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Supreme Court of California
August 28, 2014, Opinion Filed
[**725] BAXTER, J.—Franchising, especially in the fast-food industry, has become a ubiquitous, lucrative, and thriving business model. This contractual arrangement benefits both parties. The franchisor, which sells the right to use its trademark and comprehensive business plan, can expand its enterprise while avoiding the risk [****1113] and cost of running its own stores. The other party, the franchisee, independently owns, runs, and staffs the retail outlet that sells goods under the franchisor's name. By following the standards used by all stores in the same chain, the self-motivated franchisee profits from the expertise, goodwill, and reputation of the franchisor.
In the present case, a male supervisor employed by a franchisee allegedly subjected a female subordinate to sexual harassment while they worked together at the franchisee's pizza store. The victim, who is the plaintiff herein, sued the franchisor, along with the harasser and franchisee. The plaintiff claimed that because the franchisor was the “employer” of persons working for the franchisee, and because the franchisee was the “agent” of the franchisor, the latter could be held vicariously liable for the harasser's alleged breach of statutory and tort law.
The trial court granted summary judgment for the franchisor on the ground the requisite employment and agency relationships did not exist. The Court of Appeal disagreed, and reversed the judgment of the trial court.
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 [*478] 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.
Over the past 50 years, the Courts of Appeal, using traditional “agency” terminology, have reached various results on whether a franchisor should be held liable for torts committed by a franchisee or its employees in the course of the franchisee's business. In analyzing these questions, the appellate courts have focused on the degree to which a particular franchisor exercised general “control” over the “means and manner” of the franchisee's operations.
Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.
60 Cal. 4th 474 *; 333 P.3d 723 **; 177 Cal. Rptr. 3d 539 ***; 79 Cal. Comp. Cases 1111 ****; 2014 Cal. LEXIS 6251; 124 Fair Empl. Prac. Cas. (BNA) 994; 2014 WL 4236175
TAYLOR PATTERSON, Plaintiff and Appellant, v. DOMINO'S PIZZA, LLC, et al., Defendants and Respondents.
Subsequent History: Rehearing Denied by Supreme Court September 24, 2014
Reported at Patterson v. Domino's Pizza Llc, 2014 Cal. LEXIS 9349 (Cal., Aug. 28, 2014)
Time for Granting or Denying Rehearing Extended Patterson v. Domino's Pizza Llc, 2014 Cal. LEXIS 10048 (Cal., Sept. 8, 2014)
Rehearing denied by Patterson v. Domino's Pizza LLC, 2014 Cal. LEXIS 7995 (Cal., Sept. 24, 2014)
Prior History:  Civil No. B235099—Court of Appeal, Second Appellate District, Division Six; Ventura County Superior Court No. 56-2009-00347668-CU-OE-SIM—Hon. Barbara A. Lane, Judge
Patterson v. Domino's Pizza, LLC, 207 Cal. App. 4th 385, 143 Cal. Rptr. 3d 396, 2012 Cal. App. LEXIS 753 (Cal. App. 2d Dist., 2012)
Disposition: Petition for review of a judgment of the Court of Appeals, Second Appellate District, Division Six. Petition for review granted and judgment of the Court of Appeals reversed.
franchisee, franchisor, harassment, franchise, sexual, training, hiring, vicarious, day-to-day, customer, contractual, deposition, discipline, terminate, leader, pizza, trademark, workplace, format, personnel, brand, recommended, contractor, excerpts, advice, inspections, misconduct, handling, italics, triable
Labor & Employment Law, Sexual Harassment, Scope & Definitions, General Overview, Employer Liability, Harassment by Supervisors, Torts, Vicarious Liability, Employers, Business & Corporate Law, Distributorships & Franchises, Franchise Relationships, Franchise Agreements, Franchisees & Franchisors, Discrimination, Civil Procedure, Appeals, Summary Judgment Review, Standards of Review, Summary Judgment, Evidentiary Considerations, Absence of Essential Element, Burdens of Proof, Movant Persuasion & Proof