United States District Court, D. Connecticut
SIMON MUJO and INDRIT MUHARREMI, on behalf of themselves and all others similarly situated, Plaintiffs,
JANI-KING INTERNATIONAL INC., et al., Defendants.
RULING AND ORDER ON MOTION FOR SUMMARY
A. BOLDEN UNITED STATES DISTRICT JUDGE.
Mujo and Indrit Muharremi, on behalf of a class of over 100
Jani-King franchisees (collectively
“Plaintiffs”), allege that Jani-King
International, Inc., Jani-King, Inc., and Jani-King of
Hartford, Inc. (collectively “Defendants” or
“Jani-King”) unlawfully classified them as
independent contractors and were unjustly enriched in
violation of Conn. Gen. Stat. § 31-73(b).
moves for summary judgment.
following reasons, Jani-King's motion for summary
judgment is GRANTED.
FACTUAL AND PROCEDURAL BACKGROUND
signed Jani-King franchise agreements to “operate a
Jani-King franchise cleaning and maintenance services
company” and to provide commercial cleaning services
using Jani-King's trademarks and system. Pls.' Local
Rule 56(a)(2) Statement of Material Facts in Opp. to
Jani-King Mot., ECF No. 155 ¶ 1 (Aug. 2, 2019)
(“Pls.' SMF”); Ex. 2: Luli & Son
LLCFranchise Agreement, ECF No. 136-5 at
§ 4.1 (Apr. 23, 2014) (“Luli & Son Franchise
Agmt.”); Ex. 1: Simon Mujo Franchise Agreement, ECF No.
136-4 at § 4.1 (July 11, 2007) (“Mujo Franchise
Agmt.”). Plaintiffs' claims arise out of the
Jani-King franchise agreement and the ensuing business
relationship between the parties. The parties dispute whether
Jani-King's franchise agreements permit the Plaintiffs to
operate as independent contractors with their own commercial
cleaning businesses, or whether Plaintiffs are employees.
Pls.' SMF ¶ 1.
Franchise System and Model
sells commercial cleaning service-based franchises, and
requires franchisees to operate under its franchise system in
a particular geographic area. Pls.' SMF ¶¶ 54,
56. Jani-King provides janitorial services to commercial
entities. Id. ¶ 89. Jani-King's workers are
classified as independent contractor franchisees.
Id. ¶ 91 (citing Luli & Son Franchise Agmt.
at § 12.6).
owns all contracts with its cleaning customers and is solely
responsible for drafting all cleaning contracts. Id.
¶ 93; see also Mujo Franchise Agmt. at §
4.7.1 (“All monies received from clients are the
property of Franchisor.”). Jani-King has the exclusive
right to “secure commercial cleaning and maintenance
contracts.” Pls.' SMF ¶ 99 (citing Luli &
Son Franchise Agmt. at § 4.3.1); see also Ex.
24: Jani-King Uniform Offering Circular, ECF No. 156-5 at
JKCT00001104 (Apr. 30, 2007) (“UOC”) (“All
proposals for services made by [franchisees] to either
current or prospective clients must be reviewed and approved
by [Jani-King] staff. Any solicitation for services made by
[franchisee] must be approved by [Jani-King].”).
Additionally, franchisees are limited to accepting or
rejecting Jani-King's offered business. Pls.'s SMF
¶ 100 (citing UOC at JKCT00001110). Along with the
customer, Jani-King sets the terms of the cleaning services
to be provided by franchisees, so franchisees must accept the
contract negotiated between Jani-King and the customer.
Id. ¶ 101.
franchisees pay an initial franchise fee down payment and
initial finder's fee down payment, they operate under
Jani-King's marketing system and use Jani-King's
intellectual property. Id. ¶¶ 55, 57.
Plaintiffs deny that they acquire rights to operate the
franchise and allege that “[a]t all times, Jani-King
controls the operation.” Id. at ¶ 55.
Plaintiffs note that among other indices of control, their
franchise agreements state that:
Franchisor has developed and used, and continues to develop,
use and control in connection with its System, certain
confidential information, programs, devices, methods,
techniques and processes which are not generally known to the
public pertaining to franchising, promotion, marketing,
operation and management of a business, . . . which includes
but is not limited to information regarding the operational,
sales, promotional methods and techniques, and marketing
methods and techniques of Franchisor and the Jani-King
Id. (citing Mujo Franchise Agmt. at § 4.1.2;
Luli & Son Franchise Agmt. at § 4.1.3).
also allege that some franchisees pay the entirety of the
initial fee upfront, while others pay it over time, with the
fee being deducted from their pay. Id. ¶ 96.
to the franchise agreement, Jani-King has the
“exclusive right to perform all billing and accounting
functions for the services.” Luli & Son Franchise
Agmt. at § 4.8. The franchisee must pay 3% of gross
revenue as an accounting fee to Jani-King. Id.
Plaintiffs allege they must agree to these support services
even if they would rather forgo them. Pls.' SMF ¶
to the franchise agreement, franchisees pay various fees: a
10% royalty fee on monthly gross revenue, subject to certain
minimum accounts, id. ¶ 59 (citing Luli &
Son Franchise Agmt. at § 4.5.1); an advertising fee of
1.5% gross revenue for specified marketing programs intended
to “maximize general public recognition and acceptance
of the registered trademarks and enhance the collective
success of all [Jani-King] franchises, ” id.
¶ 61 (citing Luli & Son Franchise Agmt. at §
4.5.2(1)); and a finder's fee for additional cleaning
work-over and above the initial business purchased-referred
by Jani-King, id. ¶ 62 (citing Luli & Son
Franchise Agmt. at § 4.6). Other fees include insurance
fees (otherwise known as the “business protection
plan”), complaint fees, miscellaneous fees, and
charge-backs. Id. ¶ 97; see also Id.
¶ 98 (explaining that a charge-back occurs when a
customer fails to pay Jani-King for work already performed by
Plaintiffs; Jani-King deducts this amount from
Plaintiff's earnings); Luli & Son Franchise Agmt. at
§ 4.8.1 (“Any money not collected in an account
for any reason will be charged back to Franchisee.”).
These contractual fees are all deducted monthly from the
gross revenue generated by franchisees. Id. ¶
64. Plaintiffs deny that the franchise agreement defined
“compensation, ” but Jani-King alleges that
Plaintiffs “expressly agreed that their compensation
would exclude all fees set out in their respective
the franchise agreement, franchisees are responsible for
providing and maintaining worker's compensation and
liability insurance. Id. ¶ 66.
order to ensure continuous service and client communication,
Jani-King has required franchisees to notify the regional
office of vacations and contact information for the people
who will be responsible for servicing the accounts.
Id. ¶ 67. Subject to customer requirements,
franchisees set their own schedules. Id. ¶ 68.
Franchisees could exchange customer accounts with other
franchisees, subject to Jani-King approval, and franchisees
also could decline or stop servicing customer accounts, but
they risk not getting additional work to make up the
difference in revenue. Id. (citing UOC at
requires franchisees to “purchase certain professional
products and equipment . . . under specifications in the
Franchise Agreement and operating manuals.” UOC at
JKCT00001090; see generally Id. at JKCT00001090-91
(describing restrictions on sources of products, supplies,
and equipment for the cleaning services). Jani-King also
determines the advertising and promotional materials used by
franchisees, Pls.' SMF ¶ 106 (citing UOC at
JKCT00001098), Franchisees are responsible for inspecting
their customer accounts, Pls.' SMF ¶ 70, and
Jani-King also conducts “quality control inspections of
accounts . . . from time to time in order to insure [sic]
that the service is performed in accordance with the cleaning
schedule or instructions associated with the contract between
Franchisor [Jani-King] and the customer and to the
performance standards of Jani-King, ” Luli & Son
Franchise Agmt. at § 4.19.3.
requires franchisees to “meet brand standards
addressing everything from cleaning results, to the
appearance of people cleaning (e.g., that cleaners should
wear clean uniforms with name tags . . .), to how the service
is associated with Jani-King trade names and
advertising.” Pls.' SMF ¶ 71; see also
Id. ¶ 108 (cleaners must wear Jani-King branded
uniforms). Additionally, franchisees are prohibited from
bringing extra items or non-employees (including children and
animals) to the customer site.
requires franchisees to agree not to hold themselves out as
an agent, servant, or employee of Jani-King, so that
franchisees may not, without prior written approval, obligate
Jani-King for any expenses, liabilities, or other
obligations. Id. ¶ 72 (citing Mujo Franchise
Agmt. at § 12.7; Luli & Son Franchise Agmt. at
may sell their businesses, subject to Jani-King's right
of first refusal and written consent. Pls.' SMF ¶
74. Franchisees are subject to non-compete and
non-solicitation provisions after leaving the Jani-King
franchise system for a period of two years (within the
originally-contracted territory) or one year (outside the
territory); during that period, franchisees may not engage in
an “independently established trade, occupation, or
business” in the commercial cleaning industry.
Id. ¶¶ 75, 117 (citing Luli & Son
Franchise Agmt. at § 5.2.3).
franchise agreements have ten or twenty year terms,
Id. ¶ 76, and may be terminated upon the occurrence
of any of the sixteen conditions of default, id.
(citing Luli & Son Franchise Agmt. § 8.1).
Plaintiffs allege that the “highly subjective
conditions in Section 8.1 effectively provide Jani-King with
the right to terminate franchisees at will, since it can
decide whether Franchisees have engaged in ‘conduct
which reflects unfavorably upon . . .
Jani-King[.]'” Id. (citing Luli & Son
Franchise Agmt. at § 8.1(g)(iii)). For many of the
conditions for default and termination, Jani-King may
terminate the franchise agreement upon thirty (30) days
notice. Id. ¶ 114 (citing Luli & Son
Franchise Agmt. at § 8.1(g)(i)-(ix)).
provides mandatory initial training, as well as training
manuals. Id. ¶ 77. Plaintiffs allege the
cleaning methods in the training manuals are not simply
recommended techniques, because the franchise agreement may
be terminated if franchisees “fail to maintain the
standards that Franchisor requires in this Agreement or any
other standards in Jani-King manuals.” Id.
(citing Luli & Son Franchise Agmt. at § 8.1(g)(ii)).
Additionally, Jani-King may suspend franchisees or require
additional training until they meet Jani-King's minimum
standards. Id. ¶ 81. Jani-King may also charge
more fees to these franchisees who fail to correct
deficiencies to the client or Jani-King's satisfaction.
Id. ¶ 83.
to the franchise agreement between the parties:
Franchisee understands and agrees that Franchisee is required
to maintain a good relationship with each customer serviced
by Franchisee, and that Franchisor may inspect any premises
serviced by Franchisee at any time to ensure that the quality
of service being rendered is in accordance with Jani-King
Id. ¶ 82 (quoting Luli & Son Franchise
Agmt. at § 4.19; Mujo Franchise Agmt. at § 4.17).
Jani-King alleges it may only terminate franchise agreements
“for cause and subject to both contractual notice and
any additional requirements imposed by the Connecticut
Franchise Act, ” Conn. Gen. Stat. § 42-133(f)(a),
Defendants' Local Rule 56(a)(1) Statement of Undisputed
Facts, ECF No. 136-2 ¶ 84 (June 10, 2019)
(“Jani-King SMF”), Plaintiffs allege that the
broad and subjective conditions for default in Section 8.1,
along with the fact that “Jani-King does not
continuously guarantee any level of work or accounts, ”
“effectively provide Jani-King with the right to
terminate franchisees at will, ” Pls.' SMF ¶
84; see also Id. ¶ 86 (citing Luli & Son
Franchise Agmt. at § 6.1.2 (“Franchisor does not
guaranty that the Initial Business will reach or remain at
the level stated on the Franchise Summary throughout the term
of this Agreement.”) (emphasis omitted)). Jani-King
does allow franchisees to pursue additional business,
provided that they submit all sales proposals for
Jani-King's prior approval. Id. ¶ 87;
see also UOC at JKCT00001104. In addition, although
franchisees may sell extra services to customers, franchisees
must still receive prior approval from Jani-King.
Id. ¶¶ 88, 102.
employs staff to monitor customer satisfaction and field
customer inquiries, including complaints. Additionally,
Jani-King's centralized computer system stores call logs,
which Plaintiffs allege demonstrate Jani-King's
“extensive involvement” with Plaintiffs and
Jani-King customers. Id. ¶ 105.
Mujo's Relationship with Jani-King
11, 2007, Mr. Mujo entered into a franchise agreement with
Jani-King. See Mujo Franchise Agmt. Mr. Mujo claims
he “was only a worker” for Jani-King and was not
a franchise owner. Ex. 31: Deposition of Simon Mujo, ECF No.
156-12 at 26:7-13 (July 27, 2018) (“Mujo Depo.”);
see also Pls. SMF ¶ 2 (admitting that Plaintiff
Mujo “performed the manual labor of cleaning the
offices per Jani[-]King's specifications” beginning
in 2007). Mr. Mujo admits that his Franchise Agreement
obligated him to “act at all times as an independent
contractor, ” but he alleges that notwithstanding this
language, he was a Jani-King employee. Pls. SMF ¶ 3
(citing Mujo Franchise Agmt. at § 12.7, but noting
generally the numerous controls exercised by Jani-King).
Mujo paid $44, 175 as an initial franchise fee down payment
and initial finder's fee down payment in exchange for his
use of the Jani-King “System, Property Marks, and
Confidential Information.” Id. ¶ 4
(citing Mujo Franchise Agreement at 1, § 4.3). Mr. Mujo
had no prior sales experience. Id. ¶ 5. Mr.
Mujo understood that “Jani-King was obligated to offer
[him] at least $15, 000 in monthly revenue during the first
480 days of [his] agreement period, ” Mujo Depo. at
105:2-9, and that Jani-King would keep a certain percentage
of revenue equal to its fees, Pls. SMF ¶ 6. Mr. Mujo
received Monthly Franchise Reports, which disclosed both
customer revenue and Jani-King fees and deductions.
Id. ¶ 7. According to Mr. Mujo, “[o]nly
Jani-King representatives communicated with the customer
accounts such that [he] did not have any contact with
customers at all.” Id. ¶ 8 (citing Mujo
Depo. at 143:1-24). Mr. Mujo claims that he did not receive
training to clean specialized accounts, like hospitals and
restaurants, id. ¶ 9 (citing Mujo Depo.
1211:18-123:33), and he asserts the “Jani-King
representatives were unknowledgeable and unable to answer
questions about what kind of cleaning tools he should use for
new customer accounts, ” id. ¶ 10.
to Jani-King policies and his franchise agreement, Mr.
Mujo's cleaning work had to be performed “in
accordance with the cleaning schedule or instructions
associated with the contract between [Jani-King] and the
client to [Jani-King's] performance standards.”
Id. ¶ 11 (citing Mujo Franchise Agmt. §
4.17). Mr. Mujo claims that he only declined customer
accounts offered by Jani-King when Jani-King instructed him
to do so. Id. ¶¶ 12-13 (citing Mujo Depo.
at 109:4-110:9). Mr. Mujo could and did hire employees, but
he only hired one part-time employee, his cousin, and Mr.
Mujo disputes that he supervised his cousin because his
cousin also had to “follow current established
Jani-King polices, practices, and procedures.”
Id. ¶ 14 (citing Mujo Franchise Agmt. At §
Mujo provided his own equipment and transportation for
cleaning jobs, and he sometimes purchased supplies at
Wal-Mart or Lowe's, which lowered his costs. Id.
¶ 15 (noting that Mr. Mujo also purchased supplies where
Jani-King told him to go). Although Mr. Mujo allegedly did
not know his franchise agreement allowed him to solicit
potential clients, id. ¶ 18, he notes that
“[a]ll contracts under which terms services are
provided by any Jani-King franchisee are the sole property of
Jani-King, ” Mujo Franchise Agmt. § 4.19.2. Mr.
Mujo admits he “did not believe he could improve the
speed or efficiency of cleaning work, . . . that a customer
account would take just as long to clean the first time as it
would the twenty-fifth time.” Pls.'s SMF ¶ 19.
Mujo “never communicated” with customers
directly, but admits that customers made complaints to
Jani-King. Id. ¶ 21 (citing Mujo Depo. at
143:16-24). One customer complained to Jani-King that Mr.
Mujo had inappropriately touched an employee, and requested
that a new franchisee clean their office. Ex. 6 March 15,
2011 Incident Report, ECF No. 136-8 at 2 (July 19, 2017). Mr.
Mujo denies the incident occurred, but admits the complaint
was made. Pls. SMF ¶ 22. Another customer, a
physician's group, cancelled their Jani-King contract
after complaining that Mr. Mujo's franchise did not
adequately clean their premises, even after the group spoke
to Mr. Mujo. Id. ¶ 23. Mr. Mujo has no memory
of speaking to anyone at the physician's group about the
alleged problem, but admits the complaint was made.
Mujo provided cleaning services for Jani-King until early
2016. Id. ¶ 120. Throughout the term of his
franchise agreement, Mr. Mujo paid finder's fees for new
accounts, and paid the many other fees as well. Id.
Muharremi's Relationship with Jani-King
April 23, 2014, on behalf of his limited liability company,
Luli & Son, LLC, Mr. Muharremi entered into a franchise
agreement with Jani-King. Luli & Son Franchise Agmt. Mr.
Muharremi admits that his Franchise Agreement stated that
“Franchisee will be at all times an independent
contractor, ” but alleges that notwithstanding this
language, Mr. Muharremi was a Jani-King employee and was not
permitted to operate as an independent contractor. Pls. SMF
¶ 25 (citing Luli & Son Franchise Agmt. at §
12.6, and noting the many indices of control throughout the
Muharremi paid $16, 250 as an initial franchise fee down
payment and initial finder's fee down payment in exchange
for his use of the Jani-King “System, Property Marks,
and Confidential Information.” Id. ¶ 26
(citing Luli & Son Franchise Agreement at 1, §
4.3-4.3.1). Mr. Muharremi understood that he (through Luli
& Son LLC) was contracting to receive offers of initial
business that would generate $4, 000 of gross revenue per
month, less specified fees, and acknowledges that “part
of what [he] purchased with [his] franchise was access to the
Jani-King system, for example, training programs that trained
[him] in how to clean accounts according to Jani-King
standards.” Id. ¶¶ 27-28. Although
Mr. Muharremi performed his daily duties without supervision,
Jani-King personnel sometimes inspected his work for quality
control. Id. ¶ 29 (citing Luli & Son
Franchise Agmt. at § 4.19.3 and various depositions of
Jani-King personnel). Mr. Muharremi “held himself out
as an owner of a Jani-King franchise through the use of his
business card.” Id. ¶ 30; see
also Ex. 19: Luli & Son LLC Business Card, ECF No.
136-22 (June 10, 2019) (noting that it was an authorized
franchisee of Jani-King, and including Jani-King's logo).
with Jani-King's constraints and customer schedules, Mr.
Muharremi decided when to perform his cleaning services and
provided his own equipment. Id. ¶ 31. Mr.
Muharremi decided “both whether to accept any customer
account referred by Jani-King, . . . and whether to use his
own or employee labor to provide cleaning services.”
Id. ¶ 32. In the span of four years, Mr.
Muharremi is aware of three or fewer quality-control
inspections by Jani-King, and none occurred while cleaning
services were being performed. Id. ¶ 33. Months
would pass where Mr. Muharremi had no contact with Jani-King.
Id. ¶ 34.
Muharremi recognized that he could “minimize expenses
by providing services to nearby customers.”
Id. ¶ 35. Before accepting a new account, Mr.
Muharremi collected information about the square footage,
fixtures, and any time constraints. Id. ¶ 36.
He sometimes sold additional services, like stripping floors
and carpet extractions, to existing customers. Id.
¶ 37. He “individually assessed whether each
customer space required an initial deep cleaning, . . . and
always inspected work performed by family members before
leaving a job.” Id. ¶ 38.
Muharremi never tried to “grow” his business or
hire employees; never considered what factors made accounts
profitable; and never devised strategies to improve
efficiency, such as tracking hours spent on different
accounts. Id. ¶ 39. Mr. Muharremi personally
serviced the accounts “90 percent of the time.”
Id. (citing Ex. 7: Deposition of Indrit Muharremi,
ECF No. 136-10 at 230:6-10 (Apr. 18, 2018) (“Muharremi
Depo.”)). Mr. Muharremi shopped for the lowest price on
cleaning supplies and equipment, but noted that “there
[are] better deals but not [for] Jani-King approved
supplies.” Id. (citing Muharremi Depo. at
Muharremi continues to perform cleaning services for
Jani-King under his franchise agreement. Id. ¶
118. As a result, he alleges he pays finder's fees
“as a condition of securing more cleaning work with
Jani-King” for new accounts, and continues to pay the
many fees and charge-backs deducted from his account.
Id. ¶ 119.
submits evidence of profitable businesses run by other
franchisees, which Plaintiffs do not dispute. See
Pls.' SMF ¶¶ 40-53. Plaintiffs do emphasize
that “customer contracts are between the customer and
Jani-King, ” that “Jani-King must approve all
bids to provide cleaning services, ” and “that
Jani-King does have involvement in determining the schedule
and frequency for cleaning accounts.” Pls.' SMF
other franchisees ensure the profitability of their
businesses by: providing cleaning services through teams of
employees hired, paid, and scheduled without any involvement
from Jani-King, id. ¶ 41; buying cleaning
supplies from different sources to minimize costs,
id. ¶ 42; evaluating profitability before
accepting new customer accounts by, inter alia,
ensuring that new customers' location, scheduling
requirements, difficulty, and pricing will turn a profit,
id. ¶¶ 43, 45; communicating with
customers directly about their needs, id. ¶ 46;
and providing extra services, id.
Mendez, a Jani-King franchisee, has managed his business
remotely for a year by providing cleaning services entirely
through the labor of his employees. Id. ¶ 48.
Champigny, another franchisee, has generated as much as $14,
000 in gross revenue a month, while working with eight
part-time employees. Id. ¶ 50.
December 5, 2016, Plaintiffs filed this lawsuit, and on March
9, 2017, they filed an Amended Complaint alleging that: (1)
Jani-King violated the Minimum Wage Act; and (2) Jani- King
has been unjustly enriched. Compl., ECF No. 1 (Dec. 5, 2016);
Am. Compl., ECF No. 41 (Mar. 9, 2017).
March 30, 2017, Jani-King moved to dismiss both the wage and
unjust enrichment claims in the Amended Complaint under Rule
12(b)(6) for failure to state a ...