Mujo v. Jani-King International, Inc.

          RULING AND ORDER ON MOTION FOR RECONSIDERATION

          VICTOR A. BOLDEN UNITED STATES DISTRICT JUDGE.

         On December 30, 2019, Simon Mujo and Indrit Muharremi, on behalf of a class of over 100 Jani-King franchisees (collectively “Plaintiffs”), moved for reconsideration of this Court's December 21, 2019 Ruling and Order on a motion for summary judgment filed by Jani-King International, Inc., Jani-King, Inc., and Jani-King of Hartford, Inc. (collectively “Defendants” or “Jani-King”). Pls.' Mot. for Reconsideration, ECF No. 176 (Dec. 30, 2019) (“Pls.' Mot.”), Pls.' Mem. in Support of Pls.' Mot., ECF No. 176-1 (Dec. 30, 2019) (“Pls.' Mem.”); see also Ruling and Order on Mot. for Summ. J., ECF No. 175 (Dec. 21, 2019) (“Ruling and Order”).

         Under Local Rule 7(c), Plaintiffs ask the Court to reconsider its decision granting summary judgment for Jani-King and dismissing Plaintiffs' unjust enrichment claim. Pls.' Mot. at 1 (citing D. Conn. L. Civ. R. 7(c)).^[1]

         For the reasons discussed below, the motion for reconsideration is DENIED.

         I. BACKGROUND

         The Court will assume familiarity with the underlying record of this case and will only discuss matters relevant to resolving this motion.

         On June 10, 2019, Jani-King timely moved for summary judgment, and filed a supporting memorandum, a statement of material facts, and twenty other exhibits. See Docket Entries, ECF No. 136 (June 10, 2019) (containing the referenced filings).

         On August 2, 2019, Plaintiffs timely opposed Jani-King's motion for summary judgment, and filed their supporting memorandum of law, response to Jani-King's statement of material facts, a supporting memorandum, and fourteen exhibits, see Docket Entries, ECF Nos. 154-56 (Aug. 2, 2019 (containing the referenced filings). Jani-King timely replied, see Defs. Reply in Support of Jani-King Mot., ECF No. 161 (Aug. 16, 2019), and on November 19, 2019, the Court held a hearing on Jani-King's motion for summary judgment, Minute Entry, ECF No. 172 (Nov. 19, 2019).

         The parties' filings focused primarily on the employment/independent contractor issue, i.e., whether Plaintiffs were unlawfully misclassified as independent contractors, but there was no discussion of the value of the various fees paid by Plaintiffs under the franchise agreement.

         On December 21, 2019, the Court granted Jani-King's motion for summary judgment and dismissing Plaintiffs' remaining unjust enrichment claim. The Court applied Connecticut's ABC test for independent contractor misclassification, Conn. Gen. Stat. § 31-222(a)(1)(B)(ii), and found that a reasonable factfinder could conclude that Jani-King unlawfully misclassified Plaintiffs as independent contractors. Ruling and Order at 17-33.

         Plaintiffs, however, did not have a viable claim for relief under unjust enrichment, because they argued only that the franchise agreement is an employment agreement, so any fees made under the franchise agreement are void as a matter of law. Id. at 33-37 (“But in order to have a viable claim, Plaintiffs must do more than show that the franchise agreement is an employment agreement and then conclusorily assert that any fee or payment required by the franchise agreement is void as a matter of law.”). The Court had already rejected this argument when it dismissed Plaintiffs' § 31-71c wage claim.

Based on this record, Plaintiffs' § 31-73(b) claim rests solely on the franchise agreement being an employment agreement in violation of public policy. As they have argued in their opposition, “the franchise fees explicitly require cleaning workers to pay large sums in exchange for cleaning work in violation of public policy.” Pls.' Opp. at 38 (citations and footnote omitted). They also argue that “[b]ecause they have to pay so much money upfront to obtain their cleaning work, the franchisees must keep working for Jani-King to earn back the money they have been paid.” Id. at 39. Additionally, Plaintiffs submit that “[o]ther ongoing fees such as insurance, advertising, accounting, and technology fees, also must be paid as a condition of continued employment, or Jani-King has the right to terminate the franchise.” Id. (citation omitted). Finally, Plaintiffs argue that Jani-King's practice of deducting “charge-backs” from Plaintiff's gross revenue is also violative of public policy. See Id. at 39-40 (“A ‘charge-back' occurs when a customer fails to pay Jani-King for work already performed by [P]laintiffs.”).

Id. at 38.

         Based on Connecticut law, specifically the Connecticut Franchise Act, Conn. Gen. Stat. §§ 42-133e - 42-133h, the Court found that the fees paid under the franchise agreement could not be per se invalid and must have some value. Id. at 39. Yet, despite the various filings, Plaintiffs did not identify the value of the franchise agreement itself, nor did they identify the fees that were added beyond that value. Id. Instead, Plaintiffs' arguments focused on the independent contractor misclassification ...