Patterson v. Domino's Pizza, LLC
60 Cal. 4th 474
| Cal. | 2014Background
- Taylor Patterson (employee of Sui Juris, a Domino’s franchise) alleged sexual harassment by her assistant manager Renee Miranda and sued Miranda, Sui Juris (franchisee), and Domino’s (franchisor) under FEHA and tort theories.
- Domino’s moved for summary judgment arguing it was not the employer or principal of Sui Juris’s employees and thus not vicariously liable; trial court granted Domino’s motion and dismissed claims against it.
- The Court of Appeal reversed, finding triable issues about Domino’s control over day-to-day operations and discipline (citing area-leader involvement and franchise standards).
- Supreme Court granted review to resolve whether a franchisor can be vicariously liable as an employer/principal for workplace torts committed by one franchisee employee against another.
- The franchise agreement and manuals showed Domino’s imposed uniform operational standards, inspections, and training modules (PULSE), but expressly treated franchisees as independent contractors and declared franchisee employees to be franchisee employees; franchisee owner Poff retained hiring, supervision, discipline, and personnel decision authority and implemented his own sexual-harassment policy.
- The Supreme Court reversed the Court of Appeal: a franchisor is liable as an employer/principal only if it retained or assumed general day-to-day control over hiring, supervision, discipline, discharge, and workplace behavior of the franchisee’s employees; the record here did not create a triable issue on that control element.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a franchisor can be an "employer" or "principal" for vicarious liability (FEHA/respondeat superior) for torts by one franchisee employee against another | Patterson: Domino’s comprehensive operating system and area-leader directives show sufficient control to make Domino’s the employer/principal of franchisee employees | Domino’s: Franchise contract and practice reserved hiring, firing, supervision, discipline, and day-to-day control to the franchisee, so Domino’s is not an employer/principal | A franchisor may be liable only if it retained or assumed general day-to-day control over hiring, direction, supervision, discipline, discharge, and workplace behavior; mere uniform standards are insufficient (reversed Court of Appeal) |
| Whether Domino’s conduct created a triable issue of fact on day-to-day control (sufficient to defeat summary judgment) | Patterson: Area leader’s statements (e.g., “get rid of this guy”) and enforcement of standards created reasonable inference of control over discipline and employment | Domino’s: Statements were advisory; Poff testified he made hiring/discipline decisions and could ignore area-leader suggestions; no contractual or practical evidence that Domino’s exercised discharge authority | Held: No reasonable inference that Domino’s had the requisite general control; Domino’s evidence that Poff had sole authority over personnel and discipline was undisputed, so no triable issue existed |
| Whether franchise operating systems (manuals, inspections, training) alone create employer/agency status | Patterson: System-wide controls effectuate control over means and manner, supporting agency/employer status | Domino’s: Such controls protect trademark and uniformity but do not translate into the specific, day-to-day control over personnel required for vicarious liability | Held: Uniform operational rules for brand protection do not, by themselves, create an employment/agency relationship for vicarious liability purposes |
Key Cases Cited
- Nichols v. Arthur Murray, Inc., 248 Cal.App.2d 610 (1967) (franchisor held liable where contract left franchisee little day-to-day control)
- Cislaw v. Southland Corp., 4 Cal.App.4th 1284 (1992) (franchisor not an employer where franchisee retained employment and day-to-day control)
- State Dept. of Health Services v. Superior Court, 31 Cal.4th 1026 (2003) (under FEHA, employer strictly liable for supervisor sexual harassment)
- Vernon v. State of California, 116 Cal.App.4th 114 (2004) (use of totality-of-circumstances/control test to determine employment relationship)
- S. G. Borello & Sons, Inc. v. Dept. of Industrial Relations, 48 Cal.3d 341 (1989) (multifactor test for employment/independent contractor distinctions)
- Mary M. v. City of Los Angeles, 54 Cal.3d 202 (1991) (respondeat superior permits employer liability for employee torts within scope of employment)