California Supreme Court Rules Domino’s Not Liable for Sexual Harassment

The California Supreme Court ruled that Domino’s Pizza is not vicariously liable for the acts of one of its restaurant franchisees.  The Court ruled that the act of franchising, or entering into a franchise relationship, did not constitute an agency-type relationship for the purpose of holding the parent company liable for the acts of an employee in a franchised store.   The high court found that the franchisor was only potentially liable for the acts of a franchisee if it controlled “day to day aspects of workplace behavior” including supervisory authority over the workers.

The case stemmed from allegations made by a former Domino’s pizza store worker at a franchised location owned and operated by a company called Sui Juris LLC.   The worker claimed that she had been sexually harassed by a manger.  The worker sued the franchisee owner, as well as the Domino’s parent company, alleging that the franchisee was an “agent” of the parent company, and that her “employer” was the parent company.

The court rejected these claims, ruling that Sui Juris LLC, and not Domino’s, had control over the day-to-day operations of the location, including implementing appropriate sexual harassment policies, performing sexual harassment training, and overseeing the acts of its in-store managers.

While franchisors may be breathing a sigh of relief, this case illustrates how important it is for franchisees, and all other independent businesses, to develop their own policies and procedures for preventing workplace harassment and discrimination. Attorney Nancy Gray represents Southern California businesses and individuals in all aspects of labor and employment law, including resolving workplace employment issues before they lead to costly, protracted litigation.  Attorney Gray can help your business develop policies and best practices for human resources, and resolve potential labor and employment disputes.  Put a committed, knowledgeable labor and employment attorney to work for your business today.   Call Attorney Gray at (310) 452-1211 or visit Gray & Associates online for a free consultation.

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