Mujo v. Jani-King International, Inc.

20-111
Mujo v. Jani-King International, Inc.
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
August Term, 2020
(Argued: June 2, 2021 Decided: September 9, 2021)
Docket No. 20-111
_____________________________________
SIMON MUJO and INDRIT MUHARREMI, on behalf of themselves and all others
similarly situated,
Plaintiffs-Appellants,
–v.–
JANI-KING INTERNATIONAL, INC., JANI-KING INC., and JANI-KING OF HARTFORD,
INC.,
Defendants-Appellees.
_____________________________________
Before: CALABRESI and MENASHI, Circuit Judges, and COTE, District Judge. *
_____________________________________
Appellants brought a class action on behalf of Connecticut-based
franchisees, in which they allege that their franchise agreement misclassifies
franchisees as independent contractors rather than employees. As employees, they
reason, the collection of franchise fees violates the Connecticut Minimum Wage
Act, Conn. Gen. Stat. § 31-71e, and the Connecticut anti-kickback statute, Conn.
Gen. Stat. § 31-73.
*
Judge Denise Cote, United States District Judge for the Southern District of New York,
sitting by designation.
The United States District Court for the District of Connecticut (Bolden, J.)
dismissed the Connecticut Minimum Wage Act claim and after discovery granted a
motion for summary judgment on the anti-kickback claim. In resolving both
motions, the district court concluded that even if the franchisees qualified as
employees under Connecticut law, the franchisor was permitted to collect the
franchise fees required by the franchise agreement. We AFFIRM.
JUDGE CALABRESI dissents from the Court’s opinion, and files a
dissenting opinion.
SHANNON LISS-RIORDAN
(Richard Hayber, on the brief),
Lichten & Liss-Riordan, P.C., Boston,
MA, for plaintiffs-appellants.
AARON D. VAN OORT (Kerry L.
Bundy, Larry E. LaTarte, on the
brief), Faegre Drinker Biddle &
Reath, LLP, Minneapolis, MN, for
defendants-appellees.
COTE, District Judge:
Defendants-Appellees Jani-King International, Inc., Jani-King, Inc., and
Jani-King of Hartford, Inc. (“Jani-King”) are franchisors of commercial cleaning
services. Jani-King requires its franchisees to pay a fee to acquire a Jani-King
franchise. Its customers then pay Jani-King for cleaning services provided by its
franchisees, and Jani-King deducts other fees from the payments made by
customers before it pays its franchisees. Plaintiffs-Appellants Simon Mujo and
Indrit Muharremi (“Appellants”) sued Jani-King on behalf of a class of current and
2
former Jani-King franchisees in Connecticut, alleging that this arrangement
violated Connecticut law.
The Appellants contend that Jani-King misclassified its franchisees as
independent contractors rather than employees of Jani-King. As employees, they
contend that Jani-King’s deductions from customer revenue were made in violation
of the Connecticut Minimum Wage Act, Conn. Gen. Stat. § 31-71e, and that Jani-
King’s collection of franchise fees unjustly enriched Jani-King. Connecticut’s
anti-kickback statute, Conn. Gen. Stat. § 31-73, prohibits an employer from
charging an employee fees as a condition of securing or continuing in employment,
and the Appellants reason that Jani-King was unjustly enriched by collecting fees
in violation of this statute. The district court (Bolden, J.) granted Jani-King’s
motion to dismiss the Appellants’ Minimum Wage Act claim and, after discovery,
granted Jani-King’s motion for summary judgment on the Appellants’ unjust
enrichment claim. For the following reasons, we affirm the judgment of the
district court.
BACKGROUND
Jani-King is a national provider of commercial cleaning services that
operates using a franchise model. Jani-King markets its cleaning services and
contracts with customers to provide cleaning services in accordance with terms
negotiated between Jani-King and its customers. Customers remit payment for the
3
cleaning services to Jani-King. Under its franchise model, prospective franchisees
initiate a business relationship with Jani-King by entering into a franchise
agreement. Franchisees are assigned to service Jani-King’s customers. Although a
franchisee may choose to decline a customer offered by Jani-King, if a franchisee
accepts a customer, it must accept the terms of the customer contract as negotiated
by Jani-King. Jani-King deducts certain fees as agreed upon in each franchisee’s
agreement with Jani-King and remits the remainder of a customer’s payments to
the franchisee.
When servicing Jani-King customers, franchisees are required to comply
with Jani-King’s brand standards, which include the use of certain cleaning
protocols and techniques specified by Jani-King. Franchisees and their work
product are subject to inspection, and franchisees who do not pass muster may be
subject to additional training or termination of their franchises. A Jani-King
franchisee, however, is not obligated to perform assigned cleaning jobs herself: she
may hire employees to perform the duties the franchisee agrees to accept from
Jani-King. Franchisees may also trade customers with other Jani-King franchisees
and may set their own work hours, subject to customer requirements. Finally,
franchisees may sell their franchises to third parties, subject to certain conditions.
In order to acquire a Jani-King franchise and take on customers, a
prospective franchisee must pay an initial franchise fee down payment and a
4
finder’s fee for each customer. Jani-King franchisees are also required to pay
additional fees over the course of the franchise relationship. Jani-King collects
these fees by deducting them from the revenue it receives from customers. The
deducted fees include accounting fees, royalty fees, advertising fees, and insurance
fees. All of the deducted fees are prescribed in the Jani-King franchise agreement.
The Appellants are Connecticut-based Jani-King franchisees. Appellant
Simon Mujo was a Jani-King franchisee from 2007 to 2016. He paid $44,175 in
initial fees to Jani-King in 2007 and paid other fees over the course of his franchise
agreement. Appellant Indrit Muharremi is a current Jani-King franchisee. He paid
$16,250 in initial fees at the commencement of his franchisee relationship with
Jani-King in 2014, and Jani-King has continued to deduct other fees from its
payments to Muharremi over the course of the franchise relationship.
On December 5, 2016, the Appellants filed a class action complaint in the
District of Connecticut, and on February 9, 2017, the Appellants filed an Amended
Complaint that pleaded Connecticut Minimum Wage Act and unjust enrichment
claims. Jani-King moved to dismiss the Amended Complaint in its entirety on
March 30, 2017. On March 31, 2018, the district court granted Jani-King’s motion
to dismiss the Connecticut Minimum Wage Act claim but denied Jani-King’s
motion to dismiss the unjust enrichment claim. Mujo v. Jani-King Int’l, Inc., 307
F. Supp. 3d 38 (D. Conn. 2018). The Appellants then moved to certify a class, and
5
on January 9, 2019, the district court granted the motion for class certification. On
June 10, Jani-King moved for summary judgment on the remaining unjust
enrichment claim, and on July 15, the Appellants filed a cross-motion for summary
judgment. In an opinion of December 21, 2019, the district court granted Jani-
King’s motion for summary judgment. Mujo v. Jani-King Int’l, Inc., 431
F. Supp. 3d 18 (D. Conn. 2019). This appeal followed.
DISCUSSION
The Appellants challenge both the district court’s 2018 opinion granting
Jani-King’s motion to dismiss their Connecticut Minimum Wage Act claim and the
district court’s 2019 opinion granting summary judgment to Jani-King on the
Appellants’ unjust enrichment claim. “We review a grant of summary judgment
de novo, and in so doing, we construe the evidence in the light most favorable to
the nonmoving party and draw all reasonable inferences in that party’s favor.”
Ketcham v. City of Mount Vernon, 992 F.3d 144, 148 (2d Cir. 2021). A district
court decision granting a motion to dismiss is also reviewed de novo, with all
factual allegations in a complaint accepted as true and all reasonable inferences
drawn in favor of the plaintiff. City of New York v. Chevron Corp., 993 F.3d 81,
89 (2d Cir. 2021).
6
1. Legal Framework
Under Connecticut law, “[s]ervice performed by an individual shall be
deemed to be employment” 1 and therefore subject to provisions of Connecticut law
governing the employer-employee relationship “unless and until it is shown” that
(I) such individual has been and will continue to be free from control
and direction in connection with the performance of such service, both
under his contract for the performance of service and in fact; and (II)
such service is performed either outside the usual course of the
business for which the service is performed or is performed outside of
all the places of business of the enterprise for which the service is
performed; and (III) such individual is customarily engaged in an
independently established trade, occupation, profession or business of
the same nature as that involved in the service performed.
Conn. Gen. Stat. § 31-222(a)(1)(B)(ii). This provision is commonly called the
“ABC test,” and “unless the party claiming the exception to the rule that service is
employment shows that all three prongs of the [ABC] test have been met, an
employment relationship will be found.” Sw. Appraisal Grp., LLC v. Adm’r,
Unemployment Comp. Act, 155 A.3d 738, 745 (Conn. 2017) (citation omitted).
When an economic relationship qualifies as employment under the ABC
test, Connecticut law subjects an employer to a number of regulations. Two of
1
Connecticut law also creates several exceptions to this general principle, under which certain
categories of services do not qualify as “employment.” See, e.g., Conn. Gen. Stat. § 31-
222(a)(1)(E) (excluding, inter alia, services performed by prisoners, elected officials, and
ministers from the statutory definition of employment). None of the exceptions, however,
applies to the services provided by the Appellants and the class members.
7
these regulations are relevant to the Appellants’ claims. Under the Connecticut
Minimum Wage Act,
[n]o employer may withhold or divert any portion of an employee’s
wages unless (1) the employer is required or empowered to do so by
state or federal law, or (2) the employer has written authorization from
the employee for deductions on a form approved by the
commissioner, or (3) the deductions are authorized by the employee,
in writing, for [certain health care expenses], or (4) the deductions are
for contributions attributable to automatic enrollment [in certain
retirement plans organized under state or federal law], or (5) the
employer is required under the law of another state to withhold
income tax of such other state. . . .
Conn. Gen. Stat. § 31-71e. For the purpose of the Connecticut Minimum Wage
Act, “wages” are defined as “compensation for labor or services rendered by an
employee, whether the amount is determined on a time, task, piece, commission or
other basis of calculation.” Conn. Gen. Stat. § 31-71a(3). As interpreted by the
Connecticut Supreme Court, this provision “provide[s] remedial protections for
those cases in which the employer-employee wage agreement is violated.” Mytych
v. May Dep’t Stores Co., 793 A.2d 1068, 1072 (Conn. 2002). It “does not purport
to define the wages due; it merely requires that those wages agreed to will not be
withheld for any reason.” Id.Connecticut also maintains an anti-kickback law, which prohibits employers
from “demand[ing], request[ing], receiv[ing] or exact[ing] any refund of wages . . .
or deduct[ing] any part of the wages agreed to be paid, upon the representation or
the understanding that such . . . fee . . . is necessary to secure employment or
8
continue in employment” and “requir[ing], request[ing] or demand[ing] that any
person agree to make payment of any refund of wages . . . in order to obtain
employment or continue in employment.” Conn. Gen. Stat. § 31-73(b). The term
“refund of wages” is defined as “[t]he return by an employee to his employer . . .
any sum of money actually paid or owed to the employee in return for services
performed” or “payment by the employer or his agent to an employee of wages at a
rate less than that agreed to by the employee.” Conn. Gen. Stat. § 31-73(a).
Connecticut law also permits franchise agreements and sets forth a statutory
framework that governs the franchisor-franchisee relationship. Under the
Connecticut Franchise Act, a “franchise” is
an . . . arrangement in which (1) a franchisee is granted the right to
engage in the business of offering, selling or distributing goods or
services under a marketing plan or system prescribed in substantial
part by a franchisor . . . and (2) the operation of the franchisee’s
business pursuant to such plan or system is substantially associated
with the franchisor’s trademark, service mark, trade name, logotype,
advertising or other commercial symbol designating the franchisor or
its affiliate . . . .
Conn. Gen. Stat. § 42-133e.
If a franchise relationship exists under this statute, the franchisor is subject
to certain obligations with respect to its franchisees. For instance, a franchisor
must provide written notice to a franchisee before terminating or declining to
renew the franchise relationship, Conn. Gen. Stat. § 42-133f(a), and a franchise
must be awarded for a term of at least three years, Conn. Gen. Stat § 42-133f(d). A
9
franchisee has a private right of action to enforce the protections provided by the
Connecticut Franchise Act. Conn. Gen. Stat. § 42-133g. But Connecticut law
leaves the terms and conditions of the franchise fee to be decided by the parties to
the franchise agreement: for instance, it does not cap franchise fees at a certain
percentage of revenue.
Under Connecticut law, the ABC test for employee status and the
Connecticut Franchise Act’s test for franchisee status are independent of each
other. Indeed, the Connecticut Appellate Court has held that an individual can be
an employee under the ABC test if an application of the ABC test would deem that
individual an employee, even if that same individual is also a franchisee. See
Jason Roberts, Inc. v. Administrator, 15 A.3d 1145, 1150 (Conn. App. Ct. 2011).
If an individual qualifies as both a franchisee and an employee, she would be
entitled to the protections of both the Connecticut Franchise Act and the
employment-related provisions of Connecticut law.
2. Connecticut Minimum Wage Act Claim
In the Amended Complaint, the Appellants alleged that Jani-King violated
the Connecticut Minimum Wage Act by deducting fees from their compensation
and that those fees did not fall into any of the categories of permissible wage
10
deductions enumerated in the Act. 2 Two well-established principles of
Connecticut law bear on the Appellants’ Connecticut Minimum Wage Act claim.
First, under § 31-71e of the Connecticut Minimum Wage Act, “the employer-
employee agreement, as opposed to a statutory formula, control[s] the manner in
which wages are calculated.” Mytych, 793 A.2d at 1072. The Act “does not
purport to define the wages due; it merely requires that those wages agreed to will
not be withheld for any reason.” Id. This is because the “purpose of the statute[] .
. . is to protect the sanctity of the wages earned by an employee pursuant to the
agreement she or he has made with her or his employer,” rather than “dictat[ing]
the means by which those wages are calculated.” Id. at 1073. Second, “there is a
strong public policy in Connecticut favoring freedom of contract.” Geysen v.
Securitas Sec. Servs. USA, Inc., 142 A.3d 227, 234 (Conn. 2016) (citation omitted).
Therefore, “contracts voluntarily and fairly made should be held valid and
enforced in the courts.” Id. (citation omitted). This principle dictates that while
courts may decline to enforce contracts in certain circumstances, such as when the
2
In its opinion on Jani-King’s motion to dismiss, the district court held that the Appellants had
plausibly alleged they were Jani-King employees under Connecticut’s ABC test, Mujo v. Jani-
King Int’l, Inc., 307 F. Supp. 3d 38, 48 (D. Conn. 2018), and on summary judgment, the district
court found that there was a genuine dispute of material fact as to the Appellants’ status as
employees, Mujo v. Jani-King Int’l, Inc., 431 F. Supp. 3d 18, 40 (D.Conn. 2019). On appeal,
Jani-King argues that the undisputed evidence established that the Appellants were not
employees under the ABC test, and that the district court erred in holding otherwise. We need
not address the district court’s reasoning regarding the Appellants’ employee status because even
assuming that the Appellants are employees under the ABC test, we conclude that the district
court properly held that the Appellants failed to state a claim under the Connecticut Minimum
Wage Act.
11
contract is in “violat[ion] of public policy,” courts should not refrain from
enforcing a contract simply because it reflects “bargains unwisely made.” Id.The district court correctly applied the principles set forth by the
Connecticut Supreme Court in Geysen and Mytych in concluding that the
Appellants failed to state a claim under the Connecticut Minimum Wage Act. It
noted that the Jani-King franchise agreement expressly provides for the deductions
challenged by the Appellants and defines franchisees’ compensation as the funds
remaining after the deductions are taken. As a result, the district court noted, the
gross customer revenue received by Jani-King is not the baseline “wage” from
which the Connecticut Minimum Wage Act prohibits deductions. Rather, even
assuming that the Appellants are employees who receive wages subject to the
Connecticut Minimum Wage Act, their wages under the franchise agreement are
the funds that remain after Jani-King deducts its fees under the franchise
agreement. “Connecticut law and the public policy of freedom of contract”
therefore require enforcement of the parties’ agreement. Geysen, 142 A.3d at 236.
The Appellants argue that the district court erred in dismissing their
Connecticut Minimum Wage Act claim because their agreements with Jani-King
misclassified them as independent contractors. As a result, the Appellants contend,
the agreements could not comply with the preconditions for wage deductions set
forth in § 31-71e, because the funds did not go to one of the enumerated uses set
12
forth in § 31-71e and Jani-King did not and could not have sought the written
authorization from the Appellants necessary to withhold funds for a purpose not
enumerated in § 31-71e. 3 But even if the Appellants should have been classified as
employees under Connecticut law, Mytych forecloses the Appellants’ § 31-71e
claim. The Mytych plaintiffs, who were employed as sales representatives at retail
stores in Connecticut, alleged that their employment agreements violated the
Connecticut Minimum Wage Act, Conn. Gen. Stat. § 31-71e, because the
agreements allowed their employer to deduct certain fees from sales commissions
owed to the plaintiffs under their employment agreements. 793 A.2d at 1071. The
Connecticut Supreme Court rejected this argument, holding that § 31-71e provided
only a remedy for deductions from wages made in violation of the employment
agreement and did not prohibit employment agreements that excluded from wages
certain revenue attributable to the employee’s efforts. Id. at 1074-75.
Mytych controls the outcome of this case. The holding of Mytych applies
consistently to both employees and contractors: indeed, in Mytych, the plaintiffs
were indisputably employees of the defendants, and the Connecticut Supreme
Court held that an employment contract that excluded from their wages a certain
portion of the revenue attributable to their work did not violate § 31-71e. Under
3
Jani-King also contends that the franchise agreement itself served as the requisite written
authorization under § 31-71e. We need not address that issue because we conclude that § 31-71e
does not apply to the deducted funds.
13
Mytych, then, Jani-King did not run afoul of § 31-71e with respect to the disputed
funds even if the Appellants were employees. The Appellants have therefore failed
to state a claim even if it were assumed that Jani-King misclassified the
Appellants.
The Appellants also note that, while the Connecticut Supreme Court’s
decision in Geysen reflects a general principle that bargained-for employment
contracts are enforced, it does not set forth a general rule requiring enforcement of
employment contracts in all circumstances. Instead, Geysen affirms that
provisions of employment contracts that violate public policy are void. Appellants
argue that the provision of the franchise agreement that allows Jani-King to deduct
franchise fees from the gross revenue received from the work of each franchisee is
void as against public policy because § 31-71e of the Act does not authorize the
deductions. 4
4
Appellants’ theory implies that, in any franchise relationship in which the franchisor is
responsible for collecting customer revenue before conveying it to the franchisee, the
Connecticut Minimum Wage Act would preclude the franchisor from collecting nearly any
franchise fee that does not fall into one of the permitted categories of wage deduction
enumerated in the Act. This reading of the Connecticut Minimum Wage Act would de facto
prohibit certain types of franchised businesses in Connecticut by rendering franchises
economically non-viable. Given that Connecticut has enacted a comprehensive regulatory
scheme for franchising that does not prohibit Jani-King’s business model of deducting franchise
fees from customer revenue before remitting payment to franchisees, it is implausible to read the
Connecticut Minimum Wage Act as prohibiting Jani-King’s implementation of the franchise
business model. A legislature “does not . . . hide elephants in mouseholes.” Whitman v.
American Trucking Associations, 531 U.S. 457, 468 (2001).
14
It is true that, in Geysen, the Connecticut Supreme Court noted that
provisions of employment contracts that “act[] to negate the wage statutes . . .
violate[] public policy.” 142 A.3d at 234. But the wage statutes apply only to
wages, and Connecticut law “expressly leaves the determination of the wage to the
employer-employee agreement.” Mytych, 793 A.2d at 1074. Even assuming that
the franchisees are employees who receive wages, the deducted fees are not wages
under the statute. As noted above, § 31-71e is “not substantive” and “does not
purport to define the wages due.” Id. at 1072. Connecticut law allowed the
franchisees and Jani-King to agree on a formula for calculation of compensation
that excludes a portion of the gross franchise revenue from the franchisees’
compensation. 5 Id. at 1075-76. Because the wage statutes do not apply to the
portion of gross franchise revenue that the parties agreed is not part of the
franchisees’ compensation, the contract does not violate § 31-71e, and by
extension does not violate public policy. We therefore lack the power to void the
agreement and “to make a new and different agreement” between Jani-King and
the franchisees. Geysen, 142 A.3d. at 234 (citation omitted).
5
The Appellants do not assert that they were not paid the minimum hourly wage as defined by
federal or Connecticut law.
15
3. Unjust Enrichment Claim
In their complaint, the Appellants alleged that Jani-King had been unjustly
enriched because the fees it collected from them were illegal fees levied in
exchange for employment in violation of the Connecticut anti-kickback statute,
Conn. Gen. Stat. § 31-73(b). 6 Under Connecticut law, a plaintiff seeking to
recover for unjust enrichment “must prove (1) that the defendants were benefited,
(2) that the defendants unjustly did not pay the plaintiffs for the benefits, and (3)
that the failure of payment was to the plaintiffs’ detriment.” Vertex, Inc. v. City of
Waterbury, 898 A.2d 178, 190 (Conn. 2006) (citation omitted). It is a “broad and
flexible remedy,” id., and while the Connecticut Supreme Court has set out the
aforementioned framework for assessing unjust enrichment claims, the ultimate
question for courts in assessing unjust enrichment claims is whether, under a given
set of circumstances, the “party liable, to the detriment of someone else, obtain[ed]
something of value to which the party liable was not entitled?” Town of New
Hartford v. Conn. Res. Recovery Auth., 970 A.2d 592, 609 (Conn. 2009) (citation
omitted). The district court correctly applied these principles, as well as those set
6
Section 31-73(b) is a criminal statute that does not provide for a private right of action. In its
ruling on Jani-King’s motion to dismiss, the district court assumed that § 31-73(b) could
nonetheless give rise to an unjust enrichment claim to the extent that an employer improperly
exacts money from an employee in violation of the provision. We assume without deciding that
§ 31-73(b) may serve as a basis for an unjust enrichment claim, because even if it can, the district
court correctly concluded that the unjust enrichment claim fails on its merits.
16
forth by the Connecticut Supreme Court in Mytych and Geysen, in granting Jani-
King’s motion for summary judgment.
As the district court explained, the gravamen of the Appellants’ unjust
enrichment claim is that Jani-King obtained something of value from the
Appellants: their franchise fees. Jani-King allegedly received these valuable
franchise fees in exchange for something of no value, a purported franchise right
that is in fact an employment relationship contingent on payments that violate §
31-73(b). At least three principles of well-established Connecticut law preclude
this unjust enrichment theory. First, as the district court noted, bona fide franchise
agreements -- under which the franchisee receives the benefit of the franchisor’s
intellectual property and support services in exchange for franchise fees -- are
expressly authorized by Connecticut law. See Conn. Gen. Stat § 42-133e. Second,
Connecticut courts have held that, even if an individual qualifies as an employee
under the ABC test, she may also be a franchisee. See Jason Roberts, 15 A.3d at
1150. An employee may therefore validly enter into a franchise agreement, pay
franchise fees, and serve as a franchisee. As Geysen teaches, the “strong public
policy in Connecticut” favors enforcement of a freely entered contract. 142 A.3d
at 234. And as Mytych teaches, § 31-73 itself suggests that it is the contract, and
not a statutory formula, that controls the manner in which wages are calculated.
793 A.2d at 1075-76. This is because while § 31-73(b) prohibits employers from
17
seeking a “refund of wages,” § 31-73(a) defines “refund of wages” as “[t]he return
by an employee to his employer . . . of any sum of money actually paid or owed to
the employee in return for services performed,” and “the sum of money . . . owed
to the employee” is defined by the employment contract. Finally, an employee-
franchisee may enter into a compensation agreement that defines her compensation
as the portion of the gross revenue attributable to the employee-franchisee’s work
after franchise fees are subtracted. As we have explained in this Opinion, a
compensation agreement with that structure does not violate the Connecticut
Minimum Wage Act and is not void as against public policy.
As the district court noted, Appellants’ unjust enrichment claim cannot
survive a motion for summary judgment if they cannot muster some evidence that
the Jani-King franchise agreement was not a bona fide franchise agreement, under
which they received valuable services in exchange for their franchise fees. In
order to survive Jani-King’s motion for summary judgment, the Appellants were
required to provide to the district court “hard evidence . . . from which a reasonable
inference in [their] favor may be drawn,” Hayes v. Dahlke, 976 F.3d 259, 267 (2d
Cir. 2020) (citation omitted), that they did not receive valuable franchise rights in
exchange for their franchise fees. The district court concluded that the Appellants
had not provided the requisite “hard evidence,” and we agree.
18
The Jani-King franchise agreement provided the Appellants with an
alienable right to use Jani-King’s intellectual property and systems in the course of
operating a commercial cleaning business, and the Appellants mustered no
evidence that these rights were illusory or lacked value. Accordingly, the district
court properly granted summary judgment to Jani-King on the Appellants’ unjust
enrichment claim.
4. Motion for Certification
Finally, Appellants -- supported by our dissenting colleague -- move for an
order certifying three questions of law to the Connecticut Supreme Court. 7 “Under
the rules of this Court and Connecticut law, we may certify a question to the
Connecticut Supreme Court ‘if the answer may be determinative of an issue’
pending in a case before us ‘and if there is no controlling appellate decision,
7
The proposed questions are:
1. Where workers are misclassified as independent contractors pursuant to the “ABC”
test set forth in Conn. Gen. Stat. § 31-222, is it a violation of Connecticut law to require
the workers to make payments they could not have been required to make if they had
been properly classified as employees, such as payments for their own workers’
compensation insurance or payments in order to obtain a job?
2. Where misclassified workers are actually employees of a franchisor, do “franchise
fees” they must pay in order to obtain janitorial work qualify [as] unlawful payments for
a job under Conn. Gen. Stat. § 31-73(b)?
3. Is a contract purporting to authorize deductions from a worker’s pay binding and
enforceable where the same contract purporting to authorize the deductions also
misclassifies the worker as an independent contractor such that the worker may not
realize the deductions would be unlawful deductions from wages under Conn. Gen. Stat.
§ 31-71(e)?
Plaintiff-Appellants’ Mot. to Certify Questions of Law to the Conn. Sup. Ct. 1.
19
constitutional provision or statute.’” Valls v. Allstate Ins. Co., 919 F.3d 739, 742
(2d Cir. 2019) (quoting Conn. Gen. Stat. § 51-199b). “Whether we ask a state
court to resolve unsettled legal questions will depend on, among other factors: ‘(1)
the absence of authoritative state court decisions; (2) the importance of the issue to
the state, and (3) the capacity of certification to resolve the litigation.’” Runner v.
N.Y. Stock Exch., Inc., 568 F.3d 383, 388 (2d Cir. 2009). “[W]e do not certify a
question of unsettled state law merely because state law permits it.” Id. Rather,
“[w]e resort to certification sparingly, mindful that it is our job to predict how the
[Connecticut Supreme Court] would decide the issues before us.” Highland
Capital Mgmt., LP v. Schneider, 460 F.3d 308, 316 (2d Cir. 2006) (citation
omitted).
The Appellants’ proposed questions do not warrant certification under these
principles. First, the proposed questions have already been answered by the
“authoritative state court decisions” of Mytych and Geysen. Runner, 568 F.3d at
388. These cases stand for the uncontroversial proposition that an employee and
employer may enter into an employment contract that defines the employee’s
wages as some sum of money less than the gross revenue received by her employer
as a result of her labor. Indeed, this is how most employee compensation
agreements are structured in practice and, in fact, must be structured in practice.
Every business has numerous expenses other than employee compensation, and it
20
must be able to pay those expenses to remain a going concern. It is implausible
that, as a matter of Connecticut state law, an employer is required to pay an
employee every penny of revenue attributable to the employee’s efforts.
The franchise agreement is in line with these common-sense principles at the
root of Mytych and Geysen. Appellants provide services to Jani-King’s customers;
Jani-King’s customers pay Jani-King; and Jani-King, in accordance with the
bargained-for franchise agreement, uses some of that customer revenue to pay
defined business expenses and some of that customer revenue to compensate the
Appellants for their labor. This is not a novel arrangement: it is how all businesses
operate. And, most importantly, the Connecticut Supreme Court has affirmed in
Mytych and Geysen that this ubiquitous arrangement does not violate the
Connecticut employment statutes at issue in this case. We therefore can
confidently “predict how the [Connecticut Supreme Court] would decide the issues
before us,” Schneider, 460 F.3d at 316, obviating the need for certification.
In response to this reasoning, the dissent claims that a threshold question is
whether under Connecticut law the Appellants are properly understood as
employees, franchisees, or a hybrid of the two, and contends that we err in failing
to certify to the Connecticut Supreme Court to address that issue. Not so: that
question is irrelevant to the outcome of this case, because the Appellants cannot
succeed on their claims under any of these three scenarios. Even if the Appellants
21
are properly understood as employees under Connecticut law, their claims are
foreclosed by Mytych. 8 If Connecticut law defines the Appellants as franchisees
and not employees, they are entitled only to the protections of the Connecticut
Franchise Act, and not to the provisions of Connecticut employment law under
which they bring suit. And if the defendants are both employees and franchisees,
they can conceivably have only the protections of the Connecticut employment
laws, as interpreted in Mytych, and of the Connecticut Franchise Act. There is no
reason to believe that Connecticut law could entitle employee-franchisees, by
virtue of their dual status, to some legal right beyond those provided to either
employees or franchisees. Under any of those three frameworks, then, the
defendants prevail.
For this reason, the dissent’s reliance on a recent certification decision of the
First Circuit is misplaced. In Patel v. 7-Eleven, Inc, No. 20-1999, 2021 WL
3486175 (1st Cir. Aug. 9, 2021), the plaintiff franchisees brought a suit under
Massachusetts’ employment statutes against the defendant franchisor, and the
8
The dissent also notes that there is no Connecticut authority affirmatively holding that the ABC
test applies to determine whether an individual is an employee for the purposes of the anti-
kickback statute and contends that certification is necessary to allow the Connecticut Supreme
Court to make that determination in the first instance. But this issue is irrelevant to the outcome
here. If the Appellants are employees as defined in the anti-kickback statute -- regardless of
whether the statute incorporates the ABC test or some other test for employee status -- Mytych
still forecloses their claims. And if the Appellants are not employees under the anti-kickback
statute, then they cannot invoke its provisions at all, because the anti-kickback statute prohibits
only the exaction of kickbacks from “employees” in exchange for “employment.” Conn. Gen.
Stat. § 31-73.
22
defendant franchisor claimed that it could not comply with both certain provisions
of Massachusetts employment law and a Federal Trade Commission regulation
governing franchising. On appeal, the First Circuit certified to the Massachusetts
Supreme Judicial Court a question of whether a certain provision of Massachusetts
employment law should be construed to cover franchisor-franchisee relationships
governed by that federal regulation. But here, the outcome-determinative issue is
not whether the Connecticut employment statutes apply to the relationship between
the Appellants and Jani-King: it is whether those statutes prohibit the method
provided under the franchise agreement for calculating the Appellants’
compensation. For the reasons we have discussed, the Connecticut Supreme Court
in Mytych authoritatively determined that they do not.
Further, certification would not “resolve the litigation,” Runner, 568 F.3d at
388, because the Appellants’ proposed questions for certification all presuppose
that Appellants were in fact employees of Jani-King, an issue not yet decided in
this litigation. Favorable answers for the Appellants on the proposed questions
from the Connecticut Supreme Court would therefore not dispose of this case
because further fact-finding through litigation would be required to determine the
Appellants’ employment status. See Compassionate Care, Inc. v. Travelers Indem.
Co., 83 A.3d 647, 654 (Conn. App. Ct. 2013) (“The determination of the status of
an individual as an independent contractor or an employee . . . is a question of
23
fact.”). And, most significantly, even if further litigation established that the
Appellants were employees, Jani-King would still prevail: in Mytych, the
Connecticut Supreme Court held that a similar compensation scheme did not
violate Connecticut law even where there was no dispute that the plaintiffs were
employees of the defendant. For these reasons, we deny Appellants’ motion to
certify the proposed questions of law to the Connecticut Supreme Court.
CONCLUSION
For the foregoing reasons, the judgment of the district court is AFFIRMED.
24
1 GUIDO CALABRESI, Circuit Judge, dissenting:
2 Simon Mujo and Indrit Muharremi worked for Jani-King as cleaners. They
3 paid tens of thousands of dollars to Jani-King in initial fees to obtain work: Mr.
4 Mujo paid $44,175, and Mr. Muharremi paid $16,250. By the terms of the labor
5 contracts they signed, which are styled as franchise agreements, the size of the
6 initial fee determines how much work the cleaner will receive. Once work began,
7 Jani-King deducted much of their monthly income for a variety of post-work
8 fees, including “finder’s fees,” insurance payments, supply costs, and “charge-
9 backs.” According to their Amended Complaint, for example, Mr. Muharremi
10 earned $4,508.72 for the month of September 2016. After royalty fees, accounting
11 fees, technology fees, a “finder’s fee,” an advertising fee, a lease fee, franchise
12 supply costs, and over $1,000 in “charge-backs,” his gross income for the month
13 was reduced to $1,746.80. In July of 2015, Mr. Mujo’s earnings of $ 1,403.83
14 similarly were reduced to a gross income of $310.45. Jani-King argues that these
15 are all permissible fees pursuant to a legitimate franchise agreement.
16 Appellants compare the system to indentured servitude. They pay so
17 much money up front, and have so much of their wages deducted for fees, that
18 they are obliged to keep working simply to earn back the money they paid to get
1
1 the jobs in the first place. They claim that they are employees whom Jani-King
2 intentionally misclassified as independent contractors in order to evade
3 Connecticut labor laws. Specifically, they argue that the initial fees violate
4 Connecticut’s anti-kickback statute, Conn. Gen. Stat. § 31-73(b), and that the post-
5 work fees violate the state’s minimum wage law, Conn. Gen. Stat. § 31-71e.
6 We cannot resolve this dispute without knowing whether appellants in
7 fact properly qualify as independent contractors, franchisees, employees, or as a
8 “dual status” combination of employees and franchisees at the same time. In
9 other words, we first need to know how Connecticut classifies workers in the
10 employment statutes under which appellants bring their claims. But when we
11 read the relevant pages of the Connecticut General Statutes and the Connecticut
12 Reports, no answers appear. The Connecticut Supreme Court has not addressed
13 these questions, and cases in the lower Connecticut courts give virtually no
14 indication as to whether workers can be both franchisees and employees at the
15 same time. Moreover, and as important, Connecticut cases are silent as to how
16 the state franchise law should be harmonized with more general state
17 employment regulations. And without this knowledge we cannot know the
18 appropriate result in this case regardless of whether appellants are employees,
2
1 franchisees, or both. For these reasons, I believe that in this case certification to
2 the Connecticut Supreme Court is absolutely necessary.
3 The majority today holds that appellant workers are both employees and
4 franchisees. It further holds that, as franchisees, they can be made to make
5 payment such as franchise and finder’s fees without violating Connecticut labor
6 laws. But such holdings rest on unwarranted readings of Connecticut law. As a
7 federal court we are empowered to evaluate questions of state law, provided that
8 we do so with fidelity to states’ interpretations of their own laws. Where state
9 law is unclear, however, our normal course must be to ask the state courts for
10 guidance on the matter. That conversation is the essence of judicial federalism. In
11 this case, appellants asked the district court to seek such guidance, which it
12 declined to do. Our court has now made the same mistake. I would certify the
13 relevant determinative Connecticut law questions to the Connecticut Supreme
14 Court, and respectfully dissent from our failure to do so.
15 I.
16 The court’s mistake can be seen first by considering appellants’ unjust
17 enrichment claim. Connecticut’s anti-kickback statute states in relevant part:
18 No employer . . . shall, directly or indirectly, demand, request,
19 receive or exact any refund of wages, fee, sum of money or
3
1 contribution from any person, or deduct any part of the wages
2 agreed to be paid, upon the representation or the understanding that
3 such refund of wages, fee, sum of money, contribution or deduction
4 is necessary to secure employment or continue in employment. No
5 such person shall require, request or demand that any person agree
6 to make payment of any refund of wages, fee, contribution or
7 deduction from wages in order to obtain employment or continue in
8 employment.
9
10 Conn. Gen. Stat § 31-73(b).
11 In other words, the statute “prohibits an employer from demanding any
12 sum of money from an individual as a requirement of employment or as a
13 requirement for continued employment.” Lockwood v. Pro. Wheelchair Transp., Inc.,
14 654 A.2d 1252, 1257 (Conn. App. Ct. 1995). At the motion to dismiss stage, the
15 district court noted that “[p]laintiffs conceivably could prove that the parties’
16 underlying agreement was an employment agreement that conditioned initial or
17 continued employment on payment of a down payment or any number of other
18 fees and is therefore void as a matter of law.” SA 21. During discovery,
19 appellants produced the relevant contracts and pointed to several provisions
20 which would violate the anti-kickback statute, provided that appellants could
21 properly be understood to be employees. They showed that they paid large up-
22 front fees in order to receive work assignments from Jani-King in the first place.
4
1 The size of the initial fee was linked to the amount of work Jani-King assigned. 1
2 They were also required to pay “finder’s fees” for additional clients referred by
3 Jani-King according to a pay schedule that Jani-King could change at any time.
4 As Jani-King described in its brief, these fees were paid in exchange for
5 “additional account referrals.”
6 Was this arrangement an unlawful kickback in violation of Conn. Gen.
7 Stat. § 31-73(b)? The question cannot be resolved without knowing whether
8 appellants are properly understood as employees or franchisees, or some
9 combination of the two. And if they are some hybrid of both statuses, which is
10 controlling under Connecticut law? As Judge Menashi stated at oral argument,
11 Oral Argument at 35:00, it is perfectly legal, and indeed routine, for independent
12 contractors who enter franchise agreements to pay for the right to operate that
13 franchise. By contrast, employers are prohibited from charging employees for a
14 job under Conn. Gen. Stat. § 31-73(b). The district court wrote that appellants
15 “provided no basis for distinguishing their claims for relief from legitimate fees
16 within the franchise agreement.” SA 38. But whether they have done so or not
17 depends on whether they can be both employees and franchisees, and the
1This arrangement, where size of fee was correlated to amount of work, suggests that the money was
paid in exchange for getting work, not for a standard set of franchise benefits.
5
1 consequences of such “dual status.” And these questions, as previously stated,
2 are unresolved by Connecticut law.
3 Both the district court and the majority seek to avoid the problem by using
4 Connecticut’s so-called “ABC test” to categorize appellants for purposes of the
5 anti-kickback statute. And Connecticut law does indeed apply this test in other
6 contexts. The ABC test is set forth in Connecticut’s Unemployment
7 Compensation Act, Conn. Gen. Stat. § 31-222(a)(1)(B)(ii), to determine whether
8 workers are properly classified as employees or independent contractors for the
9 purposes of that act, and, by its terms, for that act only. In 1995, the Connecticut
10 Supreme Court held that the ABC test was also applicable to claims brought
11 under the Connecticut Minimum Wage Act. Tianti ex rel. Gluck v. William Raveis
12 Real Estate, Inc., 651 A.2d 1286, 1290 (Conn. 1995). The Court acknowledged this
13 express application of this test to minimum wage law again in Standard Oil of
14 Conn., Inc. v. Adm'r, Unemployment Comp. Act., 134 A.3d 581, 594 (Conn. 2016)
15 (describing Tianti’s holding as: “[T]he ABC test was applicable in determining
16 the existence of an employment relationship between the salespersons and the
17 defendant” for the purposes of § 31-72).
6
1 But the courts of Connecticut have never held that the ABC test applies to
2 define who is covered by the anti-kickback statute. And notwithstanding its
3 holdings for minimum wage law, Connecticut law does not tell us whether
4 appellants are employees, franchisees, or both, for purposes of that statute.
5 Very recently, the U.S. Court of Appeals for the First Circuit certified
6 precisely this question—whether the ABC test should make this leap to the
7 franchise context—to the Massachusetts Supreme Judicial Court in a case called
8 Patel v. 7-Eleven, Inc., No. 20-1999, 2021 WL 3486175 (1st Cir. Aug. 9, 2021). There,
9 our sibling circuit humbly acknowledged its own ignorance, an ignorance we
10 share, as to whether the ABC test applies to the relationship between a franchisor
11 and a franchisee. Id. at *2. 2 Just like that case, the “outcome of this appeal hinges
12 on a question of [Connecticut] law, upon which the [Connecticut] courts have not
13 spoken.” Id. at *1. This degree of uncertainty alone should be enough to certify.
14 Having applied the ABC test to issues that are not clearly governed by that
15 test, and, under that test, having found that appellants are employees, the district
16 court held that appellants could be both employees and franchisees. It then
2 Because Massachusetts does not have its own franchise law, instead relying on federal law, that case
concerns harmonizing Massachusetts labor law with the FTC’s franchise regulations, rather than state
franchise laws.
7
1 found their claims to be invalid because appellants—being franchisees—were
2 governed exclusively by the Franchise Act, Conn. Gen. Stat. § 42-133e(b). Thus,
3 the district court presumed appellants’ franchisee status predominated over their
4 employee status. But no such presumption is warranted. Even if the court were
5 correct in its guess that under Connecticut law workers can be both franchisees
6 and employees, the district court could not know what Connecticut labor law
7 standards apply to such “dual” workers.
8 II.
9 The answer to that question determines how we view both the pre-work
10 payments and post-work deductions at issue in this case. If the workers are
11 simply franchisees, then both are likely acceptable. The pre-work payments may
12 be standard fees paid by franchisees to a franchisor for the privilege of operating
13 a legitimate franchise. And the post-work deductions may be allowable pursuant
14 to a valid contract. If, instead, the workers are employees then any such
15 payments were made in exchange for employment and are prohibited by the
16 Connecticut anti-kickback statute. See Conn. Gen. Stat. § 31-71e. And, similarly,
17 post-work deductions may well be illegal reductions from earned wages. See
18 Conn. Gen. Stat. § 31-73(b).
8
1 The majority attempts to circumvent the problem by claiming that the
2 questions before us have already been answered. It does so in its discussion of
3 the minimum wage claim by mischaracterizing the holding of the Appellate
4 Court of Connecticut in Jason Roberts, Inc. v. Adm’r, 15 A.3d 1145 (Conn. App. Ct.
5 2011), and by overreading the decision of the Supreme Court of Connecticut in
6 Mytych v. May Dep’t Stores Co., 793 A.2d 1068 (Conn. 2002).
7 In Jason Roberts, a worker claimed to be a misclassified employee of a
8 cement company, and he sought unemployment benefits under Conn. Gen. Stat.
9 § 31-222. The putative employer pointed to a franchise agreement between the
10 parties and argued that the agreement rendered § 31-222 inapplicable. Jason
11 Roberts, 15 A.3d at 1149. The Appellate Court of Connecticut disagreed. It wrote,
12 the employer “neither cites, nor does our research reveal, any legal support for
13 this argument. . . . The act makes no express exemption for franchises, nor can we
14 imply an exemption[.]” Id. at 1149–50. Thus, the case stands for the proposition
15 that the existence of a franchise agreement does not per se render employment
16 law inapplicable.
17 In the majority’s hands, Jason Roberts transforms into a virtually opposite
18 holding. It becomes an affirmation that “an individual can be an employee under
9
1 the ABC test . . . even if that same individual is also a franchisee.” Maj. at 10. The
2 majority then goes on to assert, without citation, that “[i]f an individual qualifies
3 as both a franchisee and an employee, she would be entitled to the protections of
4 both the Connecticut Franchise Act and the employment-related provisions of
5 Connecticut law.” Id. The majority then concludes—again without citation—that
6 the freedom of contract implied in the Franchise Act trumps the limitations on
7 that freedom mapped by Connecticut’s employment laws. But in fact, Jason
8 Roberts says nothing about whether a worker can be both a franchisee and an
9 employee under the minimum wage act or the anti-kickback statute. And, more
10 important, it nowhere suggests how to harmonize these laws if a worker can be
11 both.
12 Indeed, if anything, Jason Roberts directly supports appellants’ position.
13 Although the court “appreciate[d] that franchises are business arrangements that
14 can differ in many ways from a traditional employment relationship,” it was
15 bound to “construe and apply the [unemployment] statute as [it found] it.” Jason
16 Roberts, 15 A.3d at 1150 (internal quotations omitted). Put simply, the case
17 suggests that once a worker qualifies as an employee, Connecticut employment
18 law applies, regardless of whether they signed a contract marked “Franchise
10
1 Agreement.” Thus, properly understood, Jason Roberts at least leaves us no closer
2 to resolving our key questions.
3 The majority next turns to Mytych v. May Dep't Stores Co., 793 A.2d 10684 (Conn. 2002) for support. Mytych states the uncontroversial proposition that “the
5 employer-employee agreement, as opposed to a statutory formula, control[s] the
6 manner in which wages are calculated.” Mytych, 793 A.2d at 1072. Asserting,
7 correctly, that “there is a strong public policy in Connecticut favoring freedom of
8 contract,” the majority holds that it must therefore adopt the definition of wages
9 in the franchise agreements, even if Mr. Mujo, Mr. Muharremi, and the class of
10 workers they represent entered into the agreements “unwisely.” Maj. at 12
11 (quoting Geysen v. Securitas Sec. Servs. USA, Inc., 142 A.3d 227, 234 (Conn. 2016)).
12 But by this analysis, the majority assumes the answer to the question
13 before it. Employees may be free to determine how their wages are calculated.
14 Yet there is no reason to assume the same is necessarily true as to “franchise
15 agreements” made by workers who are misclassified as franchisees or as some
16 hybrid mixture of franchisees and employees. The proper inquiry as to these
17 workers is not whether the disputed fees are wages, but whether the Franchise
18 Agreements violate public policy in the specific ways that Connecticut courts
11
1 define public policy. Thus, while “it is well established that parties are free to
2 contract for whatever terms on which they may agree . . . it is equally well
3 established that contracts that violate public policy are unenforceable.” Geysen,
4 142 A.3d at 233.
5 And a franchise contract provision might well violate public policy if it
6 “acts to negate the wage statutes,” or “negate[s] laws enacted for the common
7 good,” or is “designed to evade statutory requirements.” Id. at 234. The
8 Amended Complaint includes detailed allegations that the Franchise
9 Agreements fall into precisely the situations contemplated by Geysen. It states
10 that the Agreements misrepresent appellants as franchisees rather than
11 employees, violating public policy by acting to “negate the wage statutes.”
12 Thus, the majority compounds the district court’s errors. First, it repeats
13 that court’s misreading of Jason Roberts as holding that a worker can be both a
14 franchisee and an employee in Connecticut. Maj. at 17. Next, it decides that a
15 Connecticut “employee-franchisee” is free to enter any “compensation
16 agreement that defines her compensation,” however unwise. Id. at 18. But each
17 of these steps requires the majority to spin Connecticut law out of whole cloth.
18 And there is no Connecticut authority explaining a) how to define a worker as an
12
1 employee or franchisee for purposes of the anti-kickback statute, b) whether a
2 worker can be an employee and franchisee at the same time, or c) how employee
3 and franchise law would apply to such a “dual” worker.
4 III.
5 I am especially troubled because these are weighty questions of
6 Connecticut law and policy, which Connecticut should have the opportunity to
7 answer. Data on Connecticut are hard to come by, but what we do know
8 suggests that worker misclassification has long been a serious problem in that
9 state. In addition to violating employment rights of workers, misclassification
10 costs state and local government crucial revenues from payroll, unemployment
11 insurance, and workers’ compensation. According to a 2011 report of the
12 Connecticut Joint Enforcement Commission on Employee Misclassification, in a
13 single year the state Labor Department issued 127 stop work orders for
14 misclassifying workers and collected nearly $40,000 in civil penalties. Joint Enf’t
15 Comm’n on Emp. Misclassification, State of Conn., Annual Report 2 (2011),
16 https://perma.cc/YU9Z-RC26. Additional investigation led to reclassifying 6,500
17 workers and the discovery of $50 million in unreported or underreported
18 payroll. Id. at 3. That year, the state Department of Revenue Services conducted
13
1 its own misclassification investigation and assessed taxes, penalties, and interest
2 totaling more than $600,000. Id. Earlier, an independent report found that 42% of
3 audited employers in Connecticut had misclassified workers. Lalith de Silva, et
4 al., Planmatics, Inc., Prepared for the US Department of Labor Employment and
5 Training Administration, Independent Contractors: Prevalence and Implications
6 for Unemployment Insurance Programs 58 (2000),
7 http://wdr.doleta.gov/owsdrr/00-5/00-5.pdf.
8 Despite the importance of this issue, the lack of Connecticut Supreme
9 Court guidance, and the centrality of unanswered legal questions to the
10 disposition of this case, the majority sees fit to tell Connecticut just how to blend
11 together its franchise laws with its employment laws, applying the ABC test in a
12 new context and creating a brand-new category of worker—the “employee-
13 franchisee”—in the process. It treats appellants as employees for its analysis of
14 their minimum wage claim, and as franchisees for the purposes of the anti-
15 kickback statute claim. It then decides that because there are general statutes on
16 these subjects, and because the Connecticut Supreme Court has affirmed the
17 state’s commitment to freedom of contract, appellants have no viable claims. But
14
1 in fact, all these are important Connecticut legal questions that are not properly
2 ours to decide.
3 Many decisions on whether to certify are matters of judgment: How
4 confident can we be that the highest court of the relevant state would say its law
5 means what we say it does? If we decline to certify because we are overly
6 confident in our capacity to guess, and the state subsequently decides a case the
7 opposite way, we look foolish, and more importantly, we have been unfair to the
8 parties. Moreover, in Connecticut, certification need not be an obstacle to speedy
9 justice; in Connecticut, federal district courts are permitted to certify questions
10 directly to the Connecticut Supreme Court, saving time and money.
11 Certification is fully consistent with the practice of the Supreme Court and
12 our court. When state law is unclear, the Supreme Court has regularly used
13 certification. And, on occasion, rather than certify directly itself, it has remanded
14 to a lower court with instructions for that court to certify a question. See
15 McKesson v. Doe, 141 S. Ct. 48, 51 (2020); Bellotti v. Baird, 428 U.S. 132, 151–52
16 (1976); Lehman Bros. v. Shein, 416 U.S. 386, 391–92 (1974); Clay v. Sun Ins. Off. Ltd,
17 363 U.S. 207, 212 (1960).
15
1 We have gone further. In two relatively recent cases, our court has
2 successfully and usefully certified questions where state law was far clearer than
3 in the case before us or than in the above-mentioned Supreme Court cases. Glob.
4 Reinsurance Corp. of Am. v. Century Indem. Co, 843 F.3d 120, 122 (2d Cir.
5 2016), certified question accepted, 68 N.E.3d 98 (2017), and certified question
6 answered, 91 N.E.3d 1186 (2017); NAF Holdings, LLC v. Li & Fung (Trading) Ltd.,
7 772 F.3d 740 (2d Cir. 2014), certified question answered, 118 A.3d 175 (Del. 2015). In
8 both cases, we did so because there were indications that the state’s highest
9 courts might deviate from their prior holdings. Moreover, in an even more recent
10 decision, Glover v. Bausch & Lomb Inc., we certified because the outcome, as here,
11 “ultimately turn[ed] on questions of state law for which no controlling decisions
12 of the Supreme Court of Connecticut exist.” No. 20-1156-CV, 2021 WL 3042364,
13 at * 4 (2d Cir. July 20, 2021). And we did so even though—unlike the instant
14 case—certification was not requested by any party. We did so nostra sponte
15 because “[w]e have long recognized the appropriateness of according to state
16 courts the opportunity to decide significant issues of state law through the
17 certification process.” Id. (quoting Corsair Special Situations Fund, L.P. v. Pesiri, 863
18 F.3d 176, 183 (2d Cir. 2017)).
16
1 In the absence of controlling decisions of the Supreme Court of
2 Connecticut on the significant issue of worker classification and its consequences,
3 we clearly should certify this case to the Connecticut Supreme Court. I would
4 therefore vacate and remand to the district court with instructions to certify
5 appropriate questions to the Connecticut Supreme Court. Because the majority
6 fails to do this, I respectfully dissent.
17