Metropolitan News-Enterprise


Friday, October 12, 2012


Page 1


S.C. to Review Ruling Against Pizza Chain on Harassment Claim




The California Supreme Court has agreed to decide whether a franchisor can be held liable for sexual harassment of a franchisee’s employee by the franchisee’s supervisor.

The justices, at their weekly conference in San Francisco Wednesday, unanimously granted review of the June 27 ruling of this district’s Court of Appeal in Patterson v. Domino’s Pizza, LLC (2012)  207 Cal.App.4th 385.

Div. Six had overturned a summary judgment in favor of Domino’s. The panel said the former employee, Taylor Patterson, could sue the chain for sexual harassment and retaliation after she was allegedly assaulted by her manager and lost her job.

Ventura Superior Court Judge Barbara Lane had ruled that Patterson could only sue the franchisee that she worked for, which the judge said controlled her employment based on the terms of the franchise agreement. But in this case, Court of Appeal Presiding Justice Arthur Gilbert wrote, “a franchisor’s actions speak louder than words in the franchise agreement.”

FEHA Violation

Patterson, who was 16 years old at the time, alleged that Daniel Poff, owner of the now-bankrupt franchise, forced her out after she complained about the assault. She sued the franchisee, along with Domino’s, on claims of sexual harassment in violation of the Fair Employment and Housing Act, failure to prevent discrimination, retaliation for exercise of rights, infliction of emotional distress, assault, battery and constructive wrongful termination. 

Poff testified in his deposition that an “area leader” for Domino’s told him to fire the manager, and that experience told him that if he failed to comply he’d “be out of business very quickly.” He described the corporation as extremely overbearing; management was constantly inspecting the operation and he “was getting ticky-tacked to death,” he said.

Domino’s moved for summary judgment on the ground that it was not Patterson’s or the manager’s employer “and was not involved in the training, supervision, or hiring of any employees of” the franchisee, Sui Juris, LLC.

Patterson offered Poff’s deposition in opposition to the motion. In granting summary judgment, Lane reasoned that the franchise agreement made the franchisee solely responsible for “supervising and paying the persons who work in the store.”

Gilbert, however, noted that the franchise agreement and related documents give Domino’s “substantial control” over a franchisee’s employees. He cited requirements that personnel files be maintained in a certain manner, as well as grooming and dress standards.

Domino’s also maintains full or partial control over various aspects of the business, including the computer system, tax accounting, store hours, advertising, signage, e-mail capabilities, equipment, furniture, fixtures, décor, methods of payment, pricing, and insurance, the presiding justice pointed out.

Not Controlling

While courts in other states have suggested that a franchise agreement is dispositive on issues of control, California treats the agreement’s provisions as relevant, but not dispositive, Gilbert said. In this case, he wrote, the totality of the circumstances suggests that the issue is triable.

The jury, he said, may choose to disbelieve Poff and accept Domino’s claim that the franchisee had full control over decisions related to employment.

Gilbert went on to say that the trial judge erred in concluding that Patterson presented insufficient evidence that Domino’s knew of, ratified, or condoned the manager’s conduct. Lane, he explained, erroneously applied a standard applicable to harassment by a co-worker, not a supervisor.

Unlike in cases involving co-workers, he noted, an employer may be held liable for a single act of harassment by a supervisor if it is egregious enough. A teenage employee’s claim of sexual assault may qualify, Gilbert said.

The court Wednesday also agreed to decide whether a medical report is inadmissible in a workers’ compensation case if it has been prepared by a person who is not part of a medical provider network established pursuant to recent changes in the law. This district’s Div. Seven ruled in May, in Valdez v. Workers’ Compensation Appeals Bd.{2012] 201 Cal.App.4th 1, that the rule of exclusion laid down by [Labor Code] section 4616.6 applies only when there has been an independent medical review performed under the authority of section 4616.4.”

The justices also agreed to decide two issues arising from a drug case in Santa Clara County.  David Palmer pled no contest to possession of MDMA and was sentenced to three years’ probation, including nine months in jail, but argued on appeal that there was no factual basis for the plea.

The Sixth District Court of Appeal found that the stipulation of counsel was sufficient to establish that there was a factual basis, but the Supreme Court said it would hear the case, People v. Palmer, H036979. limiting review to the following questions:

“Is a claim that the trial court failed to establish a factual basis for defendant’s plea within the meaning of Penal Code section 1192.5 not cognizable on appeal where defense counsel stipulated to a factual basis for the plea? If the claim is cognizable, did defense counsel’s bare stipulation to a factual basis without reference to any document describing the facts sufficiently establish a factual basis? 


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