Massachusetts Justices Say Contractor Law Applies to Franchisees

A misclassification dispute between 7-Eleven Inc. and a group of Boston-area franchisees must be resolved using the three-part test set out by Massachusetts’ Independent Contractor Law, not the FTC’s franchise rule, the state’s top court said Thursday.

There’s no inherent conflict because 7-Eleven and other franchisors can comply with both rules, the Massachusetts Supreme Judicial Court said in answering a question certified by the First Circuit in 2021.

And “despite 7-Eleven’s dire predictions,” there’s no risk that applying the ICL test to franchisees would kill the franchising model in Massachusetts, the state high court said. The Third and Ninth circuits ...