Lawsuit Status

BY PAUL LOBANA, NCASEF VICE CHAIRMAN, PRESIDENT, SOUTHERN CALIFORNIA FOA

When I signed on as a plaintiff in the National Coalition-backed lawsuit filed in the United States District Court, for the Central District of California, Western Division, back in October 2017, not a single FOA president in the country voted against this lawsuit.

Our suit alleged that 7-Eleven, Inc. was in violation of the Federal Labor Standards Act and California employment laws in connection with its operation of the 7-Eleven convenience store  system. Because the suit was being filed in California, we needed California franchisees to stand up and lead the charge for fairer treatment by 7-Eleven, free from the overarching and suffocating control of SEI, which is the subject of the lawsuit. As the current president of the Southern California FOA, the largest FOA in the country, I stepped up and put my name on the lawsuit with everyone’s consent.

With the introduction of the new agreement in early 2018, we wanted a chance to fight for more fair conditions, and everybody wanted to see an agreement in our favor. After 7-Eleven abruptly stopped meeting with the Franchise Agreement Committee, and reneged on its promises to provide important information in the interest of transparency, giving us no chance at all to improve our lot as franchisees, we had no other recourse than to take legal action.

After our suit was dismissed in March 2018, on the basis that we couldn’t prove an employment relationship exists between franchisees and the company, a few franchisees got concerned, and
made overtures to 7-Eleven about repairing the relationship and being buddy-buddy again, with no promise of getting anything in return.

Until the case is resolved, we should do everything we can legally to continue the fight. 7-Eleven, meanwhile, is trying to stop our ability to continue the legal fight by asking us to sign new agreements that waive our rights in the case. Our lawyers have asked the Court to stop 7-Eleven from forcing us to make this choice. On Wednesday February 13, we had a hearing in the 9th Circuit Court of Appeals, and hopefully within the next couple of months, we will know whether the Court will reverse the District Court and reinstate our case, or at least know whether we will be asked to sign away our rights in the case in order to renew our contracts with 7-Eleven.

While the legal case is being fought in court, at the same time, I believe we should work to bridge the gap with 7-Eleven and work on improving communications without hurting the everyday work of our franchisees. We can’t abandon the legal fight, and we can’t ignore the fact that franchisees have to have a relationship with 7-Eleven. We absolutely have to patch things up with 7-Eleven and are looking forward to the Court’s resolution of our case. We will continue to follow the advice of our litigation counsel on how to proceed.

We just cannot go to 7-Eleven right now and say, “We give up. We want to patch things up with you.” Because we know that 7-Eleven will offer nothing in return. They have refused every olive branch that anyone has extended. So we are going to follow this to the end.

Some franchisees are biting the bullet and swallowing this completely and hideously unfair agreement and want to move on, but they are not happy—and how could they be! The longer-tenured franchisees, looking to ride out their contracts, don’t like this agreement because it is grossly unfair to franchisees. In some areas of the country franchisees are waiting to see if they will have the chance to purchase Sunoco stores being converted. They will make less money with the 2019 agreement and are wondering if they need to invest more money in additional stores. For people at or near the end of their careers, they don’t want to invest anymore.

I always got along with 7-Eleven, and I enjoyed working with company people, but we had no choice but to stand up and say we are not going to take it anymore. I stood up because it was the right thing to do. I thought that 7-Eleven would see that their relationship with franchisees is their most important asset and that they would come up with a fair agreement and treat us with respect. Alas, they decided to go all in.

Eventually we will have to work with 7-Eleven and bridge the gap, but at this moment, we are waiting on the court’s decision. We will follow our litigation counsel’s advice, but eventually 7-Eleven will come to its senses and realize that a mutually respectful, transparent, and fair relationship with its franchisees is the only path to a secure future for all concerned.