NLRB Proposes New Rule to Revert Franchisor Liabilities to Franchisees Publication: Blue Mau Mau
Posted on Blog January 26, 2016
Where a business, especially a franchisee, is charged with a civil violation by the government, the consequences can be severe. It is extremely important to have legal representation under these circumstances. Many civil violations punish the same conduct as criminal charges, but the government can get around certain due process requirements by prosecuting them through administrative agencies with their own separate courts. In this way, many civil violation proceedings are a “wolf in sheep’s clothing.” Just because it doesn’t feel like a criminal trial, and because you are not afforded the same rights, does not mean that you will not suffer the same consequences- including stigma in the community, loss of business licenses, and loss of rights under business contracts, especially contracts with a franchisor or a commercial landlord.
Fortunately, appellate courts have power to review the findings of administrative tribunals to make sure that certain aspects of due process are followed, such as notice and an opportunity to be heard, and the right to confront one’s accuser. Specifically, where administrative agencies have proved their claims based solely on hearsay and denied accused parties the right to cross-examine the witnesses to the alleged violations, appellate courts have overturned administrative decisions and found that the tribunals abused their discretion.
It goes without saying that if you don’t know your rights, you cannot assert them. Because the fines for civil violations can be very small, many business owners decide that fighting the violation is not a battle worth waging. This has turned out to be a hugely regrettable mistake for some businesses, particularly when contracts (such as Franchise Agreements) allow for termination by one party upon findings of certain violations.