Domino’s corporation not held liable for CA sex harassment claim

Posted in Sexual Harassment on September 4, 2014

America is home of the restaurant and retail chain. Some fast-food restaurants and other retail stores may have started locally but now have a presence and brand recognition across the United States. Some have a reach extending across the globe.

With fast-food restaurants in particular, there are two basic ways of doing business as a chain. Each individual store can be corporate-owned or it can be a franchise – locally owned but beholden in some respects to the corporation as a whole. A case recently decided by the California Supreme Court suggests that in certain matters such as sexual harassment, a corporation is protected from liability for incidents that occurred at a franchised location.

The case concerned a young California woman who began working at a Domino’s Pizza location in 2008. She was allegedly sexually harassed by her male manager, including being subjected to lewd comments and unwelcome touching of her breasts and buttocks. The incidents were reported to local police and Domino’s corporate office. When the young woman returned after about a week, she noticed that her hours had been reduced. She later resigned, alleging retaliation for filing a sexual harassment report.

She sued both the local franchise (Sui Juris LLC) and Domino’s corporate (Domino’s Pizza LLC). A trial judge originally gave summary judgment to Domino’s LLC, citing Sui Juris as the actual employer. An appellate court overturned that ruling.

Recently, the California Supreme Court ruled that Domino’s LLC is not liable for the sexual harassment that occurred at that particular franchise. One Justice explained that whether or not a franchisor is liable depends on the relationship between franchisor and franchisees.

In this case, Domino’s LLC is largely responsible for overseeing food prep and delivery standards and how the store is run. “However, there was considerable, essentially uncontradicted evidence that the franchisee [Sui Juris LLC] made day-to-day decisions involving the hiring, supervision and disciplining of employees,” the justice noted.

Franchisors have enjoyed similar legal protections for a long time in the United States, but recent court rulings have begun to change that. Hopefully, the plaintiff in this case will at least be able to collect appropriate damages from the franchisee that directly employed her and the perpetrator.

Source: Courthouse News Service, “Domino’s Harassment Claim Tossed in Calif.,” Jeff D. Gorman, Aug. 29, 2014