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Thursday, August 28, 2014

Patterson v. Domino's Pizza: Franchisor Not Responsible for Acts of Franchisee's Employee

In Patterson v. Domino's Pizza, --- Cal.4th --- (8/28/14), an employee, Patterson, alleged that her supervisor subjected her to sexual harassment. She sued her direct employer, a franchisee of Domino's Pizza, as well as Domino's itself, the franchisor. Patterson alleged that Domino's was liable because it was her joint employer and because the franchisee was its agent. The trial court granted summary judgment for Domino's, the Court of Appeal reversed, and the California Supreme Court reversed the judgment of the Court of Appeal, holding as follows:

Potential liability of a franchisor depends upon whether it has "retained or assumed a general right of control over factors such as hiring, direction, supervision, discipline, discharge, and relevant day-to-day aspects of the workplace behavior of the franchisee‘s employees." Slip op. at 30-31.

Although Domino's "vigorously enforced" standards for general operations, it "lacked the general control of an 'employer' or 'principal' over relevant day-to-day aspects of the employment and workplace behavior" of the franchisee's employees. Slip op. at 33.
According to the testimonial evidence, [the franchisee] exercised sole control over selecting the individuals who worked in his store. He did not include Domino's in the application, interview, or hiring process. Nor did anyone attempt to intervene on Domino's behalf. It was [the franchisee's] decision to hire Patterson as a new employee and to otherwise retain the existing staff when he bought the franchise.
Slip op. at 35-36. The franchisee also controlled its own sexual harassment policies and training. Slip op. at 36. Evidence that Domino's told the franchisee to "get rid of" the alleged harasser did not raise an inference that Domino's was in charge of employment decisions. Slip op. at 38.

The opinion is available here.

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