjAAahUKEwjAvqSX5YjHAhXWFZIKHeaxCQw&amp;client=internal-uds-cse&amp;usg=AFQjCNHq7M_gK5dYfFx49kVQC_ZazquowQ" target="_blank">Subway&#39;s&nbsp;&quot;Jared&quot; Engulfed by Media Storm</a></li> <li><a href="" target="_blank">FBI Raids Home of Subway&#39;s Jared in Child Porn Sting</a></li> <li><a href=";rct=j&amp;q=&amp;esrc=s&amp;source=web&amp;cd=1&amp;cad=rja&amp;uact=8&amp;ved=0CB4QFjAA&amp;;ei=2-2iVdPIJ9TqoATB37WYCQ&amp;usg=AFQjCNGYiB24oRqlbZqEoebMD6DlIjxEzA" target="_blank">How Will Subway Scandal Affect Fort Lauderdale Billionaire</a></li> <li><a href=";rct=j&amp;q=&amp;esrc=s&amp;source=web&amp;cd=13&amp;cad=rja&amp;uact=8&amp;ved=0CCgQFjACOAo&amp;;ei=wfCiVeiBNIK3ogTXob7oAQ&amp;usg=AFQjCNG47KNFLEpCpaA07GhkoSPgeL8QMA" target="_blank">Raid at Jared Fogle&#39;s home only the latest in series of ...</a></li> <li><a href="" target="_blank">Subway&#39;s Jared Fogle Speaks to Area YMCA Campers</a></li> <li><a href="" target="_blank">The Jared Fogle / Subway Story: A Cautionary Tale of Brand</a></li> <li><a href=";rct=j&amp;q=&amp;esrc=s&amp;source=web&amp;cd=11&amp;cad=rja&amp;uact=8&amp;ved=0CEwQFjAK&amp;;ei=rfmiVa2YCsK7ogSy_bfQBQ&amp;usg=AFQjCNF9aDwDDWVa7deRXiRBK0EII8UVpw" target="_blank">Subway planned to rebrand Jared Fogle as a family man</a></li> <li><a href=";rct=j&amp;q=&amp;esrc=s&amp;source=web&amp;cd=1&amp;cad=rja&amp;uact=8&amp;ved=0CB8QqQIwAGoVChMI1pGk8KbdxgIVQlqICh1lBQWz&amp;;ei=XmimVdbqEsK0oQTlipSYCw&amp;usg=AFQjCNG2dhQG1_cZqhu3W2IMKx0QoRJOIg&amp;bvm=bv.97949915,d.cGU" target="_blank">Brad Pitt and Angelina Jolie are helping deflect Subway&#39;s Jared Fogle scandal</a></li> <li><a href=";rct=j&amp;q=&amp;esrc=s&amp;source=web&amp;cd=4&amp;cad=rja&amp;uact=8&amp;ved=0CCcQFjADahUKEwjWkaTwpt3GAhVCWogKHWUFBbM&amp;;ei=XmimVdbqEsK0oQTlipSYCw&amp;usg=AFQjCNEmXIqemxa9hVhc8At5-IPLsxKTGg&amp;bvm=bv.97949915,d.cGU" target="_blank">Jared Fogle lawyers claim FBI found no evidence of child porno</a></li> </ul> <p>&nbsp;</p> <!-- google_ad_section_end --> Legal claim & allegation child pornography guilty plea Jared Fogle Subway Wed, 19 Aug 2015 04:08:22 +0000 Janet Sparks 14636 at Casual Dining Restaurants Gain Ground in Burger Wars <!-- google_ad_section_start --><div class="photoright"><img alt="" src="" style="width: 330px; height: 248px;" /> <div class="caption">Denny&#39;s new Thing Burger taps into Fantastic Four movie. Image/<a href="" target="_blank">TV commercial</a></div> </div> <p>CHICAGO&mdash;There is a battle for restaurant lunch visits that is being waged between casual dining restaurants and quick service restaurants. The weapon of choice? Hamburgers. According to a foodservice researcher, hamburgers have helped casual dining restaurants win lunch visits by closing their price gap with quick service restaurants.</p> <!--break--><!--break--><p>The ubiquitous hamburger has racked up 8.9 billion servings ordered at restaurants and foodservice outlets as of year ending June 2015, according to NPD. Hamburgers meet a wide variety of restaurant customers&#39; needs from simple and classic to high-end gourmet. The hamburgers perennial popularity, affordability, flexibility, and ability to provide a beef menu item while offsetting higher beef costs are among the reasons why this utility food has become the heavy artillery in the battle for lunch visits.</p> <p>For casual dining restaurants, burgers have been able to level the playing field with quick service restaurants on price. For example, the average price of a burger at casual dining is $9.02 and is $5.62 at fast casual. However, the gap closes when considering that fries typically come with a burger order at casual dining restaurants and need to be purchased separately at fast casual restaurants. The price of adding fries at a fast casual concept slaps on an average of $2.89 to the check, based on NPD&#39;s Checkout Tracking research. Consumers are increasingly judging that the 51 cent price difference is worth a full service sit down experience.</p> <p>How much so? Burger servings ordered at casual dining restaurants were up 3 percent in the year ending June 2015 period compared to year ago, and were the segment&#39;s only menu category to grow in servings. In contrast, burgers servings ordered at quick service restaurants were flat, reports NPD.</p> <p>The burger military offensive has gained casual dining restaurants lunch traffic ground from June of last year to June of this. Lunch visits to casual dining restaurants increased by 2 percent in the year period, the segment&#39;s first traffic increase at lunch in five years, based on NPD&#39;s CREST foodservice market research. Quick service restaurant lunch visits increased by 1 percent in the period compared to year ago.</p> <p>&quot;It is an effective strategy on the part of casual dining and other full service restaurants to menu more burger items,&quot; says Bonnie Riggs, NPD restaurant industry analyst. &quot;Successful casual dining operators offer burgers that meet the tastes of their customers and are priced competitively. As a result, they gain lunch visitors.&quot;</p> <!-- google_ad_section_end --> trends The NPD Group Tue, 18 Aug 2015 14:32:37 +0000 Don Sniegowski 14635 at Famous Dave’s Hopes Cornbread, Larger Portions, Will Help Turn Around Plummeting Sales <!-- google_ad_section_start --><div class="photoright"><img alt="Famous Dave's" src="" style="width: 330px; height: 221px;" /> <div class="caption">Cornbread muffins. Photo by <a href="" target="_blank">Steve A Johnson</a></div> </div> <p>MINNEAPOLIS &ndash; Faced with falling investor confidence, Famous Dave&#39;s of America&nbsp;Inc. (NASDAQ: DAVE) explains that it hopes to turn things around by serving&nbsp;larger food portions, reintroducing cornbread muffins and developing new leadership. </p> <!--break--><!--break--><p> Unfortunately&nbsp;in the same breath&nbsp;it also had to report that for its second quarter earnings ending June 28, 2015,&nbsp;same-restaurant sales for its 47 company-owned restaurants dropped 9.2 percent. At its 135 franchised restaurants, same-restaurant sales shrank by a more modest 3.3 percent.</p> <p>Famous Dave&#39;s revenues slid from $41.9 million to $37.4 million in the second quarter. That dug into the franchisor&#39;s net income, which slipped to $654,000 in the second quarter of 2015, compared to&nbsp;$2.9 million for the same period last year. Its cash flow margins at company-owned restaurants decreased 3.7 percent primarily as a result of the bad combination of growing food costs and declining restaurant sales.</p> <p>Wall Street has noted its troubles and taken action. Its stock price has lost 43 percent of its savor in the last 52 weeks as the barbecue chain has struggled with its sizzle. Zack&#39;s rating service advised investors to sell Famous Dave&#39;s. &quot;It could be time to get rid of the security before more losses hit your portfolio,&quot; Zack&#39;s warned.</p> <h3><img alt="Famous Dave's 2nd Quarter 2015 Results" src="" style="float: right; height: 330px; width: 382px; margin-left: 5px; margin-right: 5px;" /><span style="color:#800000;"><strong>Leadership merry-go-round </strong></span></h3> <p>After studying guest feedback, interim CEO Adam Wright sees the light. &quot;The past year has been difficult, but I am confident that as we continue to work together as partners, better days are in our future,&quot; he says.</p> <p>The light at the end of the&nbsp;tunnel comes after the&nbsp;chain&#39;s course reversal, put in place by Wright.</p> <p>&quot;Interim CEO&quot; seems a fitting title for the chief executive of the small barbecue chain of 184 restaurants sprinkled across 34 states. The franchising firm has burned through an average of <a href="">one CEO every two years since its 1994 founding</a>. In February 2014 <a href="">Ed Rensi</a> took the reins. The former CEO of McDonald&#39;s USA operations became Famous Dave&#39;s new interim CEO when its former CEO John Gilbert III resigned. Gilbert&#39;s earlier push of the brand had been into smaller fast casual barbecue shacks. With a top-down management style, interim CEO Rensi was not liked by Famous Dave&#39;s franchise owners. Rensi&#39;s solution to restaurant problems was to push for what he thought Millennials, consumers who reached adulthood around or after&nbsp;the year 2000, wanted in a barbecue joint &ndash; smaller plateware for smaller portions, leaner cuisine, as well as a menu expansion into barbecue tacos and flatbread pizza-like offerings. Franchisees balked and store sales came down. Rensi lasted until June of this year when Famous Dave&#39;s appointed its latest interim CEO, Adam Wright.</p> <p>It is not just Dave&#39;s chief executives who come and go quickly. The&nbsp;board of directors has also played&nbsp;its part in&nbsp;the merry-go-round. Dean Riesen, Famous Dave&#39;s chairman, stepped down in June. Last month, Riesen&#39;s replacement, then-chairman David John Mastrocola, was pushed out as private equity firm and shareholder Wexford Capital LP took over to try their hand at a turnaround. &quot;The prior chairman was replaced by one of the founding partners of Wexford Capital, the company&#39;s largest shareholder with almost 20 percent of the shares,&quot; said interim CEO Wright to analysts during an earnings conference&nbsp;last week. Wexford&#39;s president, Joe Jacobs, is the current chairman of Famous Dave&#39;s. A board seat was also added for Wexford. An independent director was brought in to audit the committee, replacing&nbsp;interim CEO Wright&nbsp;in his former position and task.</p> <p>One large multiunit barbecue franchisee, a competitor, who has been watching Famous Dave&#39;s for years, observes the brand has been all over the place. &quot;They&#39;ve slipped from a keen focus and understanding of their core products and value,&quot; says the barbecue restaurateur. He thinks the introduction of fast-casual outlets, tacos, nachos and smoked salmon on flat bread make Famous Dave&#39;s hometown pit barbecue confusing to consumers and franchisees.</p> <div class="photoright"> <script src="" type="text/javascript"></script><div id="wikichartContainer_5CCBCEC4-6FFA-D8D5-4C40-1F219C6D169F"> <div id="wikichartContainer_5CCBCEC4-6FFA-D8D5-4C40-1F219C6D169F_noFlash" style="width:400px; display:none;"><a href=""><img alt="Flash" src="" style="border-width: 0px;" /><br /> Flash Player 9 or higher is required to view the chart<br /> <strong>Click here to download Flash Player now</strong></a></div> </div> <script type="text/javascript">if (typeof(embedWikichart) != "undefined") {embedWikichart("","wikichartContainer_5CCBCEC4-6FFA-D8D5-4C40-1F219C6D169F","400","400",{"showNewsIcons":"true","partner":"wikinvest","ticker":"NASDAQ:DAVE","showAnnotations":"true","rollingDate":"5 days","embedCodeDate":"2015-8-11"},{});}</script><div style="font-size:9px;text-align:right;width:400px;font-family:Verdana"><a href="" style="text-decoration:underline; color:#0000ee;">View the full DAVE chart</a> at <a href="">Wikinvest</a></div> </div> <p>Judging from his statements, the new CEO is giving his all to refocus on the essentials of the brand. &quot;Right now our time and attention is focused on improving our core business,&quot; says Wright. The interim chief emphasizes how near and dear the brand has been to his heart and the importance of setting things right. &quot;I&#39;m born and raised in Minneapolis and have known founder Dave Anderson&#39;s family&nbsp;since the opening of the first store,&quot; states Wright, who has been a board member for 18 months and owns 6 percent of Famous Dave&#39;s outstanding shares.</p> <p>Founder Dave Anderson has not been involved with the management of his eponymous chain for over 12 years, although he has appeared in advertising as an icon of the brand. He had signed a gag and non-compete clause in March of 2014 stipulating that he could not disclose for a year that he had no association with the restaurant chain. He was also prohibited during the year&nbsp;from competing with Famous Dave&#39;s.</p> <p>The restrictions have lapsed.&nbsp;In an April interview with the Minneapolis&#39;&nbsp;Star Tribune, Anderson said, &quot;I have no connection with Famous Dave&#39;s at all.&quot; He is trying to create a fast casual chain of gluten-free barbecue shacks of his own.</p> <h3><span style="color:#800000;"><strong>Ch-ch-ch-ch-changes </strong></span></h3> <p>&quot;Over the last several quarters prior management made multiple changes,&quot; says interim chief Wright. &quot;The changes included smaller portions, different plateware and changes to iconic items such as corn bread muffins and other poor decisions,&quot; criticizes Wright of past CEO wrongs. Former CEO Rensi had not only downsized plateware, but also added tacos and pizza-like items. Traditional cornbread muffins were taken off the menu. &quot;Ultimately the significant changes made by prior management were not received well by our guests,&quot; says Wright.</p> <p>The&nbsp;multi-franchise owner from another logo observes that the brand is having a tough time making up its mind. The brand seesaws up one moment and then down the next. It pushed serving smaller portions last year, but then reversed that this year. It was excited about smaller fast-casual restaurants two years ago, when its mainstay, traditional casual diners, were put on the back burner. &quot;That&#39;s hard on franchise owners,&quot; says the barbecue restaurateur about the lack of consistency and long-term vision.</p> <p>The numbers seem to support that assessment. Famous Dave&#39;s restaurant outlets fell from 141 in June of 2014 to 135 as of June 29, 2015. Its company-owned restaurants dropped from 49 units on June 29 of last year to 47 at the end of this year&#39;s second quarter.</p> <p>Even in refranchising, the chain managed to take a hit. The company entered into an agreement to sell its Smithtown, New York company restaurant to a new franchisee. Unfortunately&nbsp;it incurred an &quot;asset impairment expense&quot; of approximately $925,000 in the sale.</p> <p>There is a glimmer of good news though. Famous Dave&#39;s chief executive told shareholders that bringing back cornbread muffins and&nbsp;using appropriate plateware while once again serving larger portions have already stimulated overall guest satisfaction by 7 percent. In addition&nbsp;it is testing a new whole muscle brisket.</p> <p>&quot;This new brisket product is as good as any,&quot; says Wright in his modest midwestern manner.&nbsp;</p> <p>The new muscle brisket must be smoked in-house daily for 12 hours before it can yield up its juicier, more flavorful taste. Starting this September, Famous Dave&#39;s will begin offering the item.</p> <h3><span style="color:#800000;"><strong>Franchisees lead </strong></span></h3> <p>&quot;Famous Dave&#39;s needs to focus on core execution, not just better tasting food and matching dinnerware,&quot; says the&nbsp;barbecue entrepreneur in reaction to the changes.</p> <p>In the August 5 earnings conference, Famous Dave&#39;s interim chief executive thought Famous Dave&#39;s franchisees could help him reverse the chain&#39;s southbound direction. He was thankful for the know-how of the franchise owner-operators. &quot;The past years have been difficult, but I&#39;m confident that as we [franchisor and franchisees] continue to work together as partners that better days are in the future,&quot; stated the CEO. One way the firm hopes to match its actions with its&nbsp;rhetoric is with the recent creation of an advisory committee of franchisees. &quot;We&#39;ve formed a committee with franchisees,&quot; said Wright. &quot;They have appointed their top people that they see from marketing their restaurants that will help us [the national brand] form a go-forward strategy.&quot; Wright called it a &quot;PR strategy&quot; for the brand.</p> <p>In contrast, competitor Sonny&#39;s BBQ has a franchisee advisory committee that for years has helped make national purchasing decisions, bringing down the cost of goods for its&nbsp;restaurants. Sonny&#39;s has a franchisee advisory committee for marketing to explore where its core products can stretch into new, but highly related, product offerings and where it shouldn&#39;t. It does even better: just as is the case with hamburger chain Carl&#39;s Jr., barbecue franchisor Sonny&#39;s has integrated the franchisees&#39; independent association to the point that they lead Sonny&#39;s&nbsp;advisory councils. Famous Dave&#39;s franchise owners have no independent franchisee association of their own, let alone&nbsp;independent association members leading the&nbsp;advisory council.</p> <p>That franchisee leadership structure has done well for Sonny&#39;s. For years it has had <a href="">higher store sales growth</a> than barbecue competitors Famous Dave&#39;s and&nbsp;<a href="">Dickey&#39;s</a>.</p> <p>&quot;I&#39;ve had over 5 percent restaurant sales growth this past quarter,&quot; says the confident Sonny&#39;s franchisee, providing only a brief anecdotal peek into the privately held system.</p> <p>In fairness to Famous Dave&#39;s, although its new advisory committee is not built to have the independence of thought that Sonny&#39;s does, nonetheless, it made a leap beyond on July 27. &quot;One of the company&#39;s strongest franchisees&quot; was brought in to fill a vacant seat on Famous Dave&#39;s board of directors, said Wright. California franchisee&nbsp;Mr. Anand Gala&nbsp;has been appointed to give strategic leadership and to make&nbsp;actual demands on the franchisor and its officers, not just provide his two cents in an advisory committee that the franchisor can tune out with little consequence.</p> <p>Will Wright be able to fix the wrongs when it comes to Famous Dave&#39;s? Time will tell. But this time around, one thing is for sure. He is building a system of franchise owner-operators who now will participate in not just advising, but also in directing the brand to build better restaurants.</p> <hr /> <p><strong>Related reading</strong>:</p> <ul> <li><a href="" target="_blank">Famous Dave&#39;s: Accuracy, the Twin Brother of Honesty</a></li> <li><a href="" target="_top">Shakeup at Famous Dave&#39;s Management and Board&nbsp;</a></li> </ul> <!-- google_ad_section_end --> food barbecue barbeque franchise Dickey's Barbecue Pit Famous Dave's of America franchise governance independent franchisee association Nasdaq:DAVE Sonny's Real Pit BBQ Tue, 11 Aug 2015 16:32:01 +0000 Don Sniegowski 14628 at Sonic Authorizes New $145 Million Stock Buyback Program <!-- google_ad_section_start --><p><img alt="Sonic sign" src="" style="width: 330px; height: 330px; margin-right: 5px; margin-left: 5px; float: right;" />OKLAHOMA CITY &ndash; Last week, Sonic Corporation (NASDAQ:SONC) announced that its board of directors has authorized a stock repurchase program for up to $145 million of its common stock through August 31, 2016.</p> <!--break--><!--break--><p>The nation&#39;s largest drive-in restaurant chain explained that share repurchases may be made from time to time in the open market or otherwise, including through an accelerated share repurchase program, &quot;under the terms of a Rule 10b5-1 plan, in privately negotiated transactions or in round lot or block transactions.&quot;</p> <p>Sonic CEO Cliff Hudson exclaimed, &quot;Our multi-layered growth strategy continues to generate ample cash to optimize shareholder value. Over the past three years, we have returned in excess of $252 million to our shareholders through the repurchase of 15.1 million shares of our common stock, or approximately 24 percent of our outstanding shares.&quot;</p> <p>Hudson explained that they believe that their dividend program complements the repurchase program, while providing an additional lever to deliver value to their shareholders. &quot;We remain confident as ever in our brand and business model and in their capacity to provide this ongoing return.&quot;</p> <p>Sonic completed its fiscal 2015 share repurchase program spending $105 million to repurchase more than 3.5 million shares of its common stock, at an average price of $29.68 per share. As previously announced, payment of a dividend of $0.09 per share is set for August 21, 2015 to shareholders of record as of the close of business on August 12, 2015.</p> <p>The Company also announced that its board of directors has approved the continuation of Sonic&#39;s quarterly cash dividend program. Beginning in the first fiscal quarter of 2016, it expects to declare a quarterly dividend of $0.11 per share of common stock, which represents an increase of 22% from the current quarterly dividend of $0.09 per share.</p> <p>Approximately ninety percent of Sonic&#39;s 3,500 locations are owned and operated by franchisees.</p> <hr /> <p><strong>Related Articles</strong>:</p> <ul> <li><a href="">McDonald&#39;s Stock Buyback Plan Aids Officers, Not Franchisees</a></li> <li><a href="">$750M Buyback Boosts Panera Bread&#39;s Stock, Not Growth</a></li> </ul> <!-- google_ad_section_end --> Wall Street stock buyback plan Mon, 10 Aug 2015 15:43:00 +0000 Janet Sparks 14626 at Papa John’s Warns Shareholders of Likely $12.3 Million Settlement; Now Done <!-- google_ad_section_start --><p><img alt="" src="" style="width: 330px; height: 330px; margin-right: 5px; margin-left: 5px; float: right;" />LOUISVILLE &ndash; Reporting its second quarter results, Papa John&#39;s International, Inc. (NASDAQ: PZZA) touted that its &quot;better ingredients, better pizza&quot; promise is resonating more than ever with loyal customers. </p> <!--break--><!--break--><p> The company said it is hopeful that in itself will differentiate its chain by enhancing the quality of its pizza.</p> <p>But one black cloud hoovering over Papa John&#39;s second quarter results is the company&#39;s announcement that it also recorded a pre-tax expense of $12.3 million for a preliminary legal settlement, subject to court approval.</p> <p>In the collective and class action lawsuit, Perrin v. Papa John&#39;s International, Inc. and Papa John&#39;s USA, Inc., approximately 19,000 delivery drivers alleged they were not reimbursed in accordance with the Fair Labor Standards Act (FLSA). Despite the possible settlement, Papa John&#39;s states that it continues to deny any liability or wrongdoing in the matter.</p> <h3><strong><span style="color:#800000;">Court Order in Lawsuit</span></strong></h3> <p>The legal settlement now appearing in Papa John&#39;s second quarter report for 2015, surrounds a complaint filed in August 2009 by Timothy Perrin, on behalf of himself and other similarly situated delivery drivers employed by Papa John&#39;s. It was filed in U.S. District Court for the Eastern District of Missouri.</p> <p>The driver claimed that Papa John&#39;s violated the Fair Labor Standards Act and the minimum wage laws of five states, Missouri, Arizona, Florida, Illinois and Maryland. All states mandate a higher minimum wage than that under federal law, and the pizza chain failed &quot;reasonably to approximate the delivery drivers&#39; automotive expenses for reimbursement purposes. That meant Papa John&#39;s failed to pay the minimum wage.</p> <p>The long, drawn out litigation resulted in a court order on December 31, 2013, which granted class certification for drivers in the five states. Notices were mailed to affected drivers in each state on April 30, 2014. Drivers who worked for Papa John&#39;s company-owned stores were advised not to remain in the class action. Drivers remaining in the class were told that they would be bound by the court judgment, win or lose, and would be eligible to participate if there was a settlement in the future. The matter was to go to trial in early 2015, &quot;as a class and representative action.&quot;</p> <h3><span style="color:#800000;"><strong>Papa John&#39;s settlement finalized with drivers</strong></span></h3> <p>In reviewing the Missouri district court docket today, Papa John&#39;s settlement with pizza delivery drivers has now been finalized.</p> <p>An order was filed on July 8, 2015, granting the drivers motion for summary judgment regarding Papa John&#39;s reliance on tips to achieve the minimum wage. Other motions for summary judgment were denied and granted in part on both sides, plaintiffs and defendants.</p> <p>After the Alternative Dispute Resolution conference was held on July 24, the judge stated the parties participated in good faith and achieved a settlement on August 3. The court then asked the parties to submit documents by September 8, to have the case dismissed. The exact amount of the settlement is not known at this time.</p> <p>Stueve Siegel Hanson and Weinhaus &amp; Potashnick were appointed by the court to represent the drivers in the class action litigations. Ogletree and Deakins in Kansas City are the lead counsel for Papa John&#39;s International.</p> <p>In spite of having to report the preliminary $12.3 recorded legal settlement, Papa John&#39;s founder, chairman and CEO John Schnatter was happy with the results. &quot;We are pleased to have maintained our excellent sales momentum and completed another successful quarter,&quot; he stated.</p> <hr /> <p><strong>Related Reading</strong>:</p> <ul> <li><a href="">Papa John&#39;s Collective Action Lawsuit for Delivery Drivers</a></li> <li><a href="">Perrin v. Papa John&#39;s International, Inc.</a></li> <li><a href="">Papa John&#39;s Announces Second Quarter 2015 Results</a></li> </ul> <p>&nbsp;</p> <!-- google_ad_section_end --> Legal judgment & dispute resolution Mon, 10 Aug 2015 15:03:30 +0000 Janet Sparks 14625 at