Nov. 4, 2014
In June 2009, Taylor Patterson, a former employee at a Domino’s Pizza Inc. franchise store, filed a harassment lawsuit against the Domino’s franchisee Sui Juris LLC, assistant store manager Renee Miranda and Domino’s Pizza. Patterson alleged she was forced to resign from her job at a Southern California Domino’s owned by Sui Juris after being sexually harassed by Miranda.
A California state superior court first dismissed the lawsuit against Domino’s, finding that the franchisor was not Patterson’s “employer.” However, an appellate court reversed, holding that Patterson was entitled to a trial on whether Domino’s Pizza was her “employer.”
The California Supreme Court later reversed the appellate court, holding that Domino’s was not sufficiently involved in day-to-day hiring, firing and supervision to warrant liability for Patterson’s claims. “The contract-based operational division that otherwise exists between the franchisor and franchisee would be violated by holding the franchisor accountable for misdeeds committed by employees who are under the direct supervision of the franchisee, and over whom the franchisor has no contractual or operational control.” Patterson v. Domino’s Pizza LLC, Cal., No. S204543, (Aug. 28, 2014).
IMPACT: Franchisors may avoid liability for employee claims by sufficiently separating themselves from the recruiting, hiring, firing, training and scheduling of the franchisee employees.
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