The Franchise Memorandum

The Minnesota federal district court recently transferred to the Northern District of Texas a putative collective action against franchisor Jani-King International and two wholly-owned subsidiaries. Von Brugger v. Jani-King of Minn., Inc., 2013 U.S. Dist. LEXIS 74548 (D. Minn. May 28, 2013). The defendants are Texas corporations headquartered in Texas. Von Brugger, the plaintiff, who worked primarily as an assistant operations manager for Jani-King of Minnesota, claims that the defendants intentionally misclassified him (and other employees) as exempt from the Fair Labor Standards Act so that the defendants could avoid paying overtime.

In granting the defendants’ motion to transfer, the court considered it most significant that if the case proceeded as a collective action, the Northern District of Texas would likely be the only appropriate forum because Minnesota would lack personal jurisdiction over several necessary defendants. In addition, the court discounted the typical deference to the plaintiff’s choice of forum because there were more than 130 potential opt-in plaintiffs who worked for Jani-King affiliates across the United States. Finally, the court briefly considered the named plaintiff’s argument that he could not afford to travel to Texas, but observed that he did not substantiate that claim.