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Appeals Court Rules Franchisee’s Employee is Prohibited From Bringing Employment Claims Against Franchisor

This photo by Nick Youngson is licensed under CC BY-SA

In January 2019, Jani-King franchise owner Constance Mouanda filed a complaint against Jani-King International (“Jani-King”) and Cardinal Franchising, Inc. (“Cardinal”), a Jani-King master franchise, for events that arose after she entered into agreements to own a Jani-King franchise on February 28, 2018. Mouanda claims she was fraudulently forced to sign agreement documents which she did not have counsel to review.

Mouanda sought compensatory and punitive damages due to the way, she alleges, that Jani-King structures its business to evade employment law protections provided to employees by deeming workers like Mouanda as franchisees.

Cardinal filed a motion to dismiss asserting the franchise agreement was between Cardinal as the master franchise and Mouanda’s limited liability company (LLC) as the franchisee, Cardinal argued that Mouanda did not have the ability to bring this cause of action. Cardinal contended that they were not her employer, as Mouanda was an independent contractor performing work for her LLC; therefore, Mouanda did not have a contractual relationship with Cardinal.

Another motion to dismiss was filed by the Jani-King defendants due to lack of personal jurisdiction and failure to state a claim upon which relief could be granted. Their assertion regarding personal jurisdiction was due to the fact that the Jani-King entities were incorporated in Texas and did not have any operation in Kentucky. Additionally, while Jani-King International (JKI) has the right to enforce Unit Agreements to protect “Jani-King” branding, they are not obligated to pay Mouanda or her LLC.

On September 23, 2019, a decision entered by the Circuit Court granted the motions dismissing Mouanda’s case without prejudice. The Court relied on Supreme Court of Kentucky precedent which held that being a member of the LLC does not therefore entitle the employee (Mouanda) to bring employment claims against the franchisor.

Mouanda appealed after the Court granted the dismissal. Constance Mouanda v. Jani-King International, et al. was appealed to the Kentucky Court of Appeals. In an opinion rendered on February 5, 2021, the Court stated, “[t]he proper plaintiff for this complaint should have been the Matsoumou’s, LLC, the named franchisee in the franchise agreement with Cardinal.” The Court affirmed the dismissal of Mouanda’s complaint by the Jefferson Circuit Court.

This article discusses Constance Mouanda v. Jani-King International, et al. NO. 2019-CA-1594-MR.

Cardinal Franchising, Inc., D/B/A Jani-King of Louisville was represented by Randall S. Strause and Andrew J. Williams of Strause Law Group, PLLC.