Menu
Blog Banner Image

The Franchise Memorandum

Federal Court Denies Motions to Dismiss Vicarious Liability for Sex Trafficking

A federal court in Ohio denied G6 Hospitality and Wyndham’s motions to dismiss claims that they are vicariously liable for federal sex trafficking claims brought against their franchisees. H.H. v. G6 Hospitality, LLC, 2019 WL 6682152 (S.D. Ohio Dec. 6, 2019). H.H., the sex trafficking victim, alleged that she was trafficked for a period of five months at various Columbus area hotels within G6 and Wyndham’s franchise systems. H.H. claimed that the hotels were or should have been aware of the sex trafficking after seeing various items or witnessing certain events, and the hotels did nothing to prevent it.

The court denied G6 and Wyndham’s motions to dismiss. The court noted that the Trafficking Victims Protection Reauthorization Act creates civil liability not just for sex traffickers but also for “beneficiaries,” which includes persons who knew or should have known about the trafficking, participated, and benefited financially. The court first determined that H.H. had stated a claim against the franchisee hotels under the Act based on the following facts: the hotel repeatedly rented rooms where the sex trafficking occurred; the hotels were paid by H.H.’s trafficker; hotel staff found certain items that were sexual in nature; hotel staff found H.H. physically restrained and begging for help; online reviews about the trafficking scheme at the hotel were publically available; and the hotels failed to train employees or implement policies to stop trafficking. The court then determined that it could not dismiss the vicarious liability claims against G6 and Wyndham because G6 and Wyndham shared profits with their franchisee hotels and set certain policies and standards for hotel employees, training, building maintenance, operating, and prices while conducting inspections to maintain those policies and standards. The shared nature of the profits and “common policies and practices” constituted sufficient allegations of control for H.H. to have pleaded a joint employer relationship establishing vicarious liability for the sex trafficking claims.

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