Actions Speak Louder Than Words! Franchisors Can Be Liable for Sexual Harassment

In Patterson v. Domino’s Pizza, LLC, California’s Second District Court of Appeals declared that “a franchisor’s actions speak louder than words in the franchise agreement.”

Plaintiff, a teenager, was employed by a local Domino’s franchisee, and she claimed she was sexually harassed and assaulted by her supervisor. Plaintiff was terminated and she sued the franchisee, her supervisor and Domino’s Pizza, LLC, the franchisor, for sexual harassment and other related claims under FEHA.

The trial court granted defendants’ motion for summary judgment. Plaintiff appealed.

The franchisee filed bankruptcy. Plaintiff targeted Domino’s – and Domino’s claimed it wasn’t liable because it had a written franchise agreement with the franchisee that said the franchisee is solely responsible for recruiting, hiring, training, scheduling and paying its employees. So there!

The Court wasn’t buying that. It noted that Domino’s Manager’s Reference Guide is replete with other provisions that gives Domino’s control over the franchisee’s employees. Additionally, the franchisee testified that Domino’s’ area leader told the franchisee whom to fire. The franchisee said that when he “signed with Domino’s, … [he] was told, in no uncertain terms, that if [he] did not play ball the way they wanted [him] to play ball, that [his franchise] would be in jeopardy.”

Well don’t that beat all? And now Domino’s wants to disclaim any responsibility! They want to have their cake pizza pie and eat it, too!

The Court applied the “totality of the circumstances” test to this situation and concluded that Domino’s did exercise significant control over the franchisee. At least enough for the issue to go to a jury.

Then there was this issue of sexual harassment — Domino’s argued that one assault does not a sexual harassment case make. This silly argument did not win the day when the Court pointed out that the plaintiff was only 16 years old and she was sexually harassed and assaulted by her supervisor. Once is enough, under those circumstances, for the case to go to a jury.

The lesson here for plaintiff’s attorneys is to carefully review the franchise agreement and other documents pertaining to the everyday operation of the franchise. Courts will ignore language in the franchise agreement if it appears to be a sham, as this one clearly was.

The lesson for supervisors is that you don’t get one free sexual harassment and assault on a minor subordinate.

Patterson v. Domino’s Pizza, LLC et al., 207 Cal.App.4th 385 (2012).

*****UPDATE*****

Here’s employer mega-lawfirm Littler Mendelson’s take on this case: 

Who’s in Charge Here?

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