Menu
Blog Banner Image

The Franchise Memorandum

Court Grants Dismissal of Discrimination Claims Against Franchisor

A federal district court in Arizona recently held that a franchisor was not liable for Title VII claims brought by an employee of one of its franchisees. In Courtland v. GCEPSurprise, LLC, 2013 U.S. Dist. LEXIS 105780 (D. Ariz. July 29, 2013), the plaintiff sued a franchisee as well as the franchisor, Buffalo Wild Wings, alleging that she was subject to sexual discrimination, harassment, and retaliation by members of the restaurant’s management staff. Buffalo Wild Wings moved for summary judgment on the plaintiff’s claims and argued that it could not be held liable for her allegations of employment discrimination because it was not her employer, nor was the franchisee its agent for purposes of vicarious liability.

In granting summary judgment, the court held that Buffalo Wild Wings was not liable because the record did not establish that it controlled the labor relations of its franchisee. The court first applied the joint employer test, under which a franchisor can be held liable for the discriminatory conduct of a franchisee if both businesses exercise significant control over the terms and conditions of a claimant’s employment. The court determined that Buffalo Wild Wings did not qualify as a joint employer because the franchisee had complete independence in making employment decisions related to the plaintiff and other staff. The court further found that the franchisor’s general supervision over the franchisee’s products and operations was insufficient to establish a joint employment relationship absent its involvement in day-to-day employee management. In addition, Buffalo Wild Wings could not be held vicariously liable under an agency theory because the franchisee had sole responsibility for hiring, training, supervising, scheduling, compensating, reviewing, and terminating employees. Finally, there was no evidence in the record that the plaintiff reasonably relied upon representations by the franchisor that it was her employer such that liability could be imposed under a theory of apparent authority.

Email LinkedIn Twitter Facebook

The information contained in this post is provided to alert you to legal developments and should not be considered legal advice. It is not intended to and does not create an attorney-client relationship. Specific questions about how this information affects your particular situation should be addressed to one of the individuals listed. No representations or warranties are made with respect to this information, including, without limitation, as to its completeness, timeliness, or accuracy, and Lathrop GPM shall not be liable for any decision made in connection with the information. The choice of a lawyer is an important decision and should not be based solely on advertisements.

About this Publication

The Franchise Memorandum is a collection of postings on summaries of recent legal developments of interest to franchisors brought to you by Lathrop GPM LLP. 

To subscribe to monthly emails for The Franchise Memorandum, please click here

Topics

Archives

2022

2021

2020

2019

2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

Blog Authors