8/29/2014 12:33:00 PM,
Jeff D. Gorman
(CN) - Domino's Pizza is not responsible for the sexual harassment that took place at one of its franchise locations, the California Supreme Court ruled.
Taylor Patterson began working at Domino's Pizza in November 2008. She testified that her assistant manager, a man named Renee Miranda, sexually harassed her when they worked together.
She complained that Miranda made lewd comments and gestures and grabbed her buttocks and breasts. Her father called the police and the Domino's corporate office.
Patterson stayed away for a week before returning. She later resigned, perceiving that her hours had been reduced because of her complaint.
Patterson sued Miranda, Domino's Pizza LLC and the franchise, Sui Juris LLC, for sexual harassment, failure to take reasonable steps to avoid harassment and retaliation for reporting harassment.
She also asserted claims of assault, battery, constructive termination and intentional infliction of emotional distress.
Domino's argued that Sui Juris was Patterson's actual employer. The trial court agreed, granting the company's motion for summary judgment.
However, the California Court of Appeals overturned the decision, setting up a showdown in California Supreme Court, which ruled in favor of Domino's.
The answer to the question of whether a franchisor can be held liable for employee behavior "lies in the inherent nature of the franchise relationship itself," Justice Marvin R. Baxter wrote.
He noted that Domino's oversaw the standards for making and delivering the pizza, running the store and preserving the company's brand image.
"However, there was considerable, essentially uncontradicted evidence that the franchisee made day-to-day decisions involving the hiring, supervision and disciplining of his employees," Baxter stated.
He added that Patterson followed the policy of franchise owner Daniel Poff by reporting the harassment.
"The franchisee suspended the offender. Nothing contractually required or allowed the franchisor to improve on this process," Baxter wrote.
Also, Baxter rejected Patterson's argument that Domino's has such control over its stores that the franchises serve as the company's agents.
"Domino's lacked the general control of an 'employer' or 'principal' over relevant day-to-day aspects of the employment and workplace behavior of Sui Juris's employees," he wrote.
Justice Kathryn M. Werdegar dissented from her colleagues, citing a situation in which Poff fired manager Dave Knight, who delivered non-Domino's food to schools.
Werdegar noted that Domino's area leader Claudia Lee "indicated to Poff that not firing Knight might cause Poff to lose his franchise."
Werdegar stated that provided the proper context for how Poff dealt with Miranda, who was suspended before voluntarily leaving the company.
"Upon learning of plaintiff's allegations of harassment against Miranda, Lee told Poff, 'You've got to get rid of this guy," Werdegar noted.