7-Eleven Touts Franchisee Suit Regarding Flexible Work Hours In California

In recent news, 7-Eleven faces allegations from California franchisees claiming employment law violations related to flexible work hours in California.

Details of the Case: Serge Haitayan et al. v. 7-Eleven Inc.

Court: U.S. District Court for the Central District of California

Case No.: 2:17-cv-07454

Serge Haitayan et al. v. 7-Eleven Inc.: The Plaintiff

Serge Haitayan, is one of 4 plaintiffs in the case that claimed 7-Eleven exerts unreasonable control over their business decisions, and as such, they should actually be considered employees under state law. However, Plaintiff “Paul” Lobana, another plaintiff in the case, owns three stores throughout the LA area. Under cross examination aimed at undercutting the plaintiffs’ claims that 7-Eleven exerts stringent control over franchise owners, Lobana admitted he grossed more than $200,000 in profits in 2019 while he was deducting business expenses on income taxes, and that he has the freedom to come and go from the 7-Eleven store whenever he wants. He was the 3rd plaintiff to offer similar testimony.

Serge Haitayan et al. v. 7-Eleven Inc.: The Defendant

7-Eleven Inc. claims that the arguments presented by the plaintiffs in the Serge Haitayan et al. v. 7-Eleven Inc. case threatens the stability of California’s entire franchise system if the owners prove the company owes them more than $11 million for business expenses.

Allegations Plaintiffs Made in the Suit:

Plaintiffs in the suit claim that 7-Eleven allegedly misclassified them as independent contractors, but treated them as if they were store managers.

Serge Haitayan et al. v. 7-Eleven Inc.: An Overview

Four California franchise owners sued 7-Eleven in 2017 on behalf of approximately 1,000 franchisee owners in California, but they were later denied class certification. In February 2021, Judge Fischer ruled that the plaintiffs’ claims fall under the older California Borello employment test rather than the newer ABC test. The Borello test was established by the California high court’s 1989 ruling on S.G. Borello & Sons Inc. v. Department of Industrial Relations and creates a looser standard (in comparison to the ABC test) that weights numerous factors with an emphasis on the control an employer exerts over workers. . On the second day of a video conference California federal bench trial in March 2021, Haitayan (plaintiff in the case), conceded that when working at the 7-Eleven franchise, he did set his own work schedule, take vacations whenever he wanted, and worked only 10-15 hours each week.

If you have questions about California labor law violations or how employment law protects you against labor law violations, please get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in various law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.