Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-90-05013/USCOURTS-ca10-90-05013-0/pdf.json

Parties Involved:
Johnnie L. Evans
Appellant
McDonald's Corporation
Appellee
McDonald's of Claremore
Appellee
David McMahan
Appellee

Document Text:

ROBERT L. HOECKER 

CLERK 

UNITED STATES COURT OF APPEALS 

TENTH CIRCUIT 

UNITED STATES COURTHOVSE 

DE!\'YER, COLORWO 80:!P4 

June 20, 1991 

TO ALL RECIPIR~TS OF THE CAPTIONED OPINION 

Filed June 11, 1991, by Judge Logan 

Re: 90-5013, Evans v. McDonald's Corp. 

(Lower docket: 89-C-49-E,) 

( 303) 844-3157 

FTS 5M-3I57 

The court has ordered the order and judgment filed April 9, 

1991, published. We previously transmitted a copy of the published 

opinion with the erroneous file date of June 11, 1991. Please substitute the corrected cover page for the one on the opinion mailed to 

you on June 11, 1991. 

Please call this office if you have questions. 

RIR:oac 

Enclosure 

Sincerely, 

ROBERT L. HOECKER 

Clerk 

By: @tex-Q_Q 

Deputy Clerk 

' ~ 

Appellate Case: 90-5013 Document: 01019298343 Date Filed: 04/09/1991 Page: 1 
• 

PUBLISH 

UNITED STATES COURT OF APPEALS 

TENTH CIRCUIT 

JOHNNIE L. EVANS, 

Plaintiff-Appellant, 

FILED 

United States Co".lrt of Ap;>cal~ 

Tenth Circuit 

APR 9 199fJ 

ROBERT L. HOECKER 

Clerk 

v. 

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) 

) 

) 

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) 

) 

) 

) 

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No. 90-5013 

McDONALD'S CORPORATION, a Delaware 

corporation; McDONALD'S OF CLAREMORE, 

a defunct Oklahoma corporation; 

DAVID McMAHAN, 

Defendants-Appellees. 

APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF OKLAHOY.A 

(D.C. No. 89-C-49-E) 

Submitted on the briefs: 

Steven M. Dickson, of Dickson & Pope, P.A., Topeka, Kansas, and 

Leslie Shelton, Tulsa, Oklahoma, for Plaintiff-Appellant. 

Patrick M. Ryan and Charles E. Geister III, of Ryan, Corbyn & 

Geister, Oklahoma City, Oklahoma, for Defendant-Appellee 

McDonald's Corporation, and Benjamin J. Butts (Short, Barnes, 

Wiggins, Margo & Adler, of Counsel), Oklahoma City, Oklahoma, for 

Defendant-Appellee David McY~han. 

Before LOGAN, MOORE, and BALDOCK, Circuit Judges. 

LOGAN, Circuit Judge. 

Appellate Case: 90-5013 Document: 01019298343 Date Filed: 04/09/1991 Page: 2 
• ' 

PUBLISH 

FILED 

United States Co\trc Qf Appeals 

Tenth Circuit 

JUN 111991 

UNITED STATES COURT OF APPEALS 

ROBERT L. HOECKER 

TENTH CIRCUIT Clerk 

JOHNNIE L. EVANS, 

Plaintiff-Appellant, 

v. 

McDONALD'S CORPORATION, a Delaware 

corporation; McDONALD'S OF CLAREMORE, 

a defunct Oklahoma corporation; 

DAVID McMAHAN, 

Defendants-Appellees. 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

No. 90-5013 

APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF OKLAHOMA 

(D.C. No. 89-C-49-E) 

Submitted on the briefs: 

Steven M. Dickson, of Dickson & Pope, P.A., Topeka, Kansas, and 

Leslie Shelton, Tulsa, Oklahoma, for Plaintiff-Appellant. 

Patrick M. Ryan and Charles E. Geister III, of Ryan, Corbyn & 

Geister, Oklahoma City, Oklahoma, for Defendant-Appellee 

McDonald's Corporation, and Benjamin J. Butts (Short, Barnes, 

Wiggins, Margo & Adler, of Counsel), Oklahoma City, Oklahoma, for 

Defendant-Appellee David McMahan. 

Before LOGAN, MOORE, and BALDOCK, Circuit Judges. 

LOGAN, Circuit Judge. 

Appellate Case: 90-5013 Document: 01019298343 Date Filed: 04/09/1991 Page: 3 
Plaintiff Johnnie L. Evans appeals from a district court 

order granting summary judgment to defendants David McMahan and 

McDonald's Corporation on her Title VII claims and dismissing her 

pendent state claims. 1 Evans managed two McDonald's restaurants. 

She managed the first, located in Wellston, Oklahoma, until 

December 1986, when she was transferred to the second, located in 

Claremore, Oklahoma. Both restaurants were owned and operated by 

Everett Allen, a McDonald's franchisee. Evans alleged that she 

was sexually harassed by David McMahan, beginning while she was 

employed at the Wellston restaurant and continuing into her 

employment at the Claremore restaurant. McMahan was employed at 

the time by McDonald's Corporation as a consultant. 

Evans filed a complaint with the EEOC and the Oklahoma Human 

Rights Commission (OHRC). The following month, Allen sold his 

McDonald's franchises to McDonald's Corporation. McDonald's did 

not retain Evans, although almost all other Claremore location 

employees were retained. Evans subsequently amended her EEOC/OHRC 

complaint to allege retaliatory discharge. She received a Notice 

of Right to Sue from the EEOC. 

Evans filed this lawsuit against McDonald's Corporation, 

David McMahan, and McDonald's of Claremore2 as defendants. Her 

1 After exam~n~ng the briefs and appellate record, this panel 

has determined unanimously that oral argument would not materially 

assist the determination of this appeal. See Fed. R. App. P. 

34(a); lOth Cir. R. 34.1.9. The case is therefore ordered 

submitted without oral argument. 

2 McDonald's of Claremore is apparently no longer a party. The 

district court, in its Order dated December 7, 1989, stated: 

"Defendant McDonald's of Claremore has previously been determined 

to no longer be a viable entity and thus is not a party to this 

action." I R. tab 118 at 1. 

2 

Appellate Case: 90-5013 Document: 01019298343 Date Filed: 04/09/1991 Page: 4 
.,. 

amended complaint alleged sexual harassment in violation of 

42 u.s.c. §§ 2000e through 2000e-17 (Title VII of the Civil Rights 

Act of 1964). She also asserted several pendent state law claims. 

On motion by remaining defendants McDonald's and McMahan the 

district court granted summary judgment to defendants on Evans' 

sexual harassment claims, based on its conclusion that defendants 

were not Evans' employers. The district court dismissed Evans' 

pendent state claims. 

On appeal, Evans argues that summary judgment is inappropriate because the determination whether defendants were her employers is a question of fact. She also contends the district court 

erred in failing to consider her claim for retaliatory failure to 

hire and her claim that McDonald's acquired liability for this 

suit by purchasing Everett Allen's franchises. She does not appeal the district court's dismissal of her pendent state law 

claims. 

We review de novo the district court's grant of summary judgment. Wheeler v. Hurdman, 825 F.2d 257, 260 (lOth Cir.), cert. 

denied, 484 u.s. 986 (1987). We construe the alleged facts in the 

light most favorable to the non-moving party. See id. 

We hold that under no plausible legal theory are defendants 

Evans' employers. Evans essentially concedes that, under either 

common law or the "economic realities" test, defendants are not 

her immediate employers. Appellant's Brief at 2-3. See Wheeler, 

825 F.2d at 268-71 (discussing elements to be considered under 

common law and "economic realities" test in determining whether 

employer/employee relationship exists for Title VII purposes); 

3 

Appellate Case: 90-5013 Document: 01019298343 Date Filed: 04/09/1991 Page: 5 
Broussard v. L.H. Bossier, Inc., 789 F.2d 1158, 1160 (5th Cir. 

1986); Garrett v. Phillips Mills, Inc., 721 F.2d 979, 981-82 (4th 

Cir. 1983); ~also Kennedy v. McDonald's Corp., 610 F. Supp. 

203, 204-05 (S.D.W.Va. 1985) (same, in franchise setting). 

Evans, however, urges us to consider a line of cases in which 

courts have found that two entities' "activities, operations, 

ownership and management are sufficiently interrelated to be 

perceived as a single employer for purposes of Title VII." 

McKenzie v. Davenport-Harris Funeral Home, 834 F.2d 930, 933 (11th 

Cir. 1987); see, ~' EEOC v. Wooster Brush Co. Employees Relief 

Ass'n, 727 F.2d 566, 572 (6th Cir. 1984); Armbruster v. Quinn, 711 

F.2d 1332, 1337-38 (6th Cir. 1983); Baker v. Stuart Broadcasting 

Co., 560 F.2d 389, 391-92 (8th Cir. 1977); Carter v. Shop Rite 

Foods, Inc., 470 F. Supp. 1150, 1160 (N.D. Tex. 1979). In these 

and other cases, courts struggling with the definition of 

"employer" under Title VII have turned for guidance to a test 

promulgated by the National Labor Relations Board. McKenzie, 834 

F.2d at 933. Under this test, the factors to be considered are 

(1) interrelation of operations, (2) centralized control of labor 

relations, (3) common management, and (4) common ownership or 

financial control. Id. 

We need not decide whether to adopt the reasoning of McKenzie 

and like cases, because Evans cannot sustain a cause of action 

even under the theory she advances. 3 Evans contends that, when 

3 In Wheeler, we stated that we would use an economic realities 

test in determining employer/employee relationships under Title 

VII "but only where and to the extent appropriate." 825 F.2d at 

271. We do not decide today whether a Title VII action by a 

(continued on next page) 

4 

Appellate Case: 90-5013 Document: 01019298343 Date Filed: 04/09/1991 Page: 6 
these factors are considered, the ultimate issue--whether 

defendants are Evans' employers--is a question of fact precluding 

summary judgment. Appellant's Brief at 3. On the contrary, the 

essential facts underlying determination of this issue are 

undisputed. Even were we to assume the existence of an interrelation of operations, given the common goals and interaction of 

McDonald's and its independent franchises, the record before us 

indicates no common management, no centralized control of labor 

relations, and no common ownership or financial control. Evans 

does not controvert the facts contained in the record before us 

regarding the independent ownership, labor relations, and 

financial control of McDonald's' franchises. Considering the NLRB 

factors in light of the record before us, we conclude that 

defendants cannot be consolidated with Everett Allen's franchises 

as one employer for Title VII purposes. 

Evans contends that control is the key issue in determining 

an employer/employee relationship, and alleges that McDonald's 

exerted "monumental control" over the operations of Everett 

Allen's franchises. Control is, we agree, an important factor in 

any determination of this issue. See Wheeler, 825 F.2d at 270 

(control over details and results of worker's performance is the 

most important factor in determining employer/employee relationship). In this case McDonald's did not exert the type of control 

that would make it liable as an employer under Title VII. 

McDonald's may have stringently controlled the manner of its 

(continued from previous page) 

franchise employee against the franchisor requires application of 

the economic realities test. 

5 

Appellate Case: 90-5013 Document: 01019298343 Date Filed: 04/09/1991 Page: 7 
franchisee's operations, conducted frequent inspections, and 

provided training for franchise employees. The record also 

indicates, however, that McDonald's did not have control over 

Everett Allen's labor relations with his franchise employees. See 

Armbruster, 711 F.2d at 1337-38 (control over elements of labor 

relations is a central concern); Carter, 470 F. Supp. at 1161 

(without control over labor relations, stringent control over 

details of independent operators did not make defendant an 

employer of operator's employees). McDonald's did not have 

financial control over Everett Allen's franchises. Outside of the 

necessary control over conformity to standard operational details 

inherent in many franchise settings, McDonald's only real control 

over Everett Allen was its power to terminate his franchises. 

Thus, on the record before us, we hold, as a matter of law, that 

McDonald's did not have the control over Everett Allen's 

franchises necessary to make it liable as an employer of Everett 

Allen's employees under Title VII. 

Evans further argues that she raised a claim of retaliatory 

failure to hire as a separate issue from her retaliatory discharge 

claim. 4 She contends that the issue was not disposed of by the 

court's summary judgment ruling and that the court's failure to 

address it was error. McDonald's asserts that the retaliatory 

failure to hire claim was not properly before the district court 

because it was not raised in Evans' amended complaint. 

4 The district properly ruled that Evans' claim for retaliatory 

discharge was disposed of by its conclusion that the defendants 

were not Evans' employers. I R. tab. 118 at 2. 

6 

Appellate Case: 90-5013 Document: 01019298343 Date Filed: 04/09/1991 Page: 8 
In her amended complaint, Evans contended that McDonald's 

failed to retain her in retaliation for bringing a Title VII action. She characterized the failure to retain as a retaliatory 

discharge, a characterization consistent with her theory that 

McDonald's was her employer. It was not until her response brief 

to McDonald's summary judgment motion that Evans characterized her 

retaliation claim as one for failure to hire. 

As a general rule, a plaintiff should not be prevented from 

pursuing a valid claim just because she did not set forth in the 

complaint a theory on which she could recover, "provided always 

that a late shift in the thrust of the case will not prejudice the 

other party in maintaining his defense upon the merits." 

5 C. Wright & A. Miller, Federal Practice & Procedure § 1219 at 

194 (1990); see, ~' Hanson v. Hoffman, 628 F.2d 42, 53 n.11 

(D.C. Cir. 1980). The purpose of "fact pleading," as provided by 

Fed. R. Civ. P. 8(a)(2), is to give the defendant fair notice of 

the claims against him without requiring the plaintiff to have 

every legal theory or fact developed in detail before the 

complaint is filed and the parties have opportunity for discovery. 

See Wright & Miller, §§ 1215, 1219, at 136-147, 188-194. 

We do not believe, however, that the liberalized pleading 

rules permit plaintiffs to wait until the last minute to ascertain 

and refine the theories on which they intend to build their case. 

This practice, if permitted, would waste the parties' resources, 

as well as judicial resources, on discovery aimed at ultimately 

unavailing legal theories and would unfairly surprise defendants, 

7 

Appellate Case: 90-5013 Document: 01019298343 Date Filed: 04/09/1991 Page: 9 
requiring the court to grant further time for discovery or 

continuances. 

Evans first characterized the failure to retain as a retaliatory discharge. In fact, her entire case was premised on the 

theory that McDonald's was her employer, and several months of 

discovery centered around the theory. Nearly eight months after 

Evans filed her amended complaint, she attempted to change her 

theory, arguing that even if McDonald's was not her employer, it 

ought to be liable for failure to hire. Her new theory was 

presented just two weeks before the scheduled trial date, in her 

response to McDonald's motion for summary judgment. See Gulf Oil 

Trading Co. v. M/V Caribe Mar, 757 F.2d 743, 751-52 (5th Cir. 

1985) (court properly exercised discretion in denying plaintiff's 

motion to amend complaint with completely new theory of recovery 

three weeks before trial because of prejudice to defendants and 

delay in proceedings). Moreover, although Evans' new argument--

based on a failure to hire a new employee in retaliation for that 

prospective employee's prior filing of an EEOC complaint--is one 

that has been recognized by the courts, it is sufficiently unique, 

as applied to the facts of this case, that we believe the late 

shift in theories caused substantial prejudice to McDonald's. The 

district court's opinion does not discuss the issue at all, from 

which we must conclude that it did not regard the issue as 

properly before it. 5 We do not find the district court committed 

5 Essentially the only reported cases against a non-employer that 

have succeeded have been against former employers who urged 

another not to hire the plaintiff because of the plaintiff's suits 

against the former employer. See Sherman v. Burke Contracting, 

(continued on next page) 

8 

Appellate Case: 90-5013 Document: 01019298343 Date Filed: 04/09/1991 Page: 10 
• . . 

error in refusing to treat this new claim. See Fisher v. 

Metropolitan Life Ins. Co., 895 F.2d 1073, 1078 (5th Cir. 1990) 

(claim raised not in amended complaint but, rather, in plaintiff's 

response to defendant's motion for summary judgment was not 

properly before district court). 

Finally, Evans contends that McDonald's Corporation bought 

liability for this suit when it purchased Everett Allen's 

franchises. No reading of Evans' first amended complaint supports 

a conclusion that this issue was raised in any manner before her 

response to McDonald's summary judgment motion. For essentially 

the reasons stated above, we hold that the district court did not 

err in failing to consider this issue; it was not properly before 

the district court. See id. at 1078. 

Summary judgment for defendants David McMahan and McDonald's 

Corporation is AFFIRMED. 

(continued from previous page) 

Inc., 891 F.2d 1527 (11th Cir.), cert. denied, 111 s. Ct. 353 

(1990); Rutherford v. American Bank of Commerce, 565 F.2d 1162 

(lOth Cir. 1977). In neither of the two reported cases we have 

found involving suit against a prospective employer, Wrenn v. 

Gould, 808 F.2d 493 (6th Cir. 1987), and Fahie v. New York City 

Dep't of Correction, 737 F. Supp. 15 (S.D.N.Y. 1990), did the 

plaintiff succeed on the merits. But see Storey v. City of Sparta 

Police Dep't, 667 F. Supp. 1164 (M.D. Tenn. 1987) (threat to sue 

the prospective employer if not hired). We have seen no case in 

which the plaintiff had unsuccessfully sued a non-employer under 

Title VII, and when that non-employer would not hire the plaintiff 

it was sued for retaliatory failure to hire--the situation before 

us. 

9 

Appellate Case: 90-5013 Document: 01019298343 Date Filed: 04/09/1991 Page: 11 
.... 

FILED 

UNITED STATES COURT OF APPEALS United States Court of Appeals 

Tenth CiraJit 

FOR THE TENTH CIRCUIT 

JOHNNIE L. EVANS, 

Plaintiff-Appellant, 

v. 

McDONALD'S CORPORATION, a Delaware 

corporation; McDONALD'S OF CLAREMORE, 

a defunct Oklahoma corporation; 

DAVID McMAHAN, 

Defendants-Appellees. 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

ORDER AND JUDGMENT* 

P.PR 9 1991 

ROBERT L. HOECKER 

Clerk 

No. 90-5013 

(D.C. No. 89-C-49-E) 

(N.D. Okla. ) 

Before LOGAN, MOORE, and BALDOCK, Circuit Judges. 

After examining the briefs and appellate record, this panel 

has determined unanimously that oral argument would not materially 

assist the determination of this appeal. See Fed. R. App. P. 

34(a); lOth Cir. R. 34.1.9. The case is therefore ordered submitted without oral argument. 

Plaintiff Johnnie L. Evans appeals from a district court 

order granting summary judgment to defendants David McMahan and 

* This order and judgment has no precedential value and shall 

not be cited, or used by any court within the Tenth Circuit, 

except for purposes of establishing the doctrines of the law of 

the case, res judicata, or collateral estoppel. lOth Cir. R. 

36.3. 

Appellate Case: 90-5013 Document: 01019298343 Date Filed: 04/09/1991 Page: 12 
McDonald's Corporation on her Title VII claims and dismissing her 

pendent state claims. Evans managed two McDonald's restaurants. 

She managed the first, located in Wellston, Oklahoma, until 

December 1986, when she was transferred to the second, located in 

Claremore, Oklahoma. Both restaurants were owned and operated by 

Everett Allen, a McDonald's franchisee. Evans alleged that she 

was sexually harassed by David McMahan, beginning while she was 

employed at the Wellston restaurant and continuing into her 

employment at the Claremore restaurant. McMahan was employed at 

the time by McDonald's Corporation as a consultant. 

Evans filed a complaint with the EEOC and the Oklahoma Human 

Rights Commission (OHRC). The following month, Allen sold his 

McDonald's franchises to McDonald's Corporation. McDonald's did 

not retain Evans, although almost all other Claremore location 

employees were retained. Evans subsequently amended her EEOC/OHRC 

complaint to allege retaliatory discharge. She received a Notice 

of Right to Sue from the EEOC. 

Evans filed this lawsuit against McDonald's Corporation, 

David McMahan, and McDonald's of Claremore1 as defendants. Her 

amended complaint alleged sexual harassment in violation of 

42 u.s.c. §§ 2000e through 2000e-17 (Title VII of the Civil Rights 

Act of 1964). She also asserted several pendent state law claims. 

On motion by remaining defendants McDonald's and McMahan the 

1 McDonald's of Claremore is apparently no longer a party. The 

district court, in its Order dated December 7, 1989, stated: 

"Defendant McDonald's of Claremore has previously been determined 

to no longer be a viable entity and thus is not a party to this 

action." I R. tab 118 at 1. 

-2-

Appellate Case: 90-5013 Document: 01019298343 Date Filed: 04/09/1991 Page: 13 
district court granted summary judgment to defendants on Evans' 

sexual harassment claims, based on its conclusion that defendants 

were not Evans' employers. The district court dismissed Evans' 

pendent state claims. 

On appeal, Evans argues that summary judgment is inappropriate because the determination whether defendants were her employers is a question of fact. She also contends the district court 

erred in failing to consider her claim for retaliatory failure to 

hire and her claim that McDonald's acquired liability for this 

suit by purchasing Everett Allen's franchises. She does not appeal the district court's dismissal of her pendent state law 

claims. 

We review de novo the .district court's grant of summary judgment. Wheeler v. Hurdman, 825 F.2d 257, 260 (lOth Cir.), cert. 

denied, 484 u.s. 986 (1987). We construe the alleged facts in the 

light most favorable to the non-moving party. See id. 

We hold that under no plausible legal theory are defendants 

Evans' employers. Evans essentially concedes that, under either 

common law or the "economic realities" test, defendants are not 

her immediate employers. Appellant's Brief at 2-3. See Wheeler, 

825 F.2d at 268-71 (discussing elements to be considered under 

common law and "economic realities" test in determining whether 

employer/employee relationship exists for Title VII purposes); 

Broussard v. L.H. Bossier. Inc., 789 F.2d 1158, 1160 (5th Cir. 

1986); Garrett v. Phillips Mills, Inc., 721 F.2d 979, 981-82 (4th 

Cir. 1983); see also Kennedy v. McDonald's Corp., 610 F. Supp. 

203, 204-05 (S.D.W.Va. 1985) (same, in franchise setting). 

-3-

Appellate Case: 90-5013 Document: 01019298343 Date Filed: 04/09/1991 Page: 14 
Evans, however, urges us to consider a line of cases in which 

courts have found that two entities' "activities, operations, 

ownership and management are sufficiently interrelated to be 

perceived as a single employer for purposes of Title VII." 

McKenzie v. Davenport-Harris Funeral Home, 834 F.2d 930, 933 (11th 

Cir. 1987); ~' ~' EEOC v. Wooster Brush Co. Employees Relief 

Ass'n, 727 F.2d 566, 572 (6th Cir. 1984); Armbruster v. Quinn, 711 

F.2d 1332, 1337-38 (6th Cir. 1983); Baker v. Stuart Broadcasting 

Co., 560 F.2d 389, 391-92 (8th Cir. 1977); Carter v. Shop Rite 

Foods, Inc., 470 F. Supp. 1150, 1160 (N.D. Tex. 1979). In these 

and other cases, courts struggling with the definition of 

"employer" under Title VII have turned for guidance to a test 

promulgated by the National Labor Relations Board. McKenzie, 834 

F.2d at 933. Under this test, the factors to be considered are 

(1) interrelation of operations, (2) centralized control of labor 

relations, (3) common management, and (4) common ownership or 

financial control. Id. 

We need not decide whether to adopt the reasoning of McKenzie 

and like cases, because Evans cannot sustain a cause of action 

even under the theory she advances. 2 Evans contends that, when 

these factors are considered, the ultimate issue--whether 

defendants are Evans' employers--is a question of fact precluding 

2 In Wheeler, we stated that we would use an economic realities 

test in determining employer/employee relationships under Title 

VII "but only where and to the extent appropriate." 825 F.2d at 

271. We do not decide today whether a Title VII action by a 

franchise employee against the franchisor requires application of 

the economic realities test. 

-4-

Appellate Case: 90-5013 Document: 01019298343 Date Filed: 04/09/1991 Page: 15 
i. 

summary judgment. Appellant's Brief at 3. On the contrary, the 

essential facts underlying determination of this issue are 

undisputed. Even were we to assume the existence of an interrelation of operations, given the common goals and interaction of 

McDonald's and its independent franchises, the record before us 

indicates no common management, no centralized control of labor 

relations, and no common ownership or financial control. Evans 

does not controvert the facts contained in the record before us 

regarding the independent ownership, labor relations, and 

financial control of McDonald's' franchises. Considering the NLRB 

factors in light of the record before us, we conclude that 

defendants cannot be consolidated with Everett Allen's franchises 

as one employer for Title V.II purposes. 

Evans contends that control is the key issue in determining 

an employer/employee relationship, and alleges that McDonald's 

exerted "monumental control" over the operations of Everett 

Allen's franchises. Control is, we agree, an important factor in 

any determination of this issue. See Wheeler, 825 F.2d at 270 

(control over details and results of worker's performance is the 

most important factor in determining employer/employee relationship). In this case McDonald's did not exert the type of control 

that would make it liable as an employer under Title VII. 

McDonald's may have stringently controlled the manner of its 

franchisee's operations, conducted frequent inspections, and 

provided training for franchise employees. The record also 

indicates, however, that McDonald's did not have control over 

Everett Allen's labor relations with his franchise employees. See 

-5-

Appellate Case: 90-5013 Document: 01019298343 Date Filed: 04/09/1991 Page: 16 
Armbruster, 711 F.2d at 1337-38 (control over elements of labor 

relations is a central concern); Carter, 470 F. Supp. at 1161 

(without control over labor relations, stringent control over 

details of independent operators did not make defendant an 

employer of operator's employees). McDonald's did not have 

financial control over Everett Allen's franchises. Outside of the 

necessary control over conformity to standard operational details 

inherent in many franchise settings, McDonald's only real control 

over Everett Allen was its power to terminate his franchises. 

Thus, on the record before us, we hold, as a matter of law, that 

McDonald's did not have the control over Everett Allen's 

franchises necessary to make it liable as an employer of Everett 

Allen's employees under Title VII. 

Evans further argues that she raised a claim of retaliatory 

failure to hire as a separate issue from her retaliatory discharge 

claim. 3 She contends that the issue was not disposed of by the 

court's summary judgment ruling and that the court's failure to 

address it was error. McDonald's asserts that the retaliatory 

failure to hire claim was not properly before the district court 

because it was not raised in Evans' amended complaint. 

In her amended complaint, Evans contended that McDonald's 

failed to retain her in retaliation for bringing a Title VII action. She characterized the failure to retain as a retaliatory 

discharge, a characterization consistent with her theory that 

McDonald's was her employer. It was not until her response brief 

3 The district properly ruled that Evans' claim for retaliatory 

discharge was disposed of by its conclusion that the defendants 

were not Evans' employers. I R. tab. 118 at 2. 

-6-

Appellate Case: 90-5013 Document: 01019298343 Date Filed: 04/09/1991 Page: 17 
, 

to McDonald's summary judgment motion that Evans characterized her 

retaliation claim as one for failure to hire. 

As a general rule, a plaintiff should not be prevented from 

pursuing a valid claim just because she did not set forth in the 

complaint a theory on which she could recover, "provided always 

that a late shift in the thrust of the case will not prejudice the 

other party in maintaining his defense upon the merits." 

5 c. Wright & A. Miller, Federal Practice & Procedure § 1219 at 

194 (1990); see, ~' Hanson v. Hoffman, 628 F.2d 42, 53 n.11 

(D.C. Cir. 1980). The purpose of "fact pleading," as provided by 

Fed. R. Civ. P. 8(a)(2), is to give the defendant fair notice of 

the claims against him without requiring the plaintiff to have 

every legal theory or fact developed in detail before the 

complaint is filed and the parties have opportunity for discovery. 

See Wright & Miller, §§ 1215, 1219, at 136-147, 188-194. 

We do not believe, however, that the liberalized pleading 

rules permit plaintiffs to wait until the last minute to ascertain 

and refine the theories on which they intend to build their case. 

This practice, if permitted, would waste the parties' resources, 

as well as judicial resources, on discovery aimed at ultimately 

unavailing legal theories and would unfairly surprise defendants, 

requiring the court to grant further time for discovery or 

continuances. 

Evans first characterized the failure to retain as a retaliatory discharge. In fact, her entire case was premised on the 

theory that McDonald's was her employer, and several months of 

discovery centered around the theory. Nearly eight months after 

-7-

Appellate Case: 90-5013 Document: 01019298343 Date Filed: 04/09/1991 Page: 18 
, 

Evans filed her amended complaint, she attempted to change her 

theory, arguing that even if McDonald's was not her employer, it 

ought to be liable for failure to hire. Her new theory was 

presented just two weeks before the scheduled trial date, in her 

response to McDonald's motion for summary judgment. See Gulf Oil 

Trading Co. v. M/V Caribe Mar, 757 F.2d 743, 751-52 (5th Cir. 

1985) (court properly exercised discretion in denying plaintiff's 

motion to amend complaint with completely new theory of recovery 

three weeks before trial because of prejudice to defendants and 

delay in proceedings). Moreover, although Evans' new argument--

based on a failure to hire a new employee in retaliation for that 

prospective employee's prior filing of an EEOC complaint--is one 

that has been recognized by the courts, it is sufficiently unique, 

as applied to the facts of this case, that we believe the late 

shift in theories caused substantial prejudice to McDonald's. The 

district court's opinion does not discuss the issue at all, from 

which we must conclude that it did not regard the issue as 

properly before it. 4 We do not find the district court committed 

4 Essentially the only reported cases against a non-employer that 

have succeeded have been against former employers who urged 

another not to hire the plaintiff because of the plaintiff's suits 

against the former employer. See Sherman v. Burke Contracting, 

Inc., 891 F.2d 1527 (11th Cir.), cert. denied, 111 s. Ct. 353 

(1990); Rutherford v. American Bank of Commerce, 565 F.2d 1162 

(lOth Cir. 1977). In neither of the two reported cases we have 

found involving suit against a prospective employer, Wrenn v. 

Gould, 808 F.2d 493 (6th Cir. 1987), and Fahie v. New York City 

Dep't of Correction, 737 F. Supp. 15 (S.D.N.Y. 1990), did the 

plaintiff succeed on the merits. But see Storey v. City of Sparta 

Police Dep't, 667 F. Supp. 1164 (M.D. Tenn. 1987) (threat to sue 

the prospective employer if not hired). We have seen no case in 

which the plaintiff had unsuccessfully sued a non-employer under 

Title VII, and when that non-employer would not hire the plaintiff 

it was sued for retaliatory failure to hire--the situation before 

us. 

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error in refusing to treat this new claim. See Fisher v. 

Metropolitan Life Ins. Co., 895 F.2d 1073, 1078 (5th Cir. 1990) 

(claim raised not in amended complaint but, rather, in plaintiff's 

response to defendant's motion for summary judgment was not 

properly before district court). 

Finally, Evans contends that McDonald's Corporation bought 

liability for this suit when it purchased Everett Allen's 

franchises. No reading of Evans' first amended complaint supports 

a conclusion that this issue was raised in any manner before her 

response to McDonald's summary judgment motion. For essentially 

the reasons stated above, we hold that the district court did not 

err in failing to consider this issue; it was not properly before 

the district court. See id. at 1078. 

Summary judgment for defendants David McMahan and McDonald's 

Corporation is AFFIRMED. 

Entered for the Court 

James K. Logan 

Circuit Judge 

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