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Jimmy John’s FLSA franchisee lawsuits can proceed

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Plaintiffs who have filed Fair Labor Standards Act litigation against franchisees of Jimmy John’s L.L.C. will not have to wait until litigation against the corporate entity is concluded to pursue their own cases, says a federal appeals court, in reversing rulings by a lower court.

Plaintiffs had filed a now-consolidated lawsuit on behalf of all assistant managers nationwide of the Champaign, Illinois-based sandwich retailer, according to Thursday’s ruling by the 7th U.S. Circuit Court of Appeals in Chicago in In Re: Jimmy John’s Overtime Litigation.

Although most of the plaintiffs work in stores owned by franchisee, they claim Jimmy John’s is their joint employer, said the ruling.

Two years after this litigation was filed, plaintiffs also filed separate lawsuits against their franchise employers in federal district courts across the country asserting the same claims.

Jimmy John’s moved to enjoin these plaintiffs from pursuing their lawsuits against the franchisee employers until their claims against the corporate entity were resolved, according to the ruling. The U.S. District Court in Chicago eventually enjoined plaintiffs in 13 lawsuits in 12 federal District Courts from proceeding with their litigation.

A three-judge appeals court panel unanimously overturned the lower court’s rulings. Jimmy John’s had argued the anti-suit injunction was necessary “to prevent duplicative litigation, avoid inconsistent rulings, and protect the district court’s pretrial orders regarding discovery and notice procedures. These arguments are unavailing,” said the panel’s ruling.

“At bottom, this argument amounts to nothing more than fear that the District Courts presiding over the franchisee cases might reach a final decision on the merits before this case, or, at the very least, make legal determinations that could affect the present litigation,” said the panel, in overturning the lower court’s ruling.

On Thursday, the National Labor Relations Board overturned its joint-employer Browning-Ferris Industries of California Inc. ruling.