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Vazquez v. Jan-Pro Franchising International, Inc.

United States Court of Appeals, Ninth Circuit

September 24, 2019

Gerardo Vazquez, Gloria Roman, and Juan Aguilar, on behalf of themselves and all other similarly situated, Plaintiffs-Appellants,
v.
Jan-Pro Franchising International, Inc., Defendant-Appellee.

          Argued and Submitted December 18, 2018 San Francisco, California

          Appeal from the United States District Court No. 3:16-cv-05961-WHA for the Northern District of California William Alsup, District Judge, Presiding.

          Before: Ronald M. Gould and Marsha S. Berzon, Circuit Judges, and Frederic Block, District Judge. [*]

         ORDER CERTIFYING QUESTION TO THE CALIFORNIA SUPREME COURT

         SUMMARY[**]

         Certified Question to the California Supreme Court

         The panel certified the following question of state law to the California Supreme Court:

Does Dynamex Operations West Inc. v. Superior Court, 416 P.3d 1 (Cal. 2018), apply retroactively?

          ORDER

         We ask the California Supreme Court to resolve an open question of California state law and certify the following question: Does the Court's decision in Dynamex Operations West Inc. v. Superior Court, 416 P.3d 1 (Cal. 2018), apply retroactively? Our phrasing of the question should not restrict the Court's consideration of the issues involved. The Court may rephrase the questions as it sees fit in order to address the contentions of the parties. If the Court agrees to decide this question, we agree to accept its decision. We recognize that the Court has a substantial caseload, but we submit this question in the interests of comity and because of its significance for California labor law and California businesses.

         I

         This case dates back more than a decade. We provide background on the parties, their dispute, the procedural history of the case, and their contentions on appeal to frame the question we are certifying.

         A

         Defendant-Appellee, Jan-Pro International Franchising, Inc. ("Jan-Pro") is a company headquartered in Georgia. It licenses a system for marketing cleaning services to "regional master franchisees, " in multiple countries, including the United States. Regional master franchisees purchase franchises for exclusive operations in a given regional area.

         Regional master franchisees, in turn, are franchisors to "unit franchisees." Regional master franchisors[1] advertise cleaning services within the geographic region covered by the franchise, provide bids to potential customers, and process payments. Unit franchisees are given the option to accept or reject these bids; for any bids they accept, they perform the actual cleaning under the "Jan-Pro" name. Unit franchisees are also allowed to solicit their own accounts. After royalties and other fees are deducted for Jan-Pro and the regional master franchisor, the balance is remitted to the unit franchisee. Regional master franchisors also offer "business and management services" to unit franchisees, including training, "assistance with customer relations" (which includes finding a substitute unit franchisee if a scheduled unit franchisee is unable to fulfill a contract), and invoicing. Some regional master franchisors provide cleaning supplies to their unit franchisees.

         Jan-Pro is not party to any contract with unit franchisees. Jan-Pro contracts with the master franchisors, who then contract with unit franchisees. Unit franchisees may hire their own ...


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