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The Federal Trade Commission filed an amicus brief with the Supreme Judicial Court for the Commonwealth of Massachusetts advising the court that the FTC’s Franchise Rule does not address and cannot be used to determine whether franchisees governed by the FTC rule are employees under state law. The Commission took no position on how the state law applies. The case is Patel, et al. v. 7-Eleven, Inc.

The FTC’s brief argues that the Franchise Rule requires franchisors to make specified disclosures to franchisees but does not address whether a franchisee is an employee or an independent contractor under Massachusetts law and does not preempt state law. 7-Eleven therefore may not rely on the Rule to govern its status as an employer under state law.

The Commission voted 3-1 to file the amicus brief with Commissioner Noah J. Phillips dissenting.

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