Darryl Williams v. Jani King of Philadelphia Inc
837 F.3d 314
| 3rd Cir. | 2016Background
- Jani-King, a national commercial-cleaning franchisor, requires franchisees to sign uniform franchise, policy, and training documents, pay fees, undergo training, buy/maintain equipment/insurance, and follow detailed operational standards; Jani-King solicits and contracts with customers and handles invoicing, then offers accounts to franchisees who may accept or reject them.
- Two Philadelphia-area franchisees sued on behalf of ~300 local franchisees under the Pennsylvania Wage Payment and Collection Law (WPCL), claiming they were misclassified as independent contractors and therefore entitled to WPCL protections.
- The District Court granted class certification under Federal Rule of Civil Procedure 23(b)(3); Jani-King appealed under Rule 23(f), arguing predominance and that resolution requires individualized inquiries and that franchising system controls should be excluded.
- The Third Circuit reviewed whether the common documentary evidence (the franchise agreement and manuals) and representative testimony could resolve the central employee-vs.-independent-contractor question class-wide using Pennsylvania’s multifactor test (with the right-to-control factor paramount).
- The majority held the class certification was not an abuse of discretion because the common documents address the dominant right-to-control factor and many secondary factors, making the WPCL misclassification claim susceptible to class-wide proof; the court declined to decide the merits.
- A dissent argued franchise system controls (those needed to protect trademark/goodwill) are categorically different and generally insufficient alone to show an employment relationship, so individualized proof predominates and class certification was erroneous.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether employee status under WPCL can be determined class-wide | Franchise agreement/manuals and representative testimony provide common evidence of franchisor's right to control, satisfying predominance | Determination requires examination of the entire relationship and individualized proof; documents alone are insufficient | Held: Predominance satisfied — common documents can permit class-wide resolution of status (no merits decision) |
| Role of "right to control" factor | Right to control (not actual exercise) is central and can be shown via common documents | Argues actual practice matters and labels/documents aren’t dispositive | Held: Pennsylvania law emphasizes the right to control; documents may show that right and are probative for class certification |
| Whether franchise-system controls should be treated specially | Plaintiffs: system controls are probative of employer status like any other control factor | Jani-King/amicus: system controls primarily protect trademark/goodwill and should be excluded or discounted; franchisors shouldn’t be treated as employers for routine brand controls | Held: No categorical exclusion — franchise controls are regular factors under Pennsylvania law and may be considered; remand merits not resolved |
| Whether certification required a merits ruling now | Plaintiffs: rigorous analysis is required but not a merits determination; documents suffice for certification inquiry | Jani-King: court must decide merits-level question about effect of system controls before certifying | Held: Court may consider merits-related evidence to the extent relevant to Rule 23, but should not decide the case’s merits at certification; certification affirmed |
Key Cases Cited
- Drexel v. Union Prescription Ctrs., 582 F.2d 781 (3d Cir. 1978) (franchise controls are relevant; whether they create an employment relationship depends on nature/extent of control)
- Universal Am-Can, Ltd. v. Workers’ Comp. Appeal Bd., 762 A.2d 328 (Pa. 2000) (right to control is a dominant consideration in employee–independent contractor analysis)
- Green v. Independent Oil Co., 201 A.2d 207 (Pa. 1964) (where documentary terms are undisputed, the relationship may be decided as a matter of law)
- In re Hydrogen Peroxide Antitrust Litig., 552 F.3d 305 (3d Cir. 2008) (predominance inquiry depends on the nature of the evidence and overlap with merits; reviews certification for abuse of discretion)
- Morin v. Brassington, 871 A.2d 844 (Pa. Super. Ct. 2005) (WPCL employee definition analyzed using multifactor test drawn from unemployment/workers’ compensation cases)
- Jones v. Century Oil U.S.A., Inc., 957 F.2d 84 (3d Cir. 1992) (actual practice can be crucial where written labels conflict with evidence of control)