Franchisor Not Liable for Sexual Harassment Claims Asserted by Franchisee’s Employee, California High Court Rules

A franchisor could not be held vicariously liable under the California Fair Employment and Housing Act (“FEHA”) for alleged sexual harassment in the franchisee’s workplace in the absence of evidence establishing the franchisor “retained or assumed a general right of control” over employment decisions and the “day-to-day aspects of the workplace behavior of the franchisee’s employees,” the California Supreme Court has ruled, 4-3. Patterson v. Domino’s Pizza, LLC, No. S204543 (Cal. Aug. 28, 2014). Accordingly, the Supreme Court reversed the Court of Appeal’s decision and reinstated summary judgment in the franchisor’s favor.