Court rules Jimmy John’s not a joint employer

Sandwich shop franchiser Jimmy John’s L.L.C. and other of its corporate entities are not joint employers with its franchisees, says a district court, in a long-running Fair Labor Standards Act case filed by plaintiffs who have worked as assistant managers in the company’s franchisee stores.

The U.S. District Court in Chicago granted Champaign, Illinois-based Jimmy John’s motion for summary judgment on the joint employment issue in the case, In Re: Jimmy John’s Overtime Litigation. The plaintiffs, who have been conditionally certified as a class by the court, charged they were improperly classified as ineligible for overtime. The ruling was issued June 14, but only placed on the court’s docket Tuesday.

The court has not yet ruled on the FLSA issue.

“Jimmy John’s has established that it does not: (1) have the power to hire or fire franchise employees; (2) supervise and/or control employee work schedules or conditions of payments; (3) determine the rate and method of payment or (4) maintain employment records for franchise employees,” said the ruling.

“Moreover, any control that Jimmy John’s does exert is related to Brand Standards,” policies intended to ensure quality and consistency, “which Jimmy John’s is entitled to enforce and protect through compliance measures against the franchisees,” said the ruling, in granting Jimmy John’s motion for summary judgment on the joint employer issue in the case, which was first filed in July 2014.

A footnote to the ruling states the motion concerns only whether Jimmy John’s is a joint employer of its franchisees’ employees and does not consider the merits of the alleged FLSA violations. “Instead, we are only analyzing whether Jimmy John’s could be deemed Plaintiff’s joint employer and thus may be held liable under the FLSA,” the footnote said.

In December, the 7th U.S. Circuit Court of Appeals in Chicago overturned the lower court and held that plaintiffs in the case did not have to wait until litigation against the corporate entity concluded to pursue their own cases.

Meanwhile, National Labor Relations Board Chairman John F. Ring said in a letter to three U.S. senators this month that the agency plans to issue a proposed rule on the controversial issue of joint-employer status no later than this summer.