Darryl Williams v. Jani King of Philadelphia Inc

PRECEDENTIAL

UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
______

No. 15-2049
______

DARRYL WILLIAMS;
HOWARD BROOKS

v.

JANI-KING OF PHILADELPHIA INC.;
JANI-KING INC.;
JANI-KING INTERNATIONAL INC.,
Appellants
______

On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(E.D. Pa. No. 2-09-cv-01738)
District Judge: Honorable R. Barclay Surrick
______

Argued January 20, 2016
Before: FISHER, CHAGARES and COWEN, Circuit
Judges.

(Filed: September 21, 2016)
Kerry L. Bundy, Esq.
Eileen M. Hunter, Esq.
Aaron D. Vanoort, Esq. [ARGUED]
Faegre Baker Daniels
90 South 7th Street
2200 Wells Fargo Center
Minneapolis, MN 55402

Counsel for Appellants

Jonathan N. Solish, Esq.
Bryan Cave
120 Broadway, Suite 300
Santa Monica, CA 90401
Counsel for Amicus Appellant International Franchise
Association

David J. Cohen, Esq.
604 Spruce Street
Philadelphia, PA 19106

Shannon Liss-Riordan, Esq. [ARGUED]
Adelaide Pagano, Esq.
Lichten & Liss-Riordan
729 Boylston Street, Suite 2000
Boston, MA 02116
Counsel for Appellees

______

OPINION OF THE COURT
______

2
FISHER, Circuit Judge.
Disputes about whether workers are properly classified
as employees or independent contractors are a classic and
reoccurring issue in American law. This case presents such a
dispute. Jani-King,1 the world’s largest commercial cleaning
franchisor, classifies its franchisees as independent
contractors. Two Jani-King franchisees, Darryl Williams and
Howard Brooks, assert that they are misclassified and should
be treated as employees. On behalf of a class of Jani-King
franchisees in the Philadelphia area, Brooks and Williams
seek unpaid wages under the Pennsylvania Wage Payment
and Collection Law (WPCL), 43 Pa. Stat. §§ 260.1–260.12.
The District Court granted the Plaintiffs’ motion for class
certification. In this interlocutory appeal under Federal Rule
of Civil Procedure 23(f ), we consider whether the
misclassification claim can be made on a class-wide basis
through common evidence, primarily the franchise agreement
and manuals. We hold that the claims in this case are
susceptible to class-wide determination and that the District
Court did not abuse its discretion by certifying the class.

1. The defendants are three corporate entities: Jani-King of
Philadelphia, Inc.; Jani-King, Inc.; and Jani-King
International, Inc. The parties refer to these related
corporations as “Jani-King,” and we adopt that
convention in this opinion.

3
 I
A
Jani-King franchisees provide janitorial and other
cleaning services for offices, restaurants, warehouses, and
other commercial properties. Jani-King licenses its
trademarks, goodwill, and cleaning system to its franchisees
and provides franchisees with administrative, billing, and
advertising support. To obtain a franchise, an individual must
pass a background check, pay Jani-King an initial franchise
fee of between $14,625 and $142,750, and sign the Jani-King
franchise agreement. (App. 108–10.)
Jani-King requires new franchisees to meet several
requirements before starting operations. A new franchisee
must attend a 13-day training course and pass a test about
Jani-King’s safety and training manual, which is more than
450 pages long. A franchisee must also purchase cleaning
equipment and insurance, both of which are offered directly
by Jani-King, although a franchisee may select alternative
sources. A franchisee must secure any needed licenses and
permits.
Jani-King guarantees new franchisees a certain dollar
amount in cleaning contracts for a set period. For a larger
initial investment, Jani-King offers contracts with higher
value and guarantees them for a longer period. Jani-King is
responsible for obtaining new customers, and someone from
Jani-King’s sales office will meet with prospective customers
to determine their cleaning needs and give them a quote. If a
customer agrees to a cleaning services contract, the contract is
between the customer and Jani-King. The franchisee is not a
party. Jani-King asks franchisees whether they want to
provide services under the contract. A franchisee may accept
or reject the contract.

4
 Jani-King exercises a significant amount of control over
how franchisees operate. The Jani-King policies and
procedures manual dictates when and how frequently
franchisees must communicate with customers, how
franchisees must dress when meeting customers, and what
uniforms must be worn while performing cleaning work.
(App. 9.) Franchisees must be able to respond to any
messages within four hours at all times and must notify Jani-
King in advance of any vacations and delegate all business
decision-making authority to someone else while on vacation.
(App. 9.) Any marketing materials must be approved by the
Jani-King regional office, and franchisees are not permitted to
advertise their individual phone numbers or have individual
websites. (App. 11.) Franchisees must make a monthly report
to Jani-King of all services and supplies invoiced and must
keep accurate books and records, which Jani-King may audit.
(App. 9.) Jani-King requires franchisees to maintain sufficient
working capital. (App. 9.) Jani-King requires franchisees to
perform cleaning services adequately and may inspect the
premises serviced by the franchisee at any time. (App. 9–10.)
Customer complaints must be handled in a prescribed manner
and within a certain time frame.
Jani-King has numerous tools to ensure franchisees
adhere to its requirements. Jani-King may charge a $50
complaint fee for failure to adequately address customer
concerns. If the complaint is serious enough, the Jani-King
regional office will address the problem and bill the
franchisee for any response work it must do. (App. 10.) Jani-
King may require franchisees to take remedial training. (App.
7.) Jani-King may reassign customer accounts for inadequate
performance or failure to adhere to policies and procedures.
(App. 10.) Ultimately, Jani-King may suspend any franchisee
for failure to comply with its procedures and policies.

5
 Jani-King invoices customers and controls billing and
accounting. Jani-King subtracts all fees from the gross
revenue and pays the remainder to the franchisee. The fees
include a 10 percent royalty fee, a 2.5 percent accounting fee
(although this fee is reduced for particularly large franchises),
a 1.5 percent technology licensing fee, and a 1 percent
advertising fee. (App. 111–12.) In addition, once the initial
guaranteed business period expires, franchisees pay a finder’s
fee to Jani-King for all new customer accounts. Franchisees
may solicit new business within certain parameters, but any
new cleaning contract is between the customer and Jani-King,
which then has sole control over the contract. (App. 7, 11.)
Franchisees have control over certain aspects of their
business. While some franchisees do all cleaning work
personally, others hire employees. Jani-King requires
franchisees to keep certain employee documents and records,
but franchisees otherwise have total control over hiring and
firing employees.
There are approximately 300 Jani-King franchises in the
Philadelphia area. The named plaintiffs, Darryl Williams and
Howard Brooks, purchased Jani-King franchises in the
Philadelphia area. Williams’s and Brooks’s franchises were
small. Brooks never hired any employees and performed
cleaning services for his franchise himself, with occasional
help from his wife or friends. (App. 553.) Williams services
one Jani-King account and performs the cleaning himself,
although he paid an employee to help him for two months at
one point. (App. 653.)
Franchisees have a wide range of business sizes—some
have large businesses and many employees, and some have
small businesses and no employees. For example, franchisee
Charles Jones has 27 employees, including five supervisors,

6
monthly gross revenue of $43,497.39 in February 2013, and
total gross revenue since 2009 of $1.28 million. At the
opposite end of the spectrum, Kadri Memedoski has no
employees, $4,556.44 in monthly revenue for February 2013,
and $500,000 total gross revenue since 2006. Jani-King
presented other examples of franchisees with many
employees, including Sulejuman Smanovski with 35 and
Althea Lanier with 16. (App. 701–21.)
B
2
Williams and Brooks filed suit on behalf of a class of
about 300 Jani-King franchisees in the Philadelphia area in
state court in 2009, asserting that Jani-King violated the
WPCL. Jani-King removed the case to the District Court for
the Eastern District of Pennsylvania and moved to dismiss.
For reasons unclear from the record, it took the District Court
three years to rule on the motion to dismiss, which it
eventually granted in part and denied in part in December
2012. The Plaintiffs filed a motion for class certification,
which the District Court granted. Jani-King petitioned our
Court for leave to appeal under Federal Rule of Civil
Procedure 23(f ), and we granted permission for this appeal.
The District Court stayed the case pending the outcome of
this appeal.

2. Brooks was substituted for one of the original plaintiffs
in 2013.

7
 II3
Class certification is appropriate when the prerequisites
of Federal Rule of Civil Procedure 23 are met.4 The party

3. The District Court had jurisdiction under 28 U.S.C.
§ 1332(d)(2), and we have jurisdiction under 28 U.S.C.
§ 1292(e) and Federal Rule of Civil Procedure 23(f ).
4. Federal Rule of Civil Procedure 23(a) sets forth four
prerequisites for a class action: “(1) the class is so
numerous that joinder of all members is impracticable;
(2) there are questions of law or fact common to the
class; (3) the claims or defenses of the representative
parties are typical of the claims or defenses of the class;
and (4) the representative parties will fairly and
adequately protect the interests of the class.” Rule 23(b)
organizes class actions into three types, of which only
one is relevant in this case:

(3) the court finds that the questions of
law or fact common to class
members predominate over any
questions affecting only individual
members, and that a class action is
superior to other available methods
for fairly and efficiently
adjudicating the controversy. The
matters pertinent to these findings
include:

8
seeking certification must prove, by a preponderance of the
evidence, that each of the four conditions of Rule 23(a)—
numerosity, commonality, typicality, and adequacy—is met
and that at least one of the provisions of Rule 23(b) is
satisfied. Comcast Corp. v. Behrend, 133 S. Ct. 1426, 1432
(2013). We review a district court’s class certification order
for abuse of discretion. In re Hydrogen Peroxide Antitrust
Litig., 552 F.3d 305, 312 (3d Cir. 2008). A district court
abuses its discretion if its decision “rests upon a clearly
erroneous finding of fact, an errant conclusion of law or an
improper application of law to fact.” Id. (quoting Newton v.
Merrill Lynch, Pierce, Fenner & Smith, Inc., 259 F.3d 154,
165 (3d Cir. 2001)).

(A) the class members’ interests
in individually controlling the
prosecution or defense of
separate actions;

(B) the extent and nature of any
litigation concerning the
controversy already begun by
or against class members;

(C) the desirability or
undesirability of concentrat-
ing the litigation of the claims
in the particular forum; and

(D) the likely difficulties in
managing a class action.

9
 The District Court found that each of the Rule 23(a)
factors was met. Jani-King did not dispute numerosity before
the District Court. It did argue to the District Court that the
Plaintiffs failed to establish typicality and adequacy. The
District Court explained at length why typicality and
adequacy were satisfied (App. 12–20), and Jani-King did not
challenge these rulings on appeal. Nor did Jani-King
challenge the District Court’s conclusion that the superiority
requirement of Rule 23(b)(3) was met.
The issue on appeal is whether the Plaintiffs’ claims are
capable of class-wide resolution. This involves the
commonality requirement of Rule 23(a)(2) and the
predominance requirement of Rule 23(b)(3). Commonality
requires that there be common issues of law or fact. Fed. R.
Civ. P. 23(a)(2). To meet the predominance requirement, these
common issues of law or fact must predominate over issues
affecting individual class members. Comcast, 133 S. Ct. at
1432. This is a challenging standard to meet that requires the
district court to undertake a “rigorous analysis.” Wal-Mart
Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2551 (2011); see
Comcast, 133 S. Ct. at 1432 (“If anything, Rule 23(b)(3)’s
predominance criterion is even more demanding than Rule
23(a).”). Predominance turns on the “nature of the evidence”
and whether “proof of the essential elements of the cause of
action requires individual treatment.” Hydrogen Peroxide,
552 F.3d at 311 (internal quotation marks omitted). Because
of this consideration, addressing predominance “[f]requently .
. . entail[s] some overlap with the merits of the plaintiff’s
underlying claim.” Wal-Mart, 131 S. Ct. at 2551.

10
 III
A
We begin our analysis by considering the evidence
needed to prove the Plaintiffs’ misclassification claim under
the WPCL. The WPCL requires employers, among other
things, to pay to employees wages and agreed-upon fringe
benefits in a regularly scheduled manner and by lawful
money or check and to make only lawful deductions from
employees’ pay. 43 Pa. Stat. §§ 260.3, 260.4. The WPCL
gives employees the right to institute a civil action to recover
wages owed under the statute. Id. § 260.9a(a). The dispute in
this case is whether the Plaintiffs are employees of Jani-King
eligible to bring a suit under the WPCL or independent
contractors not covered by the WPCL.
The WPCL does not define “employee.” Morin v.
Brassington, 871 A.2d 844, 849 (Pa. Super. Ct. 2005). In
interpreting the meaning of employee under the WPCL,
Pennsylvania courts have looked to similar statutes such as
the Pennsylvania Unemployment Compensation Act and the
Pennsylvania Workers’ Compensation Act. Id. at 849–50
(applying the Workers’ Compensation Act and related case
law to the WPCL); Frank Burns, Inc. v. Interdigital
Commc’ns Corp., 704 A.2d 678, 680 (Pa. Super Ct. 1997)
(applying the definitions in the Unemployment Compensation
Act and Workers’ Compensation act to the WPCL).5

5. In the absence of a definitive pronouncement by the
Pennsylvania Supreme Court about the definition of
“employee” under the WPCL, we must predict how that
court would decide the issue. In doing so, “we must
look to decisions of state intermediate appellate courts,

11
 Pennsylvania courts interpreting the Unemployment
Compensation Act and the Workers’ Compensation Act have
applied a multifactor test to determine whether a worker is an
employee or independent contractor. Courts interpreting the
WPCL have adopted the same multifactor test. The factors
include:
the control of the manner that work is
to be done; responsibility for result
only; terms of agreement between the
parties; the nature of the work or
occupation; the skill required for
performance; whether one employed is
engaged in a distinct occupation or
business; which party supplies the
tools; whether payment is by the time
or by the job; whether the work is part
of the regular business of the employer,
and the right to terminate the
employment at any time.

of federal courts interpreting that state’s law, and of
other state supreme courts that have addressed the issue,
as well as to analogous decisions, considered dicta,
scholarly works, and any other reliable data tending
convincingly to show how the highest court in the state
would decide the issue at hand.” Spence v. ESAB Grp.,
Inc., 623 F.3d 212, 216–17 (3d Cir. 2010) (internal
quotation marks omitted). We find the method of
analysis used by the Pennsylvania Superior Court in
Morin and Frank Burns—comparison to similar
statutes—persuasive.

12
Morin, 871 A.2d at 850 (quoting Lynch v. Workmen’s Comp.
Appeal Bd., 554 A.2d 159, 160 (Pa. Commw. Ct. 1989)). The
applicability of this multifactor test to the WPCL is bolstered
by the use of the same factors by the Pennsylvania Supreme
Court to distinguish between employees and independent
contractors in the context of vicarious liability. Hammermill
Paper Co. v. Rust Eng’g Co., 243 A.2d 389, 392 (Pa. 1968).
Although no factor is dispositive, the “paramount” factor
is the right to control the manner in which the work is
accomplished. Morin, 871 A.2d at 850. The Pennsylvania
Supreme Court has also noted, in the context of workers’
compensation, that “control over the work to be completed
and the manner in which it is to be performed are the primary
factors in determining employee status.” Universal Am-Can,
Ltd. v. Workers’ Comp. Appeal Bd., 762 A.2d 328, 333 (Pa.
2000) (calling these factors the “dominant considerations”);
see Lynch, 554 A.2d at 160 (“[T]he right to control is the most
persuasive indication of [employee or independent contractor
status].”)
Jani-King argues that actual control, not the right to
control, is the key factor in the test. Jani-King criticizes a
number of Pennsylvania lower-court decisions, including
Lynch, and argues that they are mistaken or rely on inapposite
borrowed-employee cases. But the Pennsylvania Supreme
Court has held that the right to control is more significant
than actual control. Universal Am-Can, 762 A.2d at 333 (“[I]t
is the existence of the right to control that is significant,
irrespective of whether the control is actually exercised.”).
And we have also recognized the importance of the right to
control. Drexel v. Union Prescription Ctrs., Inc., 582 F.2d
781, 785 (3d Cir. 1978) (“Actual control of the manner of
work is not essential; rather, it is the right to control which is
determinative.”). According to Jani-King, Universal Am-Can,

13
an employee–independent contractor case, relied on
borrowed-employee cases for this conclusion. But to the
extent the Pennsylvania case law is premised on a “mistake,”
that mistake is longstanding and accepted by the
Pennsylvania Supreme Court. It is not our place to “correct”
such a mistake.
Pennsylvania courts, including the Pennsylvania
Supreme Court, apply the multifactor test for distinguishing
between employee and independent contractor status in many
different contexts. Based on this authority, we predict that the
Pennsylvania Supreme Court would employ this test in the
context of the WPCL. We also predict that the right to control,
rather than actual control, is the most important of the factors.
B
We turn next to the more difficult question of whether,
using the multifactor test, the employment status question can
be resolved in this case through evidence common to the
class. The common evidence identified by the Plaintiffs and
the District Court are the Jani-King franchise agreement,
policies manual, and training manual, and representative
testimony about those documents. The District Court
concluded that the Plaintiffs’ claims could be proven through
this common evidence and that, therefore, the Plaintiffs met
the predominance requirement.
The District Court accurately summarized the controls
placed on franchisees by the franchise agreement and
manuals:
Plaintiffs have pointed to specific
provisions in the Franchise Agreement,
the Policies Manual, and the Training
Manual (collectively “Jani-King
Documents”) to show that Jani-King

14
 has the ability to control the manner in
which franchisees perform their day-to-
day tasks. All the proposed class
members are bound by the Jani-King
Documents, which include mandates
regarding how often the franchisee
must communicate with customers,
how franchisees must address customer
complaints, where franchisees can
solicit business, what franchisees must
wear, what types of records the
franchisee must keep, how the
franchisee can advertise, how far in
advance franchisees must inform the
franchisor of vacations, and how
quickly the franchisee must be able to
be reached. In addition, Jani-King
controls the franchisees’ work
assignments, has the right to inspect the
franchisees work, and has the ability to
change the policies and procedures as it
sees fit.
(App. 29–30.)
The Jani-King franchise agreement, policies manual, and
training manual are common to the class—they apply to the
franchisee who has no employees and services a low-value
contract and to the franchisee with dozens of employees and
many cleaning contracts. These documents describe the level
of Jani-King’s right to control its franchisees. They also
address many of the secondary factors considered in
Pennsylvania decisions—the terms of agreement, the nature
of the work, the skill required, who supplies the tools,
whether payment is by time or by job, and the right to

15
terminate at any time. See Morin, 871 A.2d at 850. We find no
legal error in the District Court’s conclusion that these
documents “could be read” to give Jani-King the right to
control its franchisees. (App. 30.)
We go no further toward resolving the merits of the
WPCL claim. Although the court must undertake a rigorous
analysis at the certification stage and consider some merits-
related issues, the class certification stage is not the place for
a decision on the merits. Amgen Inc. v. Conn. Ret. Plans &
Trust Funds, 133 S. Ct. 1184, 1194–95 (2013) (“Rule 23
grants courts no license to engage in free-ranging merits
inquiries at the certification stage. Merits questions may be
considered to the extent—but only to the extent—that they
are relevant to determining whether the Rule 23 prerequisites
for class certification are satisfied.”).
Jani-King asks us to weigh in on the merits of the
Plaintiffs’ claim now. Jani-King’s first issue on appeal is: “Do
the system controls inherent in a franchise relationship make
a franchisor the employer of its franchise owners under
Pennsylvania’s multi-factor employment test?” (Jani-King Br.
1.) This appeal is not the proper place for us to answer this
question, and we decline to do so. It is enough for us to
determine that some franchise agreements may contain
sufficient controls to render the relationship one of
employment and that the common documents in this case
contain the types of evidence that courts and juries use to
make that determination under Pennsylvania law.
Jani-King may ultimately be correct that the franchise
agreement and manual do not contain sufficient controls over
the day-to-day work of its franchisees to make them
employees under Pennsylvania law, and we express no
opinion on that matter here. Either way, it is possible to make

16
the determination on a class-wide basis. If Jani-King is
correct and the documents cannot, as a matter of fact,
establish that the franchisees are employees, Jani-King will
prevail class wide.
C
Jani-King makes two primary arguments for why the
franchise agreement and manual are insufficient to resolve the
WPCL claim. One, Jani-King argues that, as a matter of law,
written agreements alone are insufficient to determine
employment status. And, two, Jani-King argues that
franchises are inherently different from other types of
business relationships and that franchise system controls
should be categorically excluded from consideration when
determining whether an employment relationship exists.
Neither of these arguments persuades us that certifying the
class was an abuse of discretion.
1
Jani-King asserts that the test for employee status under
Pennsylvania law is not susceptible to proof through common
evidence. This is so, according to Jani-King, because “the
entire employment relationship must be examined in
determining whether it is an employment relationship.” C E
Credits OnLine v. Unemployment Comp. Bd. of Review, 946
A.2d 1162, 1168 (Pa. Commw. Ct. 2008). Jani-King notes
that “courts have repeatedly held that examining the written
terms of an agreement alone is not sufficient to determine
employment status.” (Jani-King Br. 19.) Therefore, Jani-King
argues, the district court erred as a matter of law “[b]y relying
on the terms of Jani-King’s common franchise documents, to
the exclusion of individual evidence of the actual
relationships between Jani-King and” franchisees. (Id. at 20.)

17
 We are not convinced that the terms of a written
agreement alone are never sufficient to determine
employment status. Jani-King cited Urbano v. STAT Courier,
Inc., 878 A.2d 58 (Pa. Super. Ct. 2005), a class action WPCL
case in which the plaintiff delivery drivers argued they were
misclassified. In that case, the Superior Court stated that,
“[w]hile [an] agreement [is] relevant when identifying
whether an employee/employer relationship exists, it is just
one of the criteria to be utilized.” Id. at 62. The trial court had
granted judgment on the pleadings, finding that the plaintiffs
were independent contractors as a matter of law because the
driver agreement repeatedly identified drivers as independent
contractors. But the Superior Court reversed because there
were disputed facts that the alleged employer exercised
control to a greater degree than provided by the agreement.
Id. In this case, there is no assertion that the agreement and
manuals do not control.
We are equally unpersuaded by two other cases relied
upon by Jani-King, Jones v. Century Oil U.S.A., Inc., 957
F.2d 84 (3d Cir. 1992), and Kurbatov v. Department of Labor
& Industry, 29 A.3d 66 (Pa. Super. Ct. 2011). Jani-King cited
Jones for its statement that “it is the actual practice between
the parties that is crucial.” Jones, 957 F.2d at 87 (quoting
George v. Nemeth, 233 A.2d 231, 233 (Pa. 1967)). Kurbatov
similarly held that it is the “actual working relationship
between worker and employer” that is determinative. 29 A.3d
at 70. But in both these cases, the courts were responding to
an argument by the defendant that the worker was an
independent contractor because the agreement identified the
worker as an independent contractor. Jones, 957 F.2d at 87;
Kurbatov, 29 A.3d at 70. These courts were contrasting the
“actual practice” and “actual working relationship” against
the labels used in an agreement. It is these labels that are not

18
determinative. Jones, 957 F.2d at 86 (“[T]he determining
factor is not the way in which plaintiffs or defendant regards
this relationship but ‘what it really was under the facts and
applicable rules of law.’” (quoting Feller v. New Amsterdam
Cas. Co., 70 A.2d 299, 302 (Pa. 1950))).
The provisions of an agreement may be evidence of what
the actual practice or working relationship is. In Kurbatov, for
example, the Superior Court affirmed an order of the
Pennsylvania Department of Labor and Industry, which had
determined that an employment relationship existed. The
Department of Labor and Industry relied on the agreement,
even though the employer’s testimony conflicted with the
agreement. The Department of Labor and Industry was
entitled to weigh the evidence and rely on the documentary
evidence to the exclusion of testimony. Kurbatov, 29 A.3d at
72. Compare this to Jones, where we vacated a directed
verdict because there was testimony that the right to control
was “not fully reflected in the written agreements.” Jones,
957 F.2d at 88–89 & n.3.
The three decisions cited by Jani-King contrast with
Green v. Independent Oil Co., 201 A.2d 207 (Pa. 1964).
Green was a vicarious liability case: The defendant company
argued it was not responsible for the negligence of a worker
whom the company alleged was an independent contractor.
The “sole evidence of the relationship” between the worker
and the company was the agreement. Id. at 211. Since the
terms of the agreement were not in dispute, the determination
of the relationship was a question of law for the court. Id. “An
examination of the . . . agreement in its entirety indicate[d]
clearly and convincingly that the relationship . . . was that of
independent contractee-contractor, not employer-employee.”
Id. Under certain circumstances, therefore, an employment

19
relationship—or the lack of one—can be determined by
examining the documents alone.
Because documentary evidence can be sufficient to
resolve the multifactor employment status test, it was not an
error of law for the District Court to rely on this evidence in
ruling on class certification.
2
Jani-King and the amicus International Franchise
Association stress that franchising is an important and
beneficial way of conducting business that is fundamentally
different from other situations involving misclassification
claims. They both assert that an adverse decision “directly
threatens the viability of franchising in Pennsylvania.” (Jani-
King Br. 2; see Amicus Br. 23.) Jani-King argues that the
system controls inherent in franchising should be irrelevant
when considering whether an alleged employer has the right
to exercise day-to-day control.
Some case law lends credence to this position. For
example, we have noted that “[s]ome degree of control by the
franchisor over the franchisee would appear to be inherent in
the franchise relationship and may even be mandated by
federal [trademark] law.” Drexel, 582 F.2d at 786 (citation
omitted). In Myszkowski v. Penn Stroud Hotel, Inc., 634 A.2d
622, 627 (Pa. Super. Ct. 1993), for example, the Pennsylvania
Superior Court held that the franchise system controls
imposed by Best Western “addresse[d] the result of the work
and not the manner in which it is conducted.”
Jani-King also cites cases from other jurisdictions,
including a California case involving Jani-King, Juarez v.
Jani-King of California, Inc., 273 F.R.D. 571 (N.D. Cal.
2011). In that case, the district court found “it likely that
under California law, a franchisee must show that the

20
franchisor exercised ‘control beyond that necessary to protect
and maintain its interest in its trademark, trade name and
goodwill’ to establish a prima facie case of an employer-
employee relationship.” Id. at 583 (quoting Cislaw v.
Southland Corp., 6 Cal. Rptr. 2d 386, 394 (Ct. App. 1992)).
Once the district court “set[] aside the policies required to
protect Jani-King’s service mark and goodwill, [it found] very
little—if any—common evidence tending to prove an
employer-employee relationship between Jani-King and its
franchisees.” Id. In the instant case, the District Court
discounted Juarez because Pennsylvania law “does not
distinguish between controls put in place to protect a
franchise’s goodwill and intellectual property and controls for
other purposes.” (App. 29.) We have found no Pennsylvania
case holding otherwise. The District Court did not err by
discounting Juarez.
The Pennsylvania cases cited by Jani-King do not stand
for the proposition that franchise system controls are
somehow categorically excluded from consideration in the
employee–independent contractor analysis. As we succinctly
stated in Drexel,
the mere existence of a franchise
relationship does not necessarily trigger
a master-servant relationship, nor does
it automatically insulate the parties
from such a relationship. Whether the
control retained by the franchisor is
also sufficient to establish a master-
servant relationship depends in each
case upon the nature and extent of such
control as defined in the franchise
agreement or by the actual practice of
the parties.

21
Drexel, 582 F.2d at 786. Under Pennsylvania law, no special
treatment is accorded to the franchise relationship. A
franchisee may be an employee or an independent contractor
depending on the nature of the franchise system controls.
IV
The Plaintiffs’ WPCL misclassification claim can be
resolved by the evidence that is common to the class. We find
no clearly erroneous finding of fact or errant conclusion of
law in the District Court’s judgment. We therefore conclude
that the District Court did not abuse its discretion by
certifying the class. We will affirm the District Court’s class
certification order.

22
Williams, et al. v. Jani-King of Philadelphia, Inc., et al., No.
15-2049, dissenting.

COWEN, Circuit Judge.

Franchising constitutes “a bedrock of the American
economy.” Queen City Pizza, Inc. v. Domino’s Pizza, Inc.,
124 F.3d 430, 433 (3d Cir. 1997). Yet the majority’s opinion
threatens the viability of this basic economic bedrock. I do
not believe that such a result is consistent with either basic
class action principles, the nature and importance of the
franchisor-franchise relationship, or prior franchising case
law. I predict that the Pennsylvania Supreme Court would
ultimately hold that controls necessary to protect a
franchisor’s trademark, trade name, and goodwill—in short,
“franchise system controls”—are insufficient by themselves
to establish the existence of an employer-employee
relationship between the franchisor and its franchisees. In
this case, the Plaintiffs’ purported common evidence merely
sets forth various franchise system controls. Because of the
absence of common evidence tending to prove that the
franchisees are employees of the franchisor, the District Court
abused its discretion by certifying a class of Jani-King
franchisees. I therefore must respectfully dissent.

Under Federal Rule of Civil Procedure 23(b)(3), a
class action may be maintained if “the questions of law or fact
common to class members predominate over any questions
affecting only individual members.” The majority
acknowledges that “[t]his is a challenging standard to meet
that requires the district court to undertake ‘a rigorous
analysis.’” (Maj. Op. at 10 (quoting Wal-Mart Stores, Inc. v.
Dukes, 131 S. Ct. 2541, 2551 (2011)).) In fact, predominance

1
depends on the nature of the evidence and whether proof of
the elements of the cause of action requires individual
treatment. See, e.g., In re Hydrogen Peroxide Antitrust Litig.,
552 F.3d 305, 311-12 (3d Cir. 2008). “Because of this
consideration, addressing predominance ‘[f]requently . . .
entail[s] some overlap with the merits of the plaintiff’s
claim.’ Wal-Mart, 132 S. Ct. at 2551.” (Id. at 11.) In short,
we must “examine the elements of plaintiffs’ claim ‘through
the prism’ of Rule 23 to determine whether the District Court
properly certified the class.” Hydrogen Peroxide, 552 F.3d at
311 (quoting Newton v. Merrill Lynch, Pierce, Fenner &
Smith, Inc., 259 F.3d 154, 181 (3d Cir. 2001)). The district
court should envision the form a representative trial of the
claim will take and then conduct a rigorous assessment of the
available evidence as well as the methods that the plaintiff
proposes to use to prove his or her claim. See, e.g., id. at
311-12; Sherman v. Am. Exp., Inc., Civil Action No. 09-575,
2012 WL 748400, at *8 (E.D. Pa. Mar. 8, 2012).

However, the majority purportedly refuses to answer
the basic question raised by Jani-King in its appeal—whether
“franchise system controls” make a franchisor the employer
of its franchisees under Pennsylvania’s multi-factor
employment test. Given the rigorous obligations imposed by
Rule 23, I do not see how we could avoid addressing this
basic question. The predominance inquiry turns on what
Pennsylvania law requires as evidence of employment status.
In other words, could Plaintiffs really show that Jani-King’s
franchisees are, in fact, its employees under Pennsylvania law
using the Jani-King franchise agreement and other evidence
common to the entire putative class? If, as a matter of state
law, controls that are necessary to protect the franchisor’s
own trademark, trade name, and goodwill are, by themselves,

2
not sufficient to make the franchisor the employer of its own
franchisees—and the common evidence in the record merely
implicates such “franchise system controls,” the Court then
must determine that Plaintiffs cannot possibly show that ‘each
element is capable of proof through evidence that is common
to the class,” Hydrogen Peroxide, 552 F.3d at 311.

In any event, the majority, despite its disclaimers,
effectively answers this basic question in the affirmative.
After all, it addresses at some length case law considering the
employee-independent contractor distinction under
Pennsylvania law, including two franchising decisions:
Drexel v. Union Prescription Centers, Inc., 582 F.2d 781 (3d
Cir. 1978), and Myszkowski v. Penn Stroud Hotel, Inc., 634
A.2d 622 (Pa. Super. Ct. 1993). It then upheld the District
Court’s ruling insofar as it “discounted” a class certification
opinion involving Jani-King (Maj. Op. at 21)—which held
that “it is likely that under California law, a franchisee must
show that the franchisor exercised ‘control beyond that
necessary to protect and maintain its interest in its trademark,
trade name and goodwill’ to establish a prima facie case of an
employer-employee relationship,” Juarez v. Jani-King of Cal.,
Inc., 273 F.R.D. 571, 583 (N.D. Cal. 2011) (quoting Cislaw v.
Southland Corp., 6 Cal. Rptr. 2d 386, 394 (Ct. App. 1992)).
Rejecting Juarez, the majority instead held that, “[u]nder
Pennsylvania law, no special treatment is accorded to the
franchise relationship” and that “[a] franchisee may be an
employee or an independent contractor depending on the
nature of the franchise system controls.” (Id. at 22.)
Obviously, this opinion will be cited as precedent (or, at the
very least, as dicta) for the proposition that, despite the nature
and importance of the franchisor-franchisee relationship,
franchise system controls may by themselves give rise to an

3
employer-employee relationship under a variety of different
statutory schemes (i.e., the WPCL, the Pennsylvania
Unemployment Compensation Act, and the Pennsylvania
Workers Compensation Act) as well as the doctrine of
vicarious liability. I further note that Jani-King now has the
burden of defending against a class action and that this
opinion will most likely lead to additional class action
litigation against other franchisors.

It appears that the Pennsylvania Supreme Court has
not expressly answered the specific question of whether or
not franchise system controls are sufficient by themselves to
establish the existence of an employer-employee relationship
between the franchisor and the franchisees. Given the nature
and importance of the franchisor-franchisee relationship,
existing Pennsylvania case law like Drexel and Myszkowski,
and franchising cases from other jurisdictions, I predict that
the state supreme court would answer this question in the
negative.1

1
Like the majority, I look, in the absence of state
supreme court precedent directly on point, to “‘decisions of
state intermediate appellate courts, of federal courts
interpreting that state’s law, and of other state supreme courts
that have addressed the issue,’ as well as to ‘analogous
decisions, considered dicta, scholarly works, and any other
reliable data tending convincingly to show how the highest
court in the state would decide the issue at hand.’” Spence v.
ESAB Grp., Inc., 623 F.3d 212, 216-17 (3d Cir. 2010)
(quoting Norfolk So. Ry. v. Basell USA Inc., 512 F.3d 86, 92
(3d Cir. 2008)).

4
 Franchise system controls constitute an essential
aspect of the franchising mechanism. The Pennsylvania
Supreme Court has recognized that “‘the franchise has
evolved into an elaborate agreement by which the franchisee
undertakes to conduct a business or sell a product or service
in accordance with methods and procedures prescribed by the
franchisor, and the franchisor undertakes to assist the
franchisee through advertising, promotion and other advisory
services.’” Atl. Richfield Co. v. Razumic, 390 A.2d 736, 740
(Pa. 1978) (quoting Piercing Pagoda, Inc. v. Hoffner, 351
A.2d 207, 211 (Pa. 1976)). The franchisor’s basic product is
the “franchise itself.” Piercing Pagoda, 351 A.2d at 211
(citations omitted). Product uniformity and quality control
attract customers and are critical to the success of both the
franchisees as well as the franchisor. See, e.g., Queen City
Pizza, 124 F.3d at 433; Piercing Pagoda, 124 F.3d at 211. In
fact, a “trademark owner risks losing his rights” by failing to
maintain adequate control over “the quality of his licensees’
products.” Ungar v. Dunkin’ Donuts of Am., Inc., 531 F.2d
1211, 1216 n.6 (3d Cir. 1976) (citing 15 U.S.C. § 1127).

This franchisor-franchisee relationship thereby offers
several important advantages to franchisors and franchisees
alike. For example, the franchisee may benefit from existing
inventory, training, and directions for market development,
and, in addition, the creation and maintenance of goodwill
through strict system controls should help to bring in more
customers for the franchisee. See, e.g., id. at 1222-23;
Piercing Pagoda, 351 A.2d at 211-12.

Given these characteristics, it is not surprising that the
franchising sector represents a major component of the
economy. Nationally, this sector employs millions of people,

5
has payrolls in the billions, and generate trillions of dollars in
total sales. See, e.g.¸ Patterson v. Domino’s Pizza, LLC, 333
P.3d 723, 733 (Cal. 2014). Amicus International Franchise
Association estimates that, in 2007, Pennsylvania had 29,514
franchise establishments, with a total payroll of $10.7 billion
and more than $82.4 billion in output.

As the majority admits, we stated in Drexel that
“‘[s]ome degree of control by the franchisor over the
franchisee would appear to be inherent in the franchise
relationship and may even be mandated by federal
[trademark] law.’” (Maj. Op. at 20 (quoting Drexel, 582 F.2d
at 786).) While the Drexel Court then ruled that the district
court erred by granting summary judgment in favor of a drug
store franchisor, we did so because, among other things, the
agreement at issue was so broadly drafted “as to render
uncertain the precise nature and scope of [the franchisor’s]
rights vis-à-vis its franchisee.” Drexel, 582 F.2d at 788. We
even assumed that the franchisor’s right to control various
facets of the franchisee’s operations—ranging from the
appearance and contents of the franchisee’s store to the color
of its delivery trucks—implicated the franchisor’s interest in
the result of the work as opposed to the manner in which the
franchisee operated. Id. After all, “‘[t]he hallmark of an
employee-employer relationship is that the employer not only
controls the result of the work but has the right to direct the
manner in which the work shall be accomplished; the
hallmark of an independent contractee-contractor relationship
is that the person engaged in the work has the exclusive
control of the manner of performing it, being responsible only
for the result.’” Id. at 785 (quoting Green v. Indep. Oil Co.,
201 A.2d 207, 210 (Pa. 1964)).

6
 More recently, the Pennsylvania Superior Court
determined that summary judgment was properly granted in
favor of a hotel marketing organization sued by an individual
who had been sexually assaulted by a third party in one of its
affiliated hotels. Myszkowski, 634 A.2d at 623-30.
According to Myszkowski, “the owners of [the hotel]
managed the day-to-day operations of the business and made
all the decisions incidental to this operation.” Id. at 626-27.
Expressly distinguishing Drexel on the grounds that the
franchise agreement was so broadly written as to give the
drug store franchisor the power to impose virtually anything it
desired, id. at 628 n.6, the state appellate court concluded that
“the fact that [the organization] sets certain standards in order
to maintain a uniform quality of inn service only addresses
the result of the work and not the manner in which it is
conducted.” Id. at 627; see also, e.g., Smith v. Exxon Corp.,
647 A.2d 577, 582 (Pa. Super. Ct. 1994) (“As in
Myszkowski, here, the standards were implemented to
maintain a uniform quality of service.”). In reaching this
conclusion, it thereby took into account the nature of the
franchisor-franchisee relationship, indicating that a franchise
represents “‘a uniform system of inn service—that carried
with it an obligation to maintain certain standards prescribed
by the seller.’” Myszkowski, 634 A.2d at 627-28 (quoting
Schear v, Motel Mgmt. Corp. of Am., 487 A.2d 1240, 1249
(Md. 1985)); see also, e.g., id. at 628 (“‘The general purpose
of the contract is the maintenance of uniform service within,
and public good toward, the Ramada Inn system.’” (quoting
Hayman v. Ramada Inn, 357 S.E.2d 394, 397 (N.C. Ct. App.
1987))).

In fact, Myszkowski relied on a similar ruling by the
Pennsylvania Supreme Court. In Green v. Independent Oil

7
Co., 201 A.2d 207 (Pa. 1964), an oil company was named as
a defendant in litigation arising out of a deadly explosion at
one of its dealer stations, id. at 208-09. According to the state
supreme court, the trial court erred in submitting the question
of whether there was an employer-employee relationship
between the oil company and the dealer to the jury. Id. at
210-11. As the Pennsylvania Superior Court aptly explained,
several considerations were “[s]ignificant” to the outcome in
Green: (1) the agreement between the parties specifically
disclaimed the existence of any agency relationship; (2) all
profits went to the dealer; (3) the sales tax permits and
electric bills were in the dealer’s name; (4) the dealer hired,
fired, and paid his own employees; (5) all monies were kept
by the dealer in the dealer’s personal bank account; and (6)
the dealer purchased the oil company’s products.
Myszkowski, 634 A.2d at 626 (citing Green, 201 A.2d at 210)
(footnote omitted).

Accordingly, “[s]ome case law lend credence” to the
line of reasoning offered by Jani King (and the amicus).
(Maj. Op. at 20.) As I have already noted, the Juarez court
recently held that, under California law, a franchisee must
show that the franchisor (Jani-King itself) exercised “‘control
beyond that necessary to protect and maintain its interest in
its trademark, trade name and goodwill.’” Juarez, 273 F.R.D.
at 583 (quoting Cislaw, 6 Cal. Rptr. 2d at 394). “As such, the
Court can safely exclude from the employee-employer
relationship analysis facts that merely show the common
hallmarks of a franchise.’” Id. Subsequently, the California
Supreme Court essentially adopted the Juarez approach. It
concluded that a franchisor will be held vicariously liable
“only if it has retained or assumed a general right of control
over factors such as hiring, direction, discipline, discharge,

8
and relevant day-to-day aspects of the workplace behavior of
the franchisee’s employees.” Patterson, 333 P.3d at 739
(footnote omitted). The Maine Supreme Judicial Court and
the Wisconsin Supreme Court have reached similar
conclusions. See Rainey v. Langen, 998 A.2d 342, 347 (Me.
2010) (“[C]ourts commonly distinguish between control over
a franchisee’s day-to-day operations and ‘controls designed
primarily to insure “uniformity and the standardization of
products and services.”’” (citation omitted))); Kerl v. Dennis
Rasmussen, Inc., 682 N.W.2d 328, 332 (Wis. 2004)
(concluding that “the marketing, quality and operational
standards commonly found in franchise agreements are
insufficient to demonstrate the existence of a master/servant
relationship for all purposes or as a general matter”).

Under these circumstances, the District Court was
wrong to conclude that Pennsylvania law “does not
distinguish between controls put in place to protect a
franchise’s goodwill and intellectual property and controls for
other purposes.” Myers v. Jani-King of Philadelphia, Inc.,
Civil Action No. 09-1738, 2015 WL 1055700, at *14 (E.D.
Pa. Mar. 11, 2015). Neither the District Court nor the
majority cites to any case law expressly refusing to draw such
a distinction. On the contrary, the existing Pennsylvania case
law weighs in favor of distinguishing controls “inherent in the
franchise relationship,” Drexel, 582 F.2d at 786 (citation
omitted). After all, such a distinction is consistent with the
fundamental and well-established notion that, while an
employer has the right to direct the manner of performance,
an independent contractee merely has the right to control the
result of the work. See, e.g., Rainey, 998 A.2d at 349 (“The
traditional test allows a franchisor to regulate the uniformity
and the standardization of products and services without

9
risking the imposition of vicarious liability. If a franchisor
takes further measures to reserve control over a franchisee’s
performance of its day-to-day operations, however, the
franchisor is no longer merely protecting its mark, and
imposing vicarious liability may be appropriate.’” (citing,
inter alia, Drexel, 582 F.2d at 786)); Myszkowski, 634 A.2d
at 627 (explaining that fact hotel marketing organization set
certain standards to maintain uniform service quality
implicated “the result of the work and not the manner in
which it is conducted”). I further note that California—like
Pennsylvania—treats the right to control as the most
important factor in a multi-factor employment inquiry.2 See,
e.g., Juarez, 273 F.R.D. at 581.

I ultimately conclude that Pennsylvania’s highest court
would not allow “the very thing that defines [franchising]—

2
I do question whether, in these circumstances, the
existence of an employment relationship can really be
determined based solely on documentary evidence. After all,
Pennsylvania law mandates a multi-factor test requiring the
courts to examine “the entire employment relationship.” C E
Credits v. Unemployment Comp. Bd. of Review, 946 A.2d
1162, 1168 (Pa. Commw. Ct. 2008) (citing Beacon Flag Car
Co. v. Unemployment Comp. Bd. of Review, 910 A.2d 103,
108 (Pa. Commw. Ct. 2006)). “[N]o one factor is dispositive
of one’s status and . . . each case must be determined on its
own facts.” Zimmerman v. Commonwealth, 522 A.2d 43, 45
(Pa. 1987). Even if it is typically the alleged employee who
offers evidence of actual control or performance, I fail to see
why such evidence may not also weigh in favor of the
putative employer in certain circumstances under what is a
rather open-ended inquiry.

10
the ‘uniformity of product and control of its quality and
distribution’”—to be used to put at risk this critical and
generally beneficial sector of our economy (Appellants’
Reply Brief at 1-2 (quoting Atl. Richfield, 390 A.2d at 740)).
See, e.g., Patterson, 333 P.3d at 726 (“Analysis of the
franchise relationship for vicarious liability purposes must
accommodate these contemporary realities. The imposition
and enforcement of a uniform marketing and operational plan
cannot automatically saddle the franchisor with responsibility
for employees of the franchisee who injure each other on the
job.”). In turn, the approach I set out here does not grant
franchisors any sort of immunity from either possible
vicarious liability or generally applicable employment laws
like the WPCL. Unlike Jani-King, I do not believe that
franchise system controls are simply irrelevant to the
employment inquiry. Instead, such controls are insufficient
by themselves to establish the existence of an employer-
employee relationship. The inquiry thereby must go beyond
the mere use of labels like “franchisor” and “franchisee” and
assess whether the controls at issue exceed what is necessary
to protect a franchisor’s trademark, trade name, or goodwill.
See, e.g., Drexel, 582 F.2d at 786 (“[T]he mere existence of a
franchise relationship does not necessarily trigger a master-
servant relationship, nor does it automatically insulate the
parties from such a relationship. Whether the control retained
by the franchisor is also sufficient to establish a master-
servant relationship depends in each case upon the nature and
extent of such control as defined in the franchise agreement
or by the actual practice of the parties.” (citations omitted)).

Applying this approach, the next step is to consider the
purported common evidence offered by Plaintiffs and identify
the various policies that constitute controls instituted as

11
necessary to protect the franchisor’s own trademark, trade
name, and goodwill. Jani-King provides an especially
thorough—and persuasive—explanation for why “each of the
contractual provisions and policies identified by the district
court is simply an example of a common franchise system
control, not a manifestation of the type of day-to-day
supervisory control that indicates an employment
relationship.” (Appellants’ Brief at 38.) To give just one
example, it appropriately notes that, while the District Court
pointed to Jani-King’s right to dictate what the franchisees
must wear on the job, such uniform requirements are
generally considered necessary to protect the goodwill
associated with the franchise brand. See, e.g., Kerl, 682
N.W.2d at 341 (“The agreement specifies standards regarding
containers, uniforms, paper goods, and other packaging
supplies.”). Admittedly, Jani-King does appear to possess a
great deal of power, especially with respect to customer
negotiations, account assignments, and billing. Specifically,
the franchisor negotiates and contracts with a prospective
customer and then offers this contract to the respective
franchisee (which is not a contractual party itself). Jani-King
likewise invoices customers and controls billing and
accounting. In contrast, it was the hotel in Myszkowski (and
not the marketing organization) that set its own prices.
Myszkowski, 534 A.2d at 627. Nevertheless, “[a] franchisee
may accept or reject the contract” (Maj. Op. at 5), and they
“may solicit new business within certain parameters” (id. at
6). See, e.g., Applied Measurement Prof’ls, Inc. v.
Unemployment Comp. Bd. of Review, 844 A.2d 632, 636
(Pa. Commw. Ct. 2004) (finding that worker was independent
contractor because, inter alia, she was “free to accept or reject
an assignment”). While Jani-King sets certain quality
standards, it appears that the franchisor does not specify the

12
specific methods the franchisees must utilize to perform the
cleaning work. Finally, although Jani-King requires its
franchisees to keep certain employment records, “franchisees
otherwise have total control over hiring and firing
employees” (id. at 7). See, e.g., Myszkowski, 634 A.2d at
627 (noting that hotel hired, fired, paid, and supervised its
own employees).

“Once [we] set[ ] aside the policies required to protect
Jani-King’s service mark and goodwill, [there appears to be]
very little—if any—common evidence tending to prove an
employer-employee relationship between Jani-King and its
franchisees.” Juarez, 372 F.R.D. at 583. In fact, the record is
replete with individual evidence—franchisees vary widely in
size ranging from small operations consisting of merely the
individual franchisee to million-dollar enterprises with
multiple employees. Accordingly, the District Court clearly
committed reversible error by finding that common questions
of law and fact predominate over individual ones.

For the foregoing reasons, I would vacate the class
certification order and remand for further proceedings on an
individual (non-class action) basis.

13