Previously We Reported: As The Pizza Franchise Turns.

Sixteen-year-old employee of a Domino’s pizza franchise filed a FEHA [Fair Employment and Housing Act, Government Code section 12940] alleging she was sexually harassed at her job by her manager.  The franchise filed for bankruptcy relief and Domino’s Pizza, Inc. filed a motion for summary judgment with evidence that “Domino’s was not [the alleged harasser’s] employer and was not involved in the training, supervision or hiring of any employees” of the franchise, and the franchise is responsible for “supervising and paying the persons who work at the store.” In opposition, the plaintiff attached the deposition of the manager of the franchise which said that Domino’s “area leader” twice ordered him to fire employees of the franchise.  The trial court granted the MSJ.  The appellate court reversed, stating “a franchisor’s actions speak louder than words in the franchise agreement.”  (Patterson v. Domino’s Pizza, LLC (Cal. App. Second Dist., Div. 6; June 27, 2012) 207 Cal.App.4th 385, [143 Cal.Rptr.3d 396].)

The California Supreme Court granted review and reversed the judgment of the Court of Appeal, stating: “We granted review to address the novel question dividing the lower courts in this case: Does a franchisor stand in an employment or agency relationship with the franchisee and its employees for purposes of holding it vicariously liable for workplace injuries allegedly inflicted by one employee of a franchisee while supervising another employee of the franchisee? The answer lies in the inherent nature of the franchise relationship itself. . . . . Plaintiff highlights the franchisee‘s testimony that a representative of the franchisor said the harasser should be fired. But, consistent with the trial court’s ruling below, any inference that this statement represented franchisor ‘control’ over discipline for sexual harassment complaints cannot reasonably be drawn from the evidence. The uncontradicted evidence showed that the franchisee imposed discipline consistent with his own personnel policies, declined to follow the ad hoc advice of the franchisor‘s representative, and neither expected nor sustained any sanction for doing so.” In her dissent, Justice Werdegar stated: “To emphasize contractual language intended to shield a franchisor from employment-related claims over evidence the franchisor in practice retained and exercised the power to terminate the franchisee’s employees tends to undermine FEHA’s goals by permitting the franchisor, in effect, to opt out of the statutory duties of a California employer.”(Patterson v. Domino’s Pizza, LLC (Cal. Sup. Ct.; August 28, 2014) 60 Cal.4th 474, [333 P.3d 723, 177 Cal.Rptr.3d 539].)