Legal Question in Employment Law in California

If the Corporation is directly paying people the discount as opposed to forcing the massage team to accept a reduction in their rates, it would be legal. But the Corporation can not determine what the price will be unless its contract with you allows them to set the price, which i snot likely. It is similar to McDonald's telling the company that supplies it eggs that the price will be $X per egg; they can ask that that be the price but it is up to the egg supplier to decide what they will charge.

Mr. Shers is basically right, but his McDonald's example is way off and may lead to confusion. The answer to your question is going to be decided by two things, the terms of the contracts and the way the corporation intends to pay for the discount. If the corporation intends to eat the discount and pay the massage therapists the same as without the coupon, then there is nothing illegal about it. If the massage therapists are paid directly by the client and set their own prices, it is awkward, but not illegal, because the therapists have the right to say, "I'm sorry, that coupon doesn't apply to this facility," or "I'm sorry that promotion was issued by mistake," and charge their regular pricing. If it goes that way, I suggest you post a sign about it to minimize problems with customer expectations. If, on the other hand, the corporation controls pricing and how much the therapists get from each transaction, then we would have to look at the contracts to determine if it is illegal or not. And that is where a McDonald's example would be accurate. McDonald's has corporate stores and franchises. McDonald's has some of the most sophisticated franchising in the world, in large part because they want the brand to be seamless between corporate and franchise operations. So their contracts provide that the franchisees must participate in promotions. They have a sophisticated advertising and promotion structure that sorts out how the cost of discounts and other promotions are shared between the company and the franchisees. It sounds like your contracts are just a little less clear. Even so, the compensation provisions of the contracts are where you have to start to see if this is a breach of the contracts or not.