What was the date that the court dismissed the case related to the Carls litigation after the parties reached a settlement?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
es of any and all claims, including claims arising from this litigation, all without any admission of liability on any party. The Court granted the parties' stipulated motion to dismiss the case on October 14, 2022.
(2) Ashlie Harris v. CJ Star, LLC, Carl's Jr. Restaurants LLC, and DOES 1-10, (United States District Court, Eastern District of Washington, Spokane Division, Case No 2:18-cv-00247, filed August 3, 2018). On August 3, 2018, Ashlie Harris, a former employee of a Carl's Jr. franchisee, filed a lawsuit in the federal district court for the Eastern District of Washington. The plaintiff alleged that certain provisions in the applicable franchise agreement between us and our franchisees violate federal and state anti-trust statutes as they allegedly restrict the ability of our franchisees or company-owned stores from soliciting or hiring the employees of other of our franchisees or company-owned stores. The complaint sought to certify a class of franchisee employees in the state of Washington and recover treble damages stemming from
alleged underpayment of wages for current and former employees located in the state of Washington from July 12, 2014 to present. We denied that the provisions violate any law and filed a Motion to Dismiss the case. On or about April 1, 2019, the parties reached an agreement to settle the litigation with the following terms: (a) Defendants will pay Harris $5,000 and attorneys' fees in the aggregate amount of $20,000, (b) CJR has obtained amendments of the existing franchise agreements with Washington franchisees to remove non-solicitation/no-hire provisions, to the extent such provisions existed in the first place, and (c) CJR agreed not to enforce the disputed provision in existing agreements with Washington franchisees. The Court granted the parties' stipulated motion to dismiss the case on April 23, 2019.
(3) Larry Rice v. By The Rio, LLC, Carl's Jr. Restaurants LLC, and DOES 1-10, (United States District Court, District of Colorado, Case No 1:19-cv-00129-STV, filed January 15, 2019). On January 15, 2019, Larry Rice, a former employee of a Carl's Jr. franchisee, filed a lawsuit in the federal district court for the District of Colorado. The plaintiff alleged that certain provisions in the applicable franchise agreement between us and our franchisees violate federal and state anti-trust statutes as they allegedly restrict the ability of our franchisees or company-owned stores from soliciting or hiring the employees of other of our franchisees or company-owned stores. The complaint sought to certify a class of franchisee employees in the state of Colorado and recover treble damages stemming from alleged underpayment of wages for current and former employees located in the state of Colorado from July 12, 2014 to present. On or about April 1, 2019, the parties reached an agreement to settle the litigation with the following terms: (a) Defendants will pay Rice $2,500 and attorneys' fees in the aggregate amount of $7,500, (b) CJR will amend its franchise agreements with the Colorado franchisee named in the lawsuit to remove non-solicitati
Source: Item 3 — LITIGATION (FDD pages 21–24)
What This Means (2024 FDD)
According to the 2024 Carls FDD, there are two instances where the court granted a motion to dismiss a case on April 23, 2019, after the parties reached a settlement. The first case, Ashlie Harris v. CJ Star, LLC, Carl's Jr. Restaurants LLC, involved allegations that certain provisions in Carls' franchise agreements violated federal and state anti-trust statutes. The settlement terms included the defendants paying Harris $5,000 and $20,000 in attorney's fees, Carls amending franchise agreements with Washington franchisees to remove non-solicitation/no-hire provisions, and Carls agreeing not to enforce the disputed provision in existing agreements with Washington franchisees.
The second case, Larry Rice v. By The Rio, LLC, Carl's Jr. Restaurants LLC, also involved similar allegations regarding anti-trust statutes. The settlement terms included the defendants paying Rice $2,500 and $7,500 in attorney's fees, Carls amending its franchise agreements with the Colorado franchisee named in the lawsuit to remove non-solicitation/no-hire provisions, and Carls agreeing not to enforce the disputed provision in existing agreements with Colorado franchisees.
These lawsuits are related to the enforcement of non-solicitation/no-hire provisions within the franchise agreements. For a prospective franchisee, this indicates that Carls has faced legal challenges regarding these types of provisions and has taken steps to address these concerns by amending franchise agreements and agreeing not to enforce the disputed provisions. This may provide some assurance that Carls is responsive to legal challenges and willing to modify its agreements to comply with applicable laws.