HR Alert

AZ: Franchisor Generally Not Considered Employer or Co-Employer of Franchisee or Franchisees' Employees

Law Also Addresses Owners of 'Marks,' and Licensees of 'Marks'

A new law in Arizona provides that, for purposes of state labor law, a franchisor is not an employer or co-employer of either a franchisee or an employee of the franchisee.

An exception exists if the franchisor agrees (in writing) to assume the role of employer or co-employer of the franchisee or the employee of the franchisee.

'Mark' Owners Generally Not Employers of Licensees
The new law also provides that, for purposes of state labor law, the owner of a mark is not an employer or co-employer of either the licensee or an employee of the licensee, unless the owner of the mark agrees (in writing) to assume the role of employer or co-employer of the licensee or the employee of the licensee.

A "mark" is defined as any service mark or trademark. A service mark is any word, name, symbol, or device (or any combination of these items) used by a person to identify services provided or sold by that person. A trademark is any of the aforementioned items or combination of those items used by a person to identify goods made or sold by that person.

"Licensee" means a third party to whom the owner of a mark licenses the owner's mark for the purpose of independently conducting business using the licensed mark.

The new law takes effect 90 days after the First Regular Session of the Fifty-Third Legislature adjourns. Click here for anticipated announcements regarding the general effective date.

The text of the law is available by clicking here.


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