From time to time DDIFO is pleased to present Guest Commentary from valued contributors. Guest commentaries feature the views and opinions of the contributor and are not necessarily the opinions of DDIFO and it’s Board of Directors. The following is an article written and submitted by Nathan L. Kaitz, whi is an attorney with Morgan, Brown & Joy, LLP.  Nathan may be reached at (617) 523-6666 or at nkaitz@morganbrown.com. Morgan, Brown & Joy, LLP focuses exclusively on representing employers in employment and labor matters

The Massachusetts Senate (No. 1073) and House (House Bill 1398) are, for at least the third year in a row, considering bills which would require all Massachusetts employers to provide employees with paid sick leave.  These bills were recently endorsed by the Secretary of Labor and Workforce Development, Joanne Goldstein, and appear closer to passage than ever before.

Under the terms of both bills, employees would accrue one (1) hour of paid sick time for every thirty (30) hours worked up to a maximum of seven (7) paid sick days.  These days could be used to care for the employee’s physical or mental illness, to care for the employee’s child, spouse, parent, or parent of spouse, to attend to routine medical appointments for the employee or his/her child, etc., or to address the psychological, physical or legal effects of domestic violence.  Paid sick days may be carried over provided that an employer is not required to allow accumulation of more than seven (7) paid sick days at any given time.

The bills also prohibit an employer from taking any adverse action against an employee because the employee (1) exercised or attempted to exercise rights under the statute; (2) opposed practices believed to be in violation of the statute; or (3) supported the exercise of rights of another under the statute.

For employers with collective bargaining agreements, the bill would become effective on the earlier of the date of termination of that agreement or twelve (12) months after promulgation of regulations by the Attorney General.  For other employers, the bill takes effect ninety (90) days after its passage.

MBJ will continue to monitor these bills and other important legal initiatives facing employers.

John Motta has a passion for politics. The Chairman of the new Dunkin’ Donuts Franchise Owners Federal Political Action Committee (DDFO FedPAC) has never run for office, nor does he plan to. Motta operates a 20-store network in New Hampshire and Virginia; he’s been a Dunkin’ franchisee since 1980.  But, his passion is quite evident when he talks about the political efforts for which he’s volunteered.

“I like being in the mix and I’ve always been there in the background. I helped support Kelly Ayotte’s successful campaign for the US Senate in New Hampshire.  In my home town of Nashua, I was appointed to the Parks and Recreation Committee and was appointed as the Chairman of The Ethnic Festival in Nashua. I was also on the fundraising committee for the new high school athletic fields,” said Motta.

That effort was so successful, the city actually named the football field for him. Teams from three high schools – Nashua High North, Nashua High South, and Bishop Guertin High – now play their home games on Motta Field.

With the creation of DDFO FedPAC, Motta will be playing on a bigger field.

New federal laws and regulations – ranging from healthcare to financial reform – affect profitability for franchise owners across all quick service restaurant systems. Franchisees face the continual challenge of alerting federal lawmakers to the impact new laws and regulations have on their businesses and their ability to create jobs, support community efforts and continue investing in the local economy.

“We repeatedly find that government officials do not understand either the nature of the franchise relationship or that Dunkin’ Donuts are virtually 100% independently owned. We’ve been able to put the face of a local, small business owner on our stores as opposed to a faceless corporation that is not a voting constituent in their district. It really does make a difference to government officials when they understand they are regulating a small business owner.” said Rob Branca, chairman of the Massachusetts Political Action Committee, DDFO MassPAC.

Motta says franchise owners across the country are feeling more government interference on issues like menu labeling, credit card fees and immigration reform. “We feel it’s the right time to organize ourselves and be able to support politicians and groups that will work on our behalf.”

The DDFO FedPAC will raise money to support legislators who are supportive of the small business issues that are important to franchise owners in all parts of the country.

Misty Chally, deputy executive director for the Coalition of Franchisee Associations (CFA) and a lobbyist in Washington, D.C., says through the CFA, Dunkin’ Donuts franchise owners have done an excellent job of increasing their visibility on Capitol Hill and the creation of a federal political action committee is the right next step towards getting more involved.

“These are not easy economic times for franchisees; it’s critical to have representation here. The more people understand how what happens in Washington affects their businesses back home, they will start to donate and participate,” said Chally. “Dunkin’ Brands has a strong lobbyist down here but, it’s important to distinguish the franchise owners from the Brand. There are times the two sides will not be aligned.”

Branca says one of the lessons he’s learned in the year since the launch of the DDFO MassPAC is the importance of identifying the right issues and the right candidates to support.

“You need to select those that you can master and where it is possible to make a favorable change or prevent an unfavorable change.  For candidates, you must select those in the middle that have the power to sway a vote or the wording of a regulation.”

On the federal level, Motta admits, that can be an even bigger challenge. “We have to make sure the issues we identify are ones that impact all franchise owners. I think it’s really important that we have input from franchise owners in all the different regions of the country.”

To accomplish that, Motta has assembled a volunteer board of directors which includes: Jim Cain from New York, Arun Mandi from New Jersey, Scott Ball from Florida, Joe White from Ohio, Branca and DDIFO President Jim Coen.

“Coen was a huge help getting this thing going,” said Motta. “I had tried for a couple of years to start the PAC but it wasn’t until I got Jim involved that it started happening.”

His position as chairman of a PAC may be new, but Motta’s knowledge of politics isn’t. He knows things can move slowly and that raising money can be challenging. He has set out realistic expectations for the PAC’s inaugural year.

“I feel confident we can raise a war chest of $100,000 or more in the first year and get at least 50% of all franchisees to make a contribution,” said Motta. “That will be a success.”

Employers’ payments finance the trust fund that pays unemployment benefits to the state’s jobless. The rates would have risen as much as 40 percent in March as Massachusetts takes steps to keep the fund solvent. Instead, the fund will take interest free loans from the federal government to make up shortfalls resulting from the freeze.

Patrick signed legislation approving a plan to defer the cost increases for business. In a press release, he said the move would save businesses $402 million this year, or an average of $228 per employee.This is the second year in a row Patrick has signed legislation enacting a freeze.

State’s typically exhaust unemployment trust funds during economic downturns, particulalry when they last long, as this one has. The money borrowed is repaid as the economy improves and the fund replenished as the fewer workers lose jobs and collect benefits.

He writes about the new marketing campaign:

Dunkin’ Donuts launched a multimillion-dollar national marketing campaign yesterday that features everyday Joes drinking its iced and hot coffee drinks.

The new campaign, which includes print, TV, and digital ads, is the chain’s latest effort to one-up its biggest rivals, Starbucks and McDonald’s, in the java wars. The ads mostly feature everyday people who were picked as part of a nationwide casting call in November, which drew 1,000 people.

Among the ads’ pitchmen are two firefighters from Georgia who, when asked, “What are you drinkin’?’’ respond: “I’m drinkin’ Dunkin’.’’

Dan Saia, vice president of consumer engagement at Dunkin’ Donuts, a unit of privately owned Dunkin’ Brands Inc. in Canton, said the campaign is designed to let real customers tell the Dunkin’ Donuts story.

He writes about “Tip pooling”:

Separately, advocates for a “tip pooling’’ bill that would change the way tips are pooled at quick service restaurants, such as Dunkin’ Donuts, have one more chance today to get the Massachusetts state Legislature to work on new language that would clarify the law regarding what types of employees can share in the proceeds of tip jars that are fixtures on counters of many Dunkin’ Donut franchises.

The bill, backed by a group of Massachusetts Dunkin’ Donuts franchisees, would allow shift supervisors, or crew leaders, who often wait on customers, to share in the collected tips.

As it stands, the law is ambiguous on whether crew leaders are managers, and hence ineligible to share tips.

Yesterday, the bill was sent to the Senate after the House adopted an amendment offered by Governor Deval Patrick that refined the definition of manager, but state Senator Steven A. Tolman of Brighton objected to considering the bill in an informal session.

During informal sessions, a single objection is enough to stop consideration of a bill. Today is the last day the tip pooling bill can be considered before it has to be refiled in the next session, which starts tomorrow and would entail starting the process all over again.

Tolman, who also objected to the bill when it came up in an informal session last Thursday, said the bill “is of a magnitude that it should be considered in full formal session, where it can be debated, and where there would be the potential for a roll call vote.’’

Jim Coen, president of Dunkin’ Donuts Independent Franchise Owners Inc., an organization that represents the business interests of Dunkin’ Donuts franchisees, said the bill “is simply an attempt to help our hardworking crew leaders get a share of the tips they deserve.’’

In recent years, quick service restaurants, including Dunkin’ Donuts, have been sued by employees who contend that tips are being shared illegally with managers. Coen said that a new law is necessary to help clarify exactly which employees should be classified as managers.

“Because crew leaders do not have the authority to hire and fire and they actively participate in the service of customers, they are not part of management,’’ said Coen, who added that if the bill is not passed today, a new version will be introduced later this year.

Michelle King, a spokeswoman for Dunkin’ Brands, said any policies regarding tipping are made by franchise owners.

Read more at: The Boston Globe

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en Affleck and Rebecca Hall with their Dunkin' in a scene from "The Town"

“If you go, hit the Bunker Hill monument first.”

Ben Affleck is talking about home — Boston.

“There are bars — I’m not naming names — down on the main strip, where guys have been known to get stabbed. And the projects are on the other side.”

He’s not talking about the Boston of Paul Revere, Old Ironsides and the Red Sox.  Affleck is relating the sights in that part of Beantown — just a mile and a half from where he grew up — where he has filmed two movies. The rough “brown bag” as Affleck calls it  neighborhood of Charlestown was the setting for “Gone Baby Gone” and Affleck’s second film as director, “The Town,” which opens Friday.

“The Town is a weird place to be a tourist. Unless maybe you’re a crime tourist. Aside from that,” Affleck chuckles, “it don’t take long to drive around Charlestown.”

As “The Town” (based on a Chuck Hogan cq novel “Prince of Thieves” points out, Charlestown is known for its bank and armored-car robbers, where the profession is passed down father-to-son. Affleck was drawn to the “rabbit warren” streets and the “clannish society” where nobody rats anybody out. Affleck, who grew up in nearby Cambridge, may not have known any bank robbers. but he knew where to find them. And he knew the lay of the land.

“If you’re already from a place, you’re ahead of the game. Your life has already done a lot of the work for you,” he says. “If I were to make a movie in Orlando or Little Rock or Phoenix, tell a story about people who grew up there, I’d have to go down there six months ahead of time. You have to immerse yourself, listen to how people talk, hear their stories, drive around their town.”

Affleck interviewed some bank robbers in prison, “and guys I’d talk to would say, ‘We did this robbery in the North End,’ and I hear that and I think ‘cinematic — old Italian neighborhood, narrow streets, distinctive restaurants you can shoot in.”

And knowing the city, he’d pepper “The Town” with details. “You’ve got to have a scene where some characters are in a Dunkin’ Donuts. … Somebody from out of town sees that and goes, ‘Dunkin’ Donuts?’ But if you grew up there, you know that Dunkin’ is the heart and soul of the city. EVERYbody gets coffee there, all day long. It’s not a Starbucks town.”

Read more at Roger Moores Blog: Frankly My Dear

Denise Lavoie of THE ASSOCIATED PRESS reports in the Worcester Telegram that property owners may be held liable for snow-related injuries whether the accumulations are caused by Mother Nature or by snowplows, the state’s highest court ruled yesterday in a far-reaching decision that lawyers said could result in a wave of personal injury lawsuits.

In its ruling, the Supreme Judicial Court eliminated a long-held distinction in state law between “natural” and “unnatural” accumulations of snow and ice.

For more than a century, case law in Massachusetts held that property owners who failed to remove natural accumulations could not be held liable. But the court found that owners have a duty to keep property reasonably safe.

“The biggest effect is that people who have suffered injuries as a result of the negligence of the landowner will be able to seek compensation, even in cases where the snow or ice accumulated naturally,” said David White, a Boston personal injury lawyer.

“The other effect is that landowners will probably be more cautious now and treat their ice and snow,” White said.

The court ruled in the case of Emanuel Papadopoulos of Peabody, who broke his pelvis in 2002 when he slipped and fell on a patch of ice in the parking lot of the Liberty Tree Mall in Danvers in front of a Target department store.

The parking lot had been cleared, but a pile of snow had been plowed onto a median strip.

After leaving the store to return to his car, Papadopoulos slipped on ice on the pavement.

A judge found that whether it was a chunk of ice that had fallen from the median or a patch of refrozen runoff from the snow pile, the ice that caused his fall was a “natural accumulation.”

The judge granted a motion by Target and Weiss Landscaping Co. Inc., the snow removal contractor, to dismiss the lawsuit, citing Massachusetts case law that found that a property owner cannot be held liable for failing to remove natural accumulations.

The Supreme Judicial Court rejected the rationale behind those earlier court rulings — that a natural accumulation of snow or ice is not a defect that a property owner has a duty to repair.

“We now will apply to hazards arising from snow and ice the same obligation that a property owner owes to lawful visitors as to all other hazards: a duty to ‘act as a reasonable person under all of the circumstances including the likelihood of injury to others, the probable seriousness of such injuries, and the burden of reducing or avoiding the risk,’ ” Justice Ralph Gants wrote in the unanimous ruling.

The court said the new rule will apply retroactively to pending lawsuits. It sent the Papadopoulos case back to the lower court to reconsider its ruling dismissing his lawsuit.

Papadopoulos’ lawyer, Emmanuel Papanickolas, praised the ruling, saying it imposes a responsibility on property owners “to make a reasonable effort to remove the snow and the hazards of freezing snow and ice.”

“The jury decides what’s reasonable,” he said. “It’s a great decision for the state of Massachusetts. It’s in the interest of public safety.”

Read more: Worcester Telegram

Attorney Eric Karp

Attorney Eric H. Karp of Witmer, Karp, Warner & Ryan, LLP, a Boston-based law firm where he specializes in the representation of franchisee associations, says retaliation has been declining within most franchise systems for two main reasons.

The first is the growth in existence of franchisee associations. Unlike DDIFO, which was formed in 1989, many franchise associations have begun forming just in the past decade as franchising has become more common. More Franchisors have grown accustomed to the existence of independent franchisee associations this their systems, and the more enlightened ones will take advantage of the opportunity to collaborate with them,

The second reason Karp believes retaliation appears to be waning is traceable to the 2007 Federal Trade Commission (FTC) mandate that the existence of a franchise association be included in Franchise Disclosure Documents. The FTC said franchisors must, “Disclose, to the extent known, the name, address, telephone number, email address, and Web address (to the extent known) of each trademark-specific franchisee organization associated with the franchise system” for all prospective franchisees.

“One of reasons disclosure is so important is that they are a legitimate source of information about a system for a potential franchise owner. They teach you about the culture of a system,” said Karp. “The FTC’s regulation was fought by the franchisor community because it provides a stamp of approval on the existence of franchisee associations.”

Yet, many franchisees who organize new associations feel they are targeted by their franchisors—even if they can’t prove it. As Karp points out, there is still a minority of systems which believe in what he calls “power franchising”—another name for strong-arm tactics.  On the other hand, in 2004 Karp presented to the American Bar Association Forum on Franchising a study of the six known court decisions in which franchisees claimed to have been terminated, harassed, intimidated and/or retaliated against by reason of their affiliation with a franchisee association. The score was six wins for the franchisees; three substantial verdicts in their favor and three franchisor motions for summary judgment denied. 

Karp is quick to point out that in the Dunkin’ system, fear of retaliation seemed to diminish after former Chief Legal Officer Steve Horn resigned.

“Horn represented unenlightened leadership. System governance through litigation is not a recipe that motivates franchisees to reinvest in the system,” said Karp.

Today 13 states, not including Massachusetts where Dunkin’ Brands is incorporated, have laws that formally protect the rights of franchise owners to freely associate. In addition, several state courts have reaffirmed that right.  The oldest relevant case dates to 1979 where owners of AAMCO Transmission franchises in Michigan were found, “like all other persons in the United States [to] enjoy the right pursuant to the First Amendment of the United States Constitution to assemble, subject only to those exceptions specifically provided by the statute.”

According to Karp, franchise owners who choose to belong to an association—whether it is formally recognized by the franchisor or not—are part of a protected class, based on the actions of state and federal court judges and juries.

Karp says instances when organizers of new franchise associations have been sued, harassed or discriminated against are rare and don’t fit the maturing business culture surrounding franchising, which rewards long-term growth.

And, because there is often greater change among system owners and mangers than among franchise owners, companies that purchase franchise systems are increasingly recognizing the need to tap the institutional knowledge of the franchisees.

“There’s a growing realization that the only way to deal with competition in the marketplace is to establish a cooperative, collaborative and mutually respectful relationship with the independent franchisee association.”

Statutory amendments

• Nursing Mothers Entitled to Reasonable Break Time.  The federal health care reform legislation enacted by President Obama on March 23, 2010 contains an amendment to the federal Fair Labor Standards Act requiring employers to provide nursing mothers with reasonable break time, as needed, to express breast milk during the first year after her child’s birth.  Covered employers are also required to provide their employees with a private place, other than a bathroom, in which to take these breaks.  Employers are exempt from these requirements if they have fewer than 50 employees and if providing the breaks would constitute an undue hardship by causing significant difficulty or expense.  Pursuant to this amendment, employees need not be compensated during this break time; however, employers should note that the Fair Labor Standards Act regulations provide that short breaks between 5 and 20 minutes must be counted as time worked (and paid), but based on the language of the amendment, it appears that Congress intended that these breaks be an exception to these general regulations and that the time need not be counted as time worked or paid.  In addition, with respect to the exemption based on undue hardship, the amendment does not state who is to make the determination whether providing the breaks would constitute an undue hardship.  Regardless of this particular amendment, in light of a 2007 Massachusetts Appeals Court decision in which the Court acknowledged that “any condition premised on a pregnancy-related condition constitutes sex discrimination,” and identified breastfeeding as a “post-pregnancy condition,” employers should carefully consider any request for accommodation by breastfeeding employees because failure to comply with the amendment my trigger a claim of gender discrimination.

• COBRA Premium Reduction Period Extended.  On April 15, 2010, President Obama signed into law a further extension of the COBRA premium subsidy legislation to extend the time period for a qualifying event through May 31, 2010 (e.g. an involuntary termination occurring up through May 31, 2010).  As a result, employees who are otherwise eligible for COBRA continuation coverage as a result of their losing their group health insurance coverage as a result of an involuntary termination between March 2, 2010 and May 31, 2010, will be eligible to elect COBRA continuation coverage and  pay just 35% of the COBRA premium for up to 15 months.  This extension does not affect the maximum periods of COBRA continuation coverage nor does it extend beyond the 15-month maximum period for the premium subsidy.  President Obama has urged lawmakers to pass legislation to extend the COBRA premium subsidies to employees laid off through the end of the year, which is currently pending.

• Updated Identity Theft Regulations Tailored to Small Employers.  In response to the concerns of small businesses regarding the Massachusetts identity theft regulations, the Office of Consumer Affairs and Business Regulation has released updated regulations that took effect March 1, 2010.  The regulations make clear that the approach to data security is a risk-based approach.  Under this risk-based approach, a business, in developing a written security program, should take into account its size, nature of its business, the kinds of records it maintains, and the risk of identity theft posed by its operations.

• Misclassification is on the federal DOL radar screen.  As we in Massachusetts are aware, misclassification of workers as independent contractors can have a significant and potentially expensive impact upon employers and their officers and managers.  This is because of the Massachusetts statute creating a presumption that workers are employees and setting out strict factors to be proven by the employer where it seeks to classify a worker as an independent contractor.  In addition, liability for misclassification includes mandatory triple damages and mandatory attorney’s fees, as well as individual exposure with respect to the employer’s officers and managers, even where the employer is a corporation (as a result of which, typically, its officers and managers have no personal liability for acts of the corporate entity).  The federal Department of Labor (“DOL”) is now focused on the misclassification issue, emphasizing it as an important item in its ongoing 2010 enforcement strategy.  Among other things, the DOL strongly supports legislation recently introduced at the federal level regarding the issue of misclassification.  In a recent statement, the DOL’s Secretary of Labor identified that one of her goals in supporting the misclassification legislation is to secure minimum and overtime wages and to help middle class families remain in the middle class, with the issue of misclassification being key to attaining those goals because misclassification of employees as independent contractors deprives employees of critical workplace protections and employment benefits to which they are legally entitled.  Now, more than ever, employers must analyze their workforce and the classifications of their workers to insure compliance with the Massachusetts law and protect against potentially costly, personal liability.

Case Law Updates

• Suit for Failure to Hire Based on Applicant’s Nicotine Use Dismissed.  Last summer, the District Court of Massachusetts granted summary judgment for an employer dismissing the claim of an applicant who was not hired after he tested positive for nicotine.  Rodrigues v. EG Systems raises two important issues.  Firstly, where an employer makes the job offer contingent upon a satisfactory drug screening, even if the individual begins work, he or she will not necessarily be considered an employee.  Rodrigues’s ERISA claim failed because the employer’s health plan included carefully defined eligibility requirements which excluded those to whom only a conditional job offer had been made.  The second issue raised by this case was whether the employer’s discovery of nicotine in the applicant’s system constitutes an invasion of privacy.  Here, Rodrigues smoked in public and made his use of nicotine known to his employer by having a pack of cigarettes visible in his car, thereby defeating his invasion of privacy claim.  Remarkably, Rodrigues did not challenge the test itself as being an invasion of privacy so there was no determination as to whether the testing for nicotine use (lawful, off-the-job behavior which arguably does not affect job performance) constitutes an invasion of privacy.  This case demonstrates that employers conducting drug screening should (1) carefully review their benefit plans to ensure that the eligibility criteria are clearly defined and (2) be mindful that the circumstances under which Massachusetts courts have found that drug testing constitutes an invasion of privacy is very fact specific and still developing.

• Maximum Age Restriction Deemed Unconstitutional.  The Montana Supreme Court held that a statute requiring that firefighters not be more than 34 years of age at the time of their initial appointment was unconstitutional.  Although this decision is not controlling in Massachusetts, it is interesting as generally age claims are brought under federal and/or state anti-discrimination laws which, under the Massachusetts age discrimination statute and the federal Age Discrimination in Employment Act, protect only those age 40 and older.  In finding that the age requirement was wholly arbitrary because there was no factual or empirical basis, the Montana Supreme Court ruled that the state had violated the Montana equal protection clause.  The Massachusetts Constitution’s equal protection clause is not drafted identically to that of Montana; however, employers should carefully consider whether an age restriction is a bona fide occupational qualification with a rational basis.

• Employee Manual Deemed an Implied Contract.  The Appellate Division of the Massachusetts District Court recently upheld a decision that serves to remind employers that an employee manual will, in certain circumstances, be treated as an implied contract between the employer and the employees.  In Buttrick v. Intercity Alarms, LLC, the lengthy employee manual included a progressive discipline policy which Intercity Alarms failed to follow when terminating Buttrick’s employment (resulting in a $41,888 award to Buttrick).  During the trial, Buttrick testified that he was required to sign the non-competition agreement in the manual, and he believed he was bound by the manual.  Before issuing or amending an employee manual, employers should consult with employment counsel to minimize the risk that it will be deemed to be an implied contract.

If you have any questions about these topics, please do not hesitate to contact Mary E. O’Neal at meo@mctlaw.com, Patricia A. Granger at pag@mctlaw.com or Angela L. Rapko at alr@mctlaw.com.  You may also reach us by telephone at (617) 722-8100.  We also welcome your inquiries regarding other employment-related issues you may be facing in your business.

A sign on the door at a Dunkin’ Donuts store in Newton yesterday gave coffee-seeking customers some bad news. (Bill Greene/ Globe Staff)

An estimated 2 million Greater Boston residents are without clean drinking water and under a boil water order following the breaching of a 10-foot pipe that supplies clean water to the region.

The Boston Globe reports that as a result of the massive pipe leak that cut off clean water to two million Eastern Massachusetts residents also sharply curtailed the availability of another critical beverage: coffee.

Dunkin’ Donuts, one of the largest coffee retailers in the country, stopped serving coffee in areas affected by the water break yesterday. Customers were greeted by signs on the entrances that said: “We are not offering hot or cold coffee products until further notice.’’ Dunkin’ Donuts was pushing Coolattas, a frozen coffee drink.

And many independent retailers also cut off the flow of joe, leaving groggy brunchers yesterday searching for other sources of caffeine.

At Flour Bakery and Café in Boston’s South End, a sign on the door warned diners that no coffee was available because of the water crisis. Across Washington Street, at Code Ten, salads and coffee were both off the menu.

Amrita Bajwa, a medical student from Boston, sat outside Code Ten with a friend, sipping from a bottle of water.

“I tried to get an iced chai tea from Flour, but had to settle for something else,’’ she said.

Judith Connelly, of Malden, was staring at the sign outside the Dunkin’ Donuts on Summer Street, in downtown Boston, and said she had been “looking all day for her daily cup of coffee,’’ and had not yet found one. Her preferred shop, Starbucks, had also shut down its coffee sales in affected stores, and only offered bottled drinks and food.

There were options to be found, and different stores reached different conclusions about whether coffee is hot enough to qualify as drinkable. It is not; water must be boiled for a minute, which does not happen in a coffeemaker.

A 7-Eleven on Morrissey Boulevard in Dorchester was not selling fountain drinks, but was offering coffee. “It is already hot,’’ a clerk argued. But a 7-Eleven in Downtown Crossing decided otherwise, and cut off its coffee.

Aroa Fine Chocolate in the South End kept coffee on the menu. An employee said the shop used prepackaged ice and spring water for iced coffee, and relied on the fact that the hot coffee was heated.

Some consumers were taking no chances. “I think I will pass on the boiled tap water,’’ Connelly said. And Edgar Galicia, a gas station worker in Dorchester, said he skipped his morning cup of coffee because he was “worried about getting sick.’’

The coffee conundrum has become a challenge for many retailers and businesses. Roger Berkowitz, chief executive of Legal Sea Foods, said making coffee in bulk has been “the most challenging’’ issue for the chain’s restaurants, because not all prepare the drink at boiling temperatures.

“It is terrible for business,’’ said Lauren Krakauskas, an employee at Espresso Royale Caffe on Newbury Street, which shut down its espresso machines yesterday. “All we have to sell is orange juice.’’

See also: Boston Herald Customers Steaming about hard-to-find coffee

“Franchising is a significant source of small business activity in the Commonwealth and has greatly increased small business ownership, particularly among women and minorities,” said IFA Vice President of Government Relations David French.  ”We feel the judge did not take fully into account the unique attributes of franchising and the federal regulatory oversight of the franchise business model.  Wrongfully defining franchisees as employees of the franchisors instead of business owners, as the ruling does, threatens the viability of franchising as a business model in Massachusetts and will likely lead to franchise companies ceasing operations.”

French said that because of the 16,000 franchise businesses in Massachusetts 300,000 jobs are created and $37 million in economic output is provided.  

The judge granted summary judgment to plaintiffs based on his conclusion that under Massachusetts’ Independent Contractor Statute, Massachusetts franchisees of the defendant Coverall North America were actually employees misclassified as independent contractors.  Under the statute, individuals providing a service are considered employees if they meet one of three prongs of the “ABC test” of employee misclassification.  The judge based his decision on prong two (“the service provided by the worker is outside the employer’s usual course of business”), asserting there is no distinction between the defendant’s business and that of its franchisees.  In what amounts to a threat to the entire franchise business model, Judge Young brings into question the legitimacy of every business that relies on contractually related firms as sources of revenue.

This ruling is the latest in a series of adverse actions relative to the independent contractor statutes in Massachusetts.  IFA is supporting legislation filed in Massachusetts that would stipulate that all three prongs of the ABC test must be violated in order for an independent contractor to be deemed a misclassified worker.  

About the International Franchise Association

The International Franchise Association is the world’s oldest and largest organization representing franchising worldwide. Celebrating 50 years of excellence, education and advocacy, IFA protects, enhances and promotes franchising through government relations, public relations and educational programs.  Through its awareness campaign highlighting the theme, Franchising: Building Local Businesses, One Opportunity at a Time, IFA promotes the 21 million jobs and $2.3 trillion of economic activity generated by franchising. IFA members include franchise companies in over 90 different business format categories, individual franchisees and companies that support the industry in marketing, law and business development.

SOURCE International Franchise Association