Here, for purposes of a summary judgment motion, a franchisor's actions speak louder than words in the franchise agreement.
Plaintiff Taylor Patterson was an employee of defendant Sui Juris, LLC, doing business as Domino's Pizza (Sui Juris). Patterson alleges she was sexually harassed and assaulted at her job. She filed an action pursuant to Government Code section 12940 (FEHA [California Fair Employment and Housing Act]) against Sui Juris and Domino's Pizza, LLC, Domino's Pizza, Inc., and Domino's Pizza Franchising, LLC (collectively Domino's).
Patterson was a teenage employee of Sui Juris, a Domino's pizza franchisee. Renee Miranda was the assistant manager of that restaurant. Patterson claimed Miranda sexually harassed and assaulted her at work.
Patterson filed an action against Miranda, Sui Juris, and the franchisor Domino's, alleging causes of action for sexual harassment in violation of FEHA, failure to prevent discrimination, retaliation for exercise of rights, infliction of emotional distress, assault, battery and constructive wrongful termination. She claimed Sui Juris and Domino's were Miranda's employers and were vicariously liable for his actions under the doctrine of respondeat superior.
Domino's answered the complaint and filed a cross-complaint against Miranda seeking "indemnity" and "apportionment of fault." Sui Juris filed for bankruptcy relief.
Daniel Poff, the Sui Juris owner, testified at his deposition that Claudia Lee, a Domino's "area leader," told him to fire Miranda. He said he had to comply with the instructions of the Domino's area leaders because "[i]f you didn't, you were out of business very quickly." He said Lee also told him to fire another employee because of his performance in handling bags. Poff had no choice; he had to follow Lee's instructions and fire that employee. His operation was monitored by the Domino's inspectors, and their decisions determined whether he could maintain his franchise.
Domino's filed a motion for summary judgment claiming that (1) Sui Juris was an independent contractor pursuant to the terms of a written franchise agreement and (2) there was no principal-agency relationship between Sui Juris and Domino's. The notice of motion indicated that summary judgment on all causes of action was based on the ground that "DOMINO'S was not PATTERSON'S employer and was not involved in the training, supervision or hiring of any employees of Defendant SUI JURIS."
Patterson opposed the motion and attached, among other things, Poff's deposition. She claimed Domino's exercised substantial control over Sui Juris, and consequently there are triable issues of fact relating to Domino's liability.
Domino's Control over Sui Juris
"`We review a summary judgment motion de novo to determine whether there is a triable issue as to any material fact ....'" (Suarez v. Pacific Northstar Mechanical, Inc. (2009) 180 Cal.App.4th 430, 436 [103 Cal.Rptr.3d 168].) "`We are not bound by the trial court's stated reasons or rationales.'" (Ibid.) "`"In practical effect, we assume the role of a trial court ...."'" (Ibid.) "`Summary judgment is a drastic remedy to be used sparingly, and any doubts about the propriety of summary judgment must be resolved in favor of the opposing party.'" (Ibid.)
The trial court found that Sui Juris was an independent contractor and that Miranda was "not an employee or agent of ... Domino's ... for purposes of imposing vicarious liability."
The Franchise Agreement
The franchise agreement provides, in relevant part, that Sui Juris "shall be solely responsible for recruiting, hiring, training, scheduling for work, supervising and paying the persons who work in the Store and those persons shall be your employees, and not [Domino's] agents or employees." Domino's claims this provision, as a matter of law, removes its control over franchisee-employee matters.
Patterson contends the language relied on by Domino's is limited or qualified by other provisions of the agreement that vest substantial control in Domino's. The agreement provides that Domino's sets both the "qualifications" for the franchisee's employees and the standards for their "demeanor." Franchisee employees may not operate a store without first disclosing their identities to Domino's. A violation of this provision may result in termination of the franchise. The franchisee is required to install a "PULSE," or another computer system designated by Domino's, for training employees. The type of training is determined by Domino's.
Domino's Manager's Reference Guide (MRG) describes the specific employment hiring requirements for all "personnel involved in product delivery," and it describes the documents that must be included in their personnel files. It requires all employees to submit "[t]ime cards and daily time reports." It specifies standards for employee hair, facial hair, "[d]yed hair," jewelry, tattoos, fingernails, nail polish, shoes, socks, jackets, belts, gloves, watches, hats, skirts, visors, body piercings, earrings, necklaces, wedding rings, "[t]ongue rings," "clear tongue" retainers, and undershirts.
Domino's claims the franchise agreement grants Sui Juris the freedom to conduct its own independent business. But provisions of the agreement
Domino's also decides the franchisee's bookkeeping and recordkeeping methods. It may determine the franchisee's location and right to relocate and may send inspectors to monitor its operations. (Kuchta v. Allied Builders Corp., supra, 21 Cal.App.3d at p. 547 [franchisor's "right to control the location of the franchisee's place of business" and the right to send inspectors are factors supporting a finding that the franchisee is an agent].) It also controls whether the franchisee may "engage, or own any interest, in any other business activity" or "be employed by any other business." Domino's requires franchisees to report "weekly" on sales, and to provide it with their state and local business tax returns "for any period" and "such other information as [Domino's] may reasonably require ...."
Domino's MRG specifies the standards a franchisee is expected to maintain as "minimum guidelines for the operation of all Domino's Pizza stores ...." These include a variety of requirements in a variety of areas, which include: bank deposits, safes, "front till" cash limits, type of credit cards that must be accepted, mobile phone use, store closing procedures, store records, refuse removal, radar detectors, phone caller identification requirements, security, delivery staffing, holiday closings, stereos, tape decks, wall displays, franchisee Web sites, "in-store conversations," and literature that is "allowed in a store." (See Miller v. McDonald's Corp. (1997) 150 Or.App. 274 [945 P.2d 1107, 1111] [manual describing how "the franchisee was to carry out its responsibilities in considerable detail" supported claim of agency]; see also Parker v. Domino's Pizza, Inc. (Fla.Dist.Ct.App. 1993) 629 So.2d 1026, 1029 ["manual which Domino's provides to its franchisees is a veritable bible for overseeing a Domino's operation"].)
Other Evidence of Control
Domino's suggests that the evidence shows (1) Sui Juris made all the decisions regarding the employees of that franchise; (2) Domino's assumed no role and exercised no actual control over employee discipline; and (3) Poff, the owner of Sui Juris, made his own voluntary decision to terminate Miranda.
Patterson responds that she presented evidence supporting reasonable inferences that, apart from the provisions of the franchise agreement (1) Domino's exercised extensive local management control over Sui Juris, (2) it had control over employee conduct and discipline, (3) a Domino's area leader was deciding which Sui Juris employees should be fired, (4) Domino's ordered Poff to terminate Miranda, and (5) Poff complied as he had no choice given the extensive control Domino's exercised over his franchise. Patterson claims there are triable issues of fact about the extent of Domino's control.
Poff said Domino's provided guidelines about the employees he could hire. They had to "look and act a certain way," and he implemented those policies when he hired applicants. Domino's guidelines also included policies on employee "attendance" and sexual harassment. Poff's testimony suggests that Domino's oversight of his franchise was extensive. Domino's sent inspectors to verify compliance, "called the store on the sly," and used "mystery shoppers" to determine whether Sui Juris was following its procedures. Poff said, "I was getting ticky-tacked to death by inspectors.... [T]he way they changed the operating agreement made it easier for them to put you out of business by how they could write you up and how they graded their inspections."
Poff said he was also under the direction of Domino's area leader Claudia Lee. He indicated that Lee told him which of his employees should be terminated, and he had no choice but to comply. He said Lee told him to fire one Sui Juris employee, who was not following procedures relating to the use of bags. He said, "I had to pull the trigger on the termination, [and] it was very strongly hinted that there would be problems if I did not do so. [Domino's] area leaders would pull you into your office ... and tell you what they wanted. If they did not get what they wanted, they would say you would be in trouble.... I never said `no' intentionally to an area leader."
Lee told Poff to terminate Miranda. She said, "`You've got to get rid of this guy.'" She instructed him to "re-train" his employees. Poff said he had to follow directions of the Domino's area leaders. He said, "If you didn't, you were out of business very quickly."
The trial court found that even if Domino's is considered the employer, there are no triable issues of fact showing it had notice of, ratified, or condoned Miranda's conduct. It ruled that there are no facts showing prior incidents of sexual harassment at the restaurant. It concluded Patterson could not prevail. These issues are relevant where an employee claims harassment by another employee.
But a different standard applies where the harasser is the employee's supervisor. (Dee v. Vintage Petroleum, Inc. (2003) 106 Cal.App.4th 30, 36 [129 Cal.Rptr.2d 923].) The trial court found that Miranda was the restaurant "manager." Consequently, Miranda was not merely another coworker. Patterson was a 16-year-old employee, a minor, subject to his control and supervision on the job.
A single sexually offensive act by one employee against another usually is not sufficient to establish employer liability. (Dee v. Vintage Petroleum, Inc., supra, 106 Cal.App.4th at p. 36.) But "where th[e] act is committed by a supervisor, the result may be different." (Ibid.) "`Because the employer cloaks the supervisor with authority, we ordinarily attribute the supervisor's conduct directly to the employer.'" (Ibid.) "`Thus, a sexual assault by a supervisor, even on a single occasion, may well be sufficiently severe so as to alter the conditions of employment and give rise to a hostile work environment claim.'" (Ibid., italics added.)
The trial court's finding that Domino's made a sufficient evidentiary showing to support its motion is not supported by the record. We have
The judgment is reversed. Costs on appeal are awarded to Patterson.
Yegan, J., and Perren, J., concurred.