Title: Patterson v. Domino’s Pizza, LLC
Citation: N/A
Docket Number: S204543
State: California
Issuer: California Supreme Court
Date: August 28, 2014

1 
Filed 8/28/14 
 
 
 
IN THE SUPREME COURT OF CALIFORNIA 
 
 
 
TAYLOR PATTERSON, 
) 
 
 
) 
 
Plaintiff and Appellant, 
) 
 
 
) 
S204543 
 
v. 
) 
 
 
) 
Ct.App. 2/6 B235099 
DOMINO‘S PIZZA, LLC, et al., 
) 
 
) 
Ventura County 
 
Defendants and Respondents. ) 
Super. Ct. No. 
 
 
) 
56-2009-00347668-CU-OE-SIM 
 
____________________________________) 
 
Franchising, especially in the fast-food industry, has become a ubiquitous, 
lucrative, and thriving business model.  This contractual arrangement benefits both 
parties.  The franchisor, which sells the right to use its trademark and 
comprehensive business plan, can expand its enterprise while avoiding the risk and 
cost of running its own stores.  The other party, the franchisee, independently 
owns, runs, and staffs the retail outlet that sells goods under the franchisor‘s name.  
By following the standards used by all stores in the same chain, the self-motivated 
franchisee profits from the expertise, goodwill, and reputation of the franchisor. 
In the present case, a male supervisor employed by a franchisee allegedly 
subjected a female subordinate to sexual harassment while they worked together at 
the franchisee‘s pizza store.  The victim, who is the plaintiff herein, sued the 
franchisor, along with the harasser and franchisee.  The plaintiff claimed that 
because the franchisor was the ―employer‖ of persons working for the franchisee, 
2 
and because the franchisee was the ―agent‖ of the franchisor, the latter could be 
held vicariously liable for the harasser‘s alleged breach of statutory and tort law. 
The trial court granted summary judgment for the franchisor on the ground 
the requisite employment and agency relationships did not exist.  The Court of 
Appeal disagreed, and reversed the judgment of the trial court. 
We granted review to address the novel question dividing the lower courts 
in this case:  Does a franchisor stand in an employment or agency relationship 
with the franchisee and its employees for purposes of holding it vicariously liable 
for workplace injuries allegedly inflicted by one employee of a franchisee while 
supervising another employee of the franchisee?  The answer lies in the inherent 
nature of the franchise relationship itself. 
Over the past 50 years, the Courts of Appeal, using traditional ―agency‖ 
terminology, have reached various results on whether a franchisor should be held 
liable for torts committed by a franchisee or its employees in the course of the 
franchisee‘s business.  In analyzing these questions, the appellate courts have 
focused on the degree to which a particular franchisor exercised general ―control‖ 
over the ―means and manner‖ of the franchisee‘s operations. 
Meanwhile, franchising has seen massive growth.  A franchisor, which can 
have thousands of stores located far apart, imposes comprehensive and meticulous 
standards for marketing its trademarked brand and operating its franchises in a 
uniform way.  To this extent, the franchisor controls the enterprise.  However, the 
franchisee retains autonomy as a manager and employer.  It is the franchisee who 
implements the operational standards on a day-to-day basis, hires and fires store 
employees, and regulates workplace behavior. 
Analysis of the franchise relationship for vicarious liability purposes must 
accommodate these contemporary realities.  The imposition and enforcement of a 
uniform marketing and operational plan cannot automatically saddle the franchisor 
3 
with responsibility for employees of the franchisee who injure each other on the 
job.  The contract-based operational division that otherwise exists between the 
franchisor and the franchisee would be violated by holding the franchisor 
accountable for misdeeds committed by employees who are under the direct 
supervision of the franchisee, and over whom the franchisor has no contractual or 
operational control.  It follows that potential liability on the theories pled here 
requires that the franchisor exhibit the traditionally understood characteristics of 
an ―employer‖ or ―principal;‖ i.e., it has retained or assumed a general right of 
control over factors such as hiring, direction, supervision, discipline, discharge, 
and relevant day-to-day aspects of the workplace behavior of the franchisee‘s 
employees.  (See Vernon v. State of California (2004) 116 Cal.App.4th 114, 124 
(Vernon) [considering ―the ‗totality of circumstances‘ that reflect upon the nature 
of the work relationship of the parties‖].) 
Here, the franchisor prescribed standards and procedures involving pizza-
making and delivery, general store operations, and brand image.  These standards 
were vigorously enforced through representatives of the franchisor who inspected 
franchised stores.  However, there was considerable, essentially uncontradicted 
evidence that the franchisee made day-to-day decisions involving the hiring, 
supervision, and disciplining of his employees.  Plaintiff herself testified that after 
the franchisee hired her, she followed his policy, and reported the alleged sexual 
harassment to him.  The franchisee suspended the offender.  Nothing contractually 
required or allowed the franchisor to intrude on this process. 
Plaintiff highlights the franchisee‘s testimony that a representative of the 
franchisor said the harasser should be fired.  But, consistent with the trial court‘s 
ruling below, any inference that this statement represented franchisor ―control‖ 
over discipline for sexual harassment complaints cannot reasonably be drawn from 
the evidence.  The uncontradicted evidence showed that the franchisee imposed 
4 
discipline consistent with his own personnel policies, declined to follow the ad hoc 
advice of the franchisor‘s representative, and neither expected nor sustained any 
sanction for doing so. 
For these reasons, we will reverse the Court of Appeal‘s decision 
overturning the grant of summary judgment in the franchisor‘s favor.  
I.  PROCEDURAL BACKGROUND 
A.  The Parties 
In September 2008, a company named Sui Juris, LLC (Sui Juris or the 
franchisee), acquired an existing Domino‘s pizza franchise in Southern California.  
The franchise agreement was signed for Sui Juris by its sole owner, Daniel Poff 
(Poff).  The other contracting party was Domino‘s Pizza Franchising, LLC, which 
was related to both Domino‘s Pizza, Inc., and Domino‘s Pizza, LLC (collectively, 
Domino‘s or the franchisor). 
When operations began, Sui Juris retained, as its employees, the 17 or 18 
people who already staffed the store.  One of them was Renee Miranda (Miranda), 
an adult male who held the title of assistant manager. 
In November 2008, a young woman named Taylor Patterson (Patterson) 
was hired to serve customers at the Sui Juris store.  Her job soon ended under 
circumstances set forth in the pleadings, which we now describe. 
B.  The Complaint 
In June 2009, Patterson filed this action against Miranda, Sui Juris, and 
Domino‘s.  She alleged the following facts:  Miranda worked as a manager at the 
Sui Juris store.  He sexually harassed her whenever they shared the same shift.  He 
made lewd comments and gestures, and grabbed her breasts and buttocks.  After 
Miranda refused to stop, Patterson reported the problem to her father and to Poff. 
The complaint continued:  Patterson‘s father contacted the police.  He also 
called Domino‘s ―corporate office,‖ and told someone in the human resources 
5 
department about the sexual harassment his daughter had endured at the Sui Juris 
store.  Patterson stayed away from work for one week, and then returned.  She 
soon resigned.  She perceived that her hours were reduced because she had 
reported Miranda‘s misconduct to others. 
The complaint stated several causes of action.  The first three counts 
invoked the Fair Employment and Housing Act (FEHA), and alleged sexual 
harassment, failure to take reasonable steps to avoid harassment, and retaliation 
for reporting harassment.  (See Gov. Code, § 12900 et seq.)1  Otherwise, the 
complaint asserted common law counts for intentional infliction of emotional 
distress, assault and battery, and constructive termination against public policy 
under FEHA.  Compensatory and punitive damages were sought. 
Critical here is Patterson‘s portrayal of the legal relationship between 
Domino‘s and the employees of Sui Juris.  As to all causes of action, the 
complaint maintained that Domino‘s was the ―employer‖ of both Patterson and 
Miranda, and that they were the ―employee[s]‖ of Domino‘s.  Each defendant was 
described as ―the agent, employee, servant and joint venturer‖ of the other 
defendants.  At all relevant times, the defendants purportedly acted ―within the 
course, scope and authority of such agency, employment and joint venture, and 
with the consent and permission of‖ the other defendants.  Also, it was alleged that 
the officers and/or managing agents of every defendant ―ratified and approved‖ all 
actions of the other defendants. 
C.  Summary Judgment Motion 
In November 2010, Domino‘s sought summary judgment, or, alternatively, 
summary adjudication, against Patterson.  Responding to allegations in the 
                                            
1  
All further statutory references are to the Government Code except as 
otherwise stated. 
6 
complaint, Domino‘s argued that it was not an ―employer‖ or ―principal,‖ and 
could not be held vicariously liable for Miranda‘s misconduct as a result.  
Domino‘s acknowledged that it imposed and enforced broad standards for selling 
its trademarked pizza brand.  That way, customers expected and received a similar 
experience each time they patronized any franchised store.  Domino‘s maintained, 
however, that Sui Juris was a separate business run by Poff, and that he selected, 
managed, and disciplined his employees.  Hence, Domino‘s claimed, the internal 
day-to-day control needed for an employment or agency relationship was lacking. 
D.  Evidence Supporting Summary Judgment 
Domino‘s submitted excerpts from its franchise agreement with Sui Juris.  
Domino‘s also provided:  (1) a declaration by Joseph P. Devereaux (Devereaux), 
Domino‘s director of franchise services, (2) excerpts from the deposition of Poff, 
who owned Sui Juris, and (3) excerpts from the deposition of Patterson, the 
plaintiff.  We now review this evidence. 
1.  Franchise Relationship.  According to both Devereaux and Poff, 
Domino‘s and Sui Juris had distinct legal identities and corporate structures.  
Neither business held any ownership or partnership stake in the other, and they 
had no officers or directors in common.  Domino‘s had no access to Sui Juris‘s 
bank accounts.  Sui Juris filed its own tax returns.  It also obtained all necessary 
business licenses and operating permits.  While Sui Juris paid Domino‘s a royalty 
fee and other miscellaneous costs, the two companies did not otherwise share 
profits or losses.  Under the franchise contract, Sui Juris maintained property and 
liability insurance at its own expense. 
2.  Hiring.  The franchise contract stated that Sui Juris was ―solely 
responsible‖ for ―recruiting [and] hiring‖ employees to operate its store.  Those 
persons, the contract said, ―shall be [Sui Juris‘s] employees, and not [Domino‘s] 
agents or employees.‖  Consistent with these terms, Poff testified that he received 
7 
and retained applications directly from job candidates, and that he never sent or 
showed those documents to Domino‘s.  Poff also personally interviewed all 
applicants.  Domino‘s did not participate in any job interviews.  Poff explained 
that he deliberately excluded Domino‘s from the hiring process.  The reason was 
that the decision was his alone to make, and that no input or oversight was 
required on Domino‘s part. 
Patterson‘s employment with Sui Juris reflected the foregoing policy and 
practice.  Patterson, like Poff, testified that in November 2008 she walked into the 
Sui Juris store, and asked for a job application.  She was interviewed by Poff.   In 
Patterson‘s words, Poff hired her ―on the spot.‖ 
3.  Training.  Under the contract, Poff, as Sui Juris‘s sole owner, promised 
to personally undergo training with Domino‘s as a condition of opening and 
operating his store.  Domino‘s reserved the option of requesting supplemental 
training on Poff‘s part at his own expense. 
Otherwise, the contract removed from Domino‘s any right or duty to 
―implement a training program for [Sui Juris‘s] employees,‖ or to ―instruct [them] 
about matters of safety and security in the Store or delivery service area.‖  Poff, in 
turn, agreed to be ―solely responsible‖ for implementing programs to train his 
employees on the legal, safe, and proper performance of their jobs.  Such was the 
case even if Poff obtained ―advice or suggestions‖ from Domino‘s on the matter.  
The contract precluded him from employing untrained or unqualified persons. 
Poff testified that when he first opened the Sui Juris store, he received 
guidance over three days from Claudia Lee (Lee), an ―area leader‖ for Domino‘s.  
She ―did nothing‖ to help him train his employees.  Poff personally trained newly 
hired employees himself.  However, Domino‘s provided an orientation program 
for new employees on the store‘s computer system, i.e., the ―PULSE‖ system.  
Those programs covered pizza-making, store operations, safety and security, and 
8 
driving instructions.  The PULSE training program was accompanied by a 
Domino‘s handbook.2 
Regarding sexual harassment training for his employees, Poff was ―not 
sure‖ that Domino‘s covered this topic in its PULSE programs.  Poff answered 
―no‖ in his deposition when asked if ―anybody from Domino‘s . . . provide[d] 
sexual harassment training to [his] employees.‖ 3 
Instead, Poff implemented his own (i.e., ―my‖) sexual harassment policy.  
Poff explained that his policy involved ―zero tolerance‖ and the ―reasonable 
woman standard.‖  Store managers received such instruction during multiple 
meetings with Poff.  He told them to contact him if an issue or question arose.  
Nonmanagerial employees received some sexual harassment information as well.  
Poff placed his policy on the PULSE system.  In her deposition, Patterson gave 
this additional account:  ―When [Poff] had first hired me, [he said] that it was a big 
thing to him, sexual harassment; and that if it had happened, that he would want 
me to contact him right away.‖ 
                                            
2 
Poff and other witnesses described the PULSE computer system as a 
comprehensive sales and accounting program that Domino‘s required franchisees 
to buy and use in their stores.  Domino‘s could access the system in order to track 
certain sales, such as those involving product promotions and repeat customers.  
The program also contained employee information that franchisees could use to 
prepare work schedules and payroll documents.  
3  
Elsewhere in his deposition (in excerpts that Patterson provided) Poff 
testified that he ―believe[d]‖ he had received sexual harassment training from 
Domino‘s when he first became a franchisee.  However, he could not recall any 
―specifics.‖  As we discuss further below, Patterson also submitted excerpts from 
the deposition of Devereaux, who headed franchise services for Domino‘s.  
Devereaux indicated that new franchisees received sexual harassment training, but 
he did not know what it entailed. 
9 
4.  Supervision.  The franchise contract required the Sui Juris store to ―at 
all times be under the direct, on-premises supervision‖ of Poff.  He agreed to 
function as a full-time ―manager,‖ and not to engage in other business endeavors 
without first obtaining Domino‘s written consent. 
The contract stated that persons who worked in the store were Sui Juris‘s 
employees ―and not [Domino‘s] agents or employees.‖  Some of the managerial 
tasks over which Poff assumed control included ―scheduling for work, 
supervising[,] and paying‖ his employees.  Domino‘s disclaimed any right or duty 
to ―operate the Store‖ or to ―direct [Sui Juris‘s] employees‖ in their jobs.  Those 
functions were made Poff‘s sole responsibility. 
Patterson testified that she was supervised at work either by Poff or by one 
of his managers or assistant managers, including Miranda.  Poff testified that 
Patterson and Miranda were on the payroll of Sui Juris.4 
5.  Alleged harassment and subsequent events.  Testimony by Patterson 
described the following chain of events:  Miranda began sexually harassing 
Patterson at work shortly after Poff hired her.  Two weeks later, she complained to 
her father and to Poff.  Patterson spoke to Poff about the matter on a second 
unspecified occasion.  At that time, according to Patterson, Poff said he was 
―going to fire‖ Miranda.  The police were called.  Miranda was apparently arrested 
and taken into custody. 
                                            
4  
Our record contains a few lines of incomplete testimony about ―writ[ing] 
up‖ employees who violated company policy at the Sui Juris store.  Poff testified 
that he performed this task ―[m]ost of the time,‖ and that Domino‘s never asked 
him to present any writeup to his employees on its behalf.  It is not clear what a 
writeup entailed, what consequences ensued, or who could impose them. 
10 
Poff testified that, in actuality, he ―suspended‖ Miranda ―pending an 
investigation‖ into Patterson‘s sexual harassment complaint.  The results were 
inconclusive, because Poff lacked the resources to satisfactorily complete the task.  
The problem solved itself, Poff explained, when Miranda failed to show up for 
work.  He ―self-terminated,‖ in Poff‘s view.5 
Patterson testified that shortly after the foregoing events occurred, she quit 
her job.  There was one week in which she was scheduled to work only three days, 
rather than four days.  Patterson admitted, however, that she was never told she 
would always work a minimum of four days a week. 
E.  Evidence in Opposition to Summary Judgment 
Patterson disputed Domino‘s claim that it did not control Sui Juris‘s day-to-
day operations, including employment matters.  Hence, she asked the trial court to 
find a triable issue of fact in this regard.  For support, Patterson relied primarily on 
the franchise documents and the role of Domino‘s area leaders. 
1.  The contract.  Patterson submitted the full franchise contract.  It 
contained relevant provisions not included in Domino‘s materials, as follows: 
Sui Juris agreed to sell Domino‘s products at a specific site for a 10-year 
term, and to pay a royalty fee (calculated as a percentage of weekly sales) in 
exchange for the right to use the ―Domino‘s System‖ and related trademarks.  The 
bulk of the contract concerned the following topics:  site construction; store 
refurbishing; equipment and furnishings; menus and pricing; advertising and 
promotions; reports and audits; computer systems and data access; trademark use 
and infringement; company inspections; contract termination; posttermination 
                                            
5  
Poff testified that Miranda later returned and asked for his job back.  He 
denied sexually harassing Patterson.  Poff refused to rehire Miranda. 
11 
rights and procedures; and contract interpretation and enforcement.  The contract 
also required compliance with a separate Managers Reference Guide (the MRG), 
which we describe below. 
The contract described the parties as ―independent contractors,‖ regardless 
of any training or support on Domino‘s part.  Domino‘s was not liable under the 
contract for ―any damages to any person or property arising directly or indirectly 
out of the operation of the Store.‖  The parties agreed that they had no ―principal 
and agent‖ relationship.  Domino‘s disclaimed ―any relationship with [Sui Juris‘s] 
employees,‖ and assumed ―no rights, duties, or responsibilities‖ as to their 
employment.  Other provisions made clear that Sui Juris had no authority ―to act 
for or on [Domino‘s] behalf.‖  
2.  The MRG.  Patterson submitted one section of the MRG.  Most 
provisions were not employment related.6  That said, managers and employees 
new to their jobs were to be trained with programs provided or approved by 
Domino‘s.  Time cards and reports were expected.  Domino‘s delivery drivers 
needed to meet minimum age and experience standards.  Also, because employees 
were required to wear uniforms, the MRG set forth detailed clothing and accessory 
guidelines.  Various grooming and hygiene standards were designed to promote 
                                            
6 
The MRG mostly covered the following matters:  money management and 
security, including limits on workplace talk about cash or sales; customer 
deliveries and driver transportation; refuse disposal; sanitation and safety; food 
ingredients, preparation, and handling; store hours and daily closing procedures; 
phone systems and computer programs; promotional and other interior displays; 
customer payments and complaints; sales marketing and product packaging; leases 
and building construction; exterior and interior signage; utility services and 
kitchen equipment; and store inspections. 
12 
neatness and sanitation.  Employees could not possess or consume alcohol or illicit 
drugs while working or on store premises.  Tobacco use was limited.7 
3.  Poff’s deposition.  Patterson supplemented Domino‘s evidence by 
providing additional excerpts from Poff‘s deposition.  Poff implied that he had 
little choice but to follow the advice of his area leader, Lee.  He felt he always had 
to say ―yes‖ to her, and he did not recall ever ―intentionally‖ rejecting her 
suggestions.  Poff assumed that a franchisee who did not ―play ball‖ with the area 
leader might be ―in jeopardy,‖ ―in trouble,‖ or ―out of business.‖  Poff 
acknowledged, however, that area leaders like Lee simply ―tried to be helpful‖ in 
monitoring implementation of the standards set forth in the contract and the MRG. 
Poff testified that he did not see Lee often because her service area was 
large.8  Other Domino‘s inspectors visited the store four times during the year Poff 
owned it.  He recalled two occasions on which Domino‘s had used unidentified 
(―mystery‖) callers to assess operations. 
Poff acknowledged that he adopted his own personnel policies.  One of 
them was the sexual harassment policy.  Others concerned attendance.  For 
                                            
7  
Patterson submitted other documentary evidence.  Forms from 2008 and 
2009 showed that Domino‘s inspectors had rated the Sui Juris store on customer 
orders, food preparation, product packaging, employee uniforms, and store 
cleanliness.  Also, Domino‘s sent letters in 2009 about contractual problems 
unrelated to Patterson‘s sexual harassment complaint.  Such matters concerned use 
of unapproved products, delivery outside territorial limits, failure to provide 
financial records, and nonpayment of royalties and other fees.  We note that in 
July 2009, after Sui Juris was placed in default, its contract with Domino‘s was 
terminated.  It appears Poff, who owned Sui Juris, then filed for bankruptcy. 
8  
Lee testified in her deposition, which we describe below, that she visited 
Poff‘s store every two weeks while he owned the franchise.  She also placed 
phone orders to check the quality of the food and service. 
13 
example, ―if an employee did not show up and did not call after three times, . . . 
they had voluntarily . . . self-terminated from employment.‖ 
Poff confirmed that Miranda was an assistant manager who supervised 
other employees.  At some unspecified point after Patterson told Poff about 
Miranda‘s sexual advances, Poff relayed the information to Lee.  According to 
Poff, Lee mentioned that Patterson‘s father had called Domino‘s and complained 
about Miranda‘s alleged acts of sexual harassment. 
In discussing the matter with Poff, Lee reportedly said, ―You‘ve got [to] get 
rid of this guy.‖  Poff answered ―no‖ in his deposition when asked whether Lee 
told him ―what was going to happen to you if you didn‘t fire Miranda.‖  Nor could 
he recall any specific implication in her remark.  When asked whether he told Lee 
that he did not intend to fire Miranda, Poff said ―no.‖  The matter became a 
―nonissue‖ when Miranda ―self-terminat[ed].‖ 
Poff further testified that shortly after he first spoke with Lee about 
Patterson‘s complaint, Lee made a brief visit to the Sui Juris store.  Lee expressed 
ongoing interest in the Patterson case.  According to Poff, Lee asked whether he 
had training procedures and materials in place, and whether he would retrain his 
staff.  Lee ―made suggestions‖ in this regard.  Poff testified that he was under 
pressure in running the business and meeting Domino‘s expectations at that time. 
4.  Lee’s deposition.  Patterson submitted excerpts from Lee‘s deposition.  
Lee testified that, in November 2008, when the alleged harassment occurred, she 
monitored 101 Domino‘s franchises for compliance with operational and 
marketing standards.  When sales were low, she recommended changes in pricing 
and staffing levels.  ―But,‖ Lee explained, ―that‘s the franchisee‘s decision.‖ 
Lee described other tasks she performed, all of which prevented harm to 
Domino‘s brand and to its customers and employees.  Lee would train franchisees 
when their doors first opened or when a new product was launched.  Lee testified 
14 
that, while managers employed by the franchisees sometimes attended these 
sessions, the franchisees were responsible for training their employees.  During 
regular store inspections, Lee would coach franchisees and employees on 
problems she saw with pizza-making, food safety, product packaging, store 
cleanliness, employee hygiene, customer orders, consumer complaints, and 
delivery procedures.  Sometimes, franchisees were asked to temporarily close 
stores that had imminent safety hazards, like poor refrigeration or fire damage.  
Other times, Lee recommended that Domino‘s send a notice of default when stores 
did not follow procedures that were contractually required. 
Regarding employees, if one of them was rude in Lee‘s presence, she 
would ask the franchisee to correct the problem.  Lee testified that she was not 
involved in the hiring process.  Nor was it her job to fire employees or demand 
that they be fired.  On rare occasions, Lee encountered an employee whose 
performance was so deficient that it was hurting Domino‘s brand or endangering 
the franchise.  Lee, at most, ―recommended‖ or ―suggested‖ to the franchisee that 
such employee might not be the right person for the job.9 
                                            
9  
Lee was asked about a disciplinary matter at the Sui Juris store involving a 
manager named Dave Knight.  Lee testified that she visited the store and saw that 
Knight was using Domino‘s bags to deliver non-Domino‘s food outside Poff‘s 
service area — acts which involved serious violations of Domino‘s rules.  Knight 
also did not follow general operating procedures when he ran the store in Poff‘s 
absence.  Lee told Poff that such conduct was hurting the franchise, and risked a 
contractual default.  According to Lee, she did not tell Poff to fire Knight.  Rather, 
she recommended that Knight not be placed ―in charge of the store,‖ or ―left alone 
running the shift.‖  Lee and Poff developed written guidelines, or an ―action plan,‖ 
setting forth the steps Poff would take to remedy Knight‘s misdeeds, including a 
description of the discipline Poff imposed upon him.  Consistent with Lee‘s 
account, Poff testified that he ultimately fired Knight, i.e., ―pull[ed] the trigger on 
the termination.‖  Poff never testified that Lee told him to do so. 
15 
5.  Devereaux’s deposition.  Patterson provided excerpts from 
Devereaux‘s deposition to supplement his declaration, which Domino‘s had 
included in its moving papers.  Devereaux testified as follows:  Domino‘s had 
9,000 stores worldwide, only 500 of which were company owned.  Domino‘s 
human resources department offered no guidance to franchisees on handling 
personnel issues.  If a franchisee asked Domino‘s for such advice, the company 
would recommend that the franchisee resolve the situation himself or retain 
counsel to do so.  A similar response was expected of any area leader asked to 
answer a sexual harassment question posed by a franchisee.  Devereaux suggested 
that area leaders were neither compelled nor trained to handle such matters.  
Devereaux indicated that Domino‘s had no procedure for processing sexual 
harassment complaints by employees of a franchisee.  He testified that Domino‘s 
had a ―1-800‖ telephone number for customer complaints about products and 
services.  Devereaux understood that Patterson‘s father had called the customer 
complaint line to report the alleged sexual harassment of his daughter.10 
Devereaux recalled one instance in which the franchisee himself (not an 
employee of the franchisee) had been personally accused of sexual harassment.  
That case was resolved when the franchisee was placed in default and required to 
undergo sexual harassment training.  Devereaux could not rule out the possibility 
                                            
10  
Devereaux testified that there was a procedure by which both franchise 
owners (e.g., Poff) and area leaders (e.g., Lee) received e-mails generated by calls 
to the 1-800 customer complaint line.  According to both Devereaux and Lee, the 
area leader would then ask the franchise owner whether and how the matter 
reflected in the e-mail was handled.  Lee further testified that serious matters were 
relayed to her by telephone, apparently on an ad hoc basis.  For instance, she 
recalled that ―someone‖ from Domino‘s called and said Miranda ―was going to be 
arrested.‖  She was ―not sure exactly‖ how such information came to Domino‘s 
attention, and she did not know if ―someone called the customer care line.‖ 
 
16 
that a franchisee might undergo sexual harassment training if someone working in 
his store was accused of such misconduct.  
F.  Lower Court Rulings11 
After a hearing, the trial court issued a lengthy statement of decision 
granting summary judgment for Domino‘s on all counts.  The court determined 
that Domino‘s did not control day-to-day operations or employment practices such 
that Sui Juris was an agent of Domino‘s, or that Miranda was an employee of 
Domino‘s.  In the court‘s view, Domino‘s operating standards protected brand 
identity and integrity, and excluded hiring, firing, and other personnel matters.  
The court found no significance in Lee‘s statement that Poff should fire Miranda, 
because it was an offhand remark that Poff ignored.  The trial court concluded, as 
a matter of law, that Domino‘s was not vicariously liable on any claim alleged in 
the complaint.  Patterson‘s action against Domino‘s was dismissed.  
On appeal, the court applied the same basic principles as did the trial court, 
but reached the opposite result.  According to the Court of Appeal, reasonable 
inferences could be drawn from the franchise contract and the MRG that Sui Juris 
lacked managerial independence.  The court listed many of the standards and 
procedures imposed by Domino‘s, and noted that they concerned far more than 
food preparation.  The Court of Appeal also found evidence that Domino‘s 
meddled in Sui Juris‘s employment decisions.  On this score, the court emphasized 
Poff‘s testimony about following Lee‘s instructions, particularly her reference to 
firing Miranda.  Hence, faced with Domino‘s contrary evidence (which it never 
                                            
11 
We note that Domino‘s replied to Patterson‘s opposition to summary 
judgment.  Domino‘s repeated its prior arguments that the ―employer‖ and 
―agency‖ elements of Patterson‘s claims were missing as a matter of law.  
Domino‘s also objected to Patterson‘s evidence in certain respects.  Most of these 
objections were overruled.  None is relevant here. 
17 
described), the Court of Appeal found a triable issue of fact on Domino‘s role as 
an ―employer‖ or ―principal‖ for vicarious liability purposes.  The judgment that 
had been entered in Domino‘s favor was reversed. 
We granted Domino‘s petition for review.  The issue was limited to 
determining a franchisor‘s potential vicarious liability for wrongful acts 
committed by one employee of a franchisee while supervising another employee 
of the franchisee. 
II.  DISCUSSION12 
A.  Special Features of the Franchise Relationship 
Companies can market goods and services in more than one way.  In an 
integrated method of distribution, the company uses its own employees and other 
assets to operate chain or branch stores.  In doing so, it reaps the full benefits (e.g., 
maximizing profits) and bears the full burdens (e.g., investing capital and risking 
liability) of running a business.  (Killion, Franchisor Vicarious Liability — The 
Proverbial Assault on the Citadel (2005) 24 Franchise L.J. 162, 165 (Citadel); see 
Shelley & Morton, ―Control‖ in Franchising and the Common Law (2000) 19 
Franchise L.J. 119, 121 (Control) [noting huge cost of company-owned stores].)  
Franchising is different.  (See Beck v. Arthur Murray, Inc. (1966) 245 
Cal.App.2d 976, 981.)  It is a distribution method that has existed in this country 
in one form or another for over 150 years.  (Obermeyer, Resolving the Catch 22: 
Franchisor Vicarious Liability for Employee Sexual Harassment Claims Against 
                                            
12  
Joint amicus curiae briefs have been filed on behalf of Domino‘s by (1) the 
International Franchise Association and the California Restaurant Association, 
(2) the Employers Group, the California Employment Law Council, and the 
California Chamber of Commerce, (3) the Automobile Club of Southern 
California, and (4) ―Eleven Health Club Franchisees.‖  An amicus curiae brief has 
been filed on Patterson‘s behalf by the Consumer Attorneys of California. 
18 
Franchisees (2007) 40 Ind. L.Rev. 611, 614-615 (Catch 22) [describing ―product 
distribution‖ franchises that began in the mid-1800‘s when farm and sewing 
machine manufacturers sold goods to dealers who resold them to the public].) 
However, it was not until the 1950‘s that a form of franchising called the 
―business format‖ model began to emerge.  (Catch 22, supra, 40 Ind. L.Rev. 611, 
615-616.)  This model (which we describe below) is used heavily, but not 
exclusively, in the fast food industry.  The rise of business format franchising has 
been attributed to the post-World War II growth in population, personal income, 
retail spending, and automobile use.  (Killion, The Modern Myth of the Vulnerable 
Franchisee: The Case for a More Balanced View of the Franchisor-Franchisee 
Relationship (2008) 28 Franchise L.J. 23, 24 (Modern Myth).) 
Today, the economic effects of franchising are profound.  Annually, this 
sector of the economy, including the fast food industry, employs millions of 
people, carries payrolls in the billions of dollars, and generates trillions of dollars 
in total sales.13 
Under the business format model, the franchisee pays royalties and fees for 
the right to sell products or services under the franchisor‘s name and trademark.  
                                            
13  
In 2010, the United States Census Bureau released its first-ever 
comprehensive report for franchised business.  The report is based on the 2007 
Economic Census — a survey that is conducted every five years.  Franchises 
accounted for 10.5 percent of businesses with paid employees in the 295 industries 
in which data was collected.  Franchised businesses also accounted for almost $1.3 
trillion out of the $7.7 trillion in total sales for these industries, $153.7 billion out 
of the $1.6 trillion in total payroll, and 7.9 million workers out of a total workforce 
of 59 million.  (U.S. Census Bureau, ―Census Bureau‘s First Release of 
Comprehensive Franchise Data‖ (Sept. 14, 2010) <https://www.census.gov/ 
newsroom/releases/archives/economic_census/cb10-141.html> [news release] [as 
of August 28, 2014]; U.S. Census Bureau, ―2007 Economic Census Franchise 
Statistics‖  
[selected graphs] [as of August 28, 2014].) 
19 
In the process, the franchisee also acquires a business plan, which the franchisor 
has crafted for all of its stores.  (Catch 22, supra, 40 Ind. L.Rev. 611, 615-616.)  
This business plan requires the franchisee to follow a system of standards and 
procedures.  A long list of marketing, production, operational, and administrative 
areas is typically involved.  (See Control, supra, 19 Franchise L.J. 119, 121.)  The 
franchisor‘s system can take the form of printed manuals, training programs, 
advertising services, and managerial support, among other things.  (Catch 22, 
supra, 40 Ind. L.Rev. 611, 616.)14 
The business format arrangement allows the franchisor to raise capital and 
grow its business, while shifting the burden of running local stores to the 
franchisee.  (Citadel, supra, 24 Franchise L.J. 162, 165.)  The systemwide 
standards and controls provide a means of protecting the trademarked brand at 
great distances.  (King, Limiting the Vicarious Liability of Franchisors for the 
Torts of their Franchisees (2005) 62 Wash. & Lee L.Rev. 417, 423 (Vicarious 
Liability).)  The goal — which benefits both parties to the contract — is to build 
and keep customer trust by ensuring consistency and uniformity in the quality of 
goods and services, the dress of franchise employees, and the design of the stores 
themselves.  (Blair & Lafontaine, Understanding the Economics of Franchising 
                                            
14  
(See Corp. Code, § 31005, subd. (a) [defining a ― ‗[f]ranchise‘ ‖ under the 
Franchise Investment Law, which regulates the offer and sale of franchises, as a 
contractual right granted to a franchisee, in exchange for a franchise fee, to engage 
in a business which offers, sells, or distributes goods or services, and which is 
operated under a marketing plan or system prescribed in substantial part by a 
franchisor and substantially associated with the franchisor‘s trademark]; see also 
Bus. & Prof. Code, § 20001, subd. (a) [setting forth a similar definition of 
― ‗franchise‘ ‖ in the California Franchise Relations Act, which regulates the 
renewal, transfer, and termination of franchises]; see, generally, Gentis v. 
Safeguard Business Systems, Inc. (1998) 60 Cal.App.4th 1294, 1297-1301.) 
20 
and the Laws That Regulate It (2006) 26 Franchise L.J. 55, 59-60; Control, supra, 
19 Franchise L.J. 119, 121.)15 
The franchisee is often an entrepreneurial individual who is willing to 
invest his time and money, and to assume the risk of loss, in order to own and 
profit from his own business.  (Modern Myth, supra, 28 Franchise L.J. 23, 28.)  In 
the typical arrangement, the franchisee decides who will work as his employees, 
and controls day-to-day operations in his store.  (Inadvertent Employer, supra, 27 
Franchise L.J. 224.)  The franchise arrangement puts the franchisee in a better 
position than other small businesses.  (Catch 22, supra, 40 Ind. L.Rev. 611, 617.)  
It gives him access to resources he otherwise would not have, including the 
uniform operating system itself.  (Control, supra, 19 Franchise L.J. 119, 121.)16 
B.  Analysis of the Arguments and the Law 
Patterson‘s allegations against Domino‘s under FEHA center on the 
provision making it unlawful ―[f]or an employer, . . . because of . . . sex, . . . to 
                                            
15  
Federal trademark law plays some role in this process.  (See Fournaris, The 
Inadvertent Employer: Legal and Business Risks of Employment Determinations 
to Franchise Systems (2008) 27 Franchise L.J. 224 (Inadvertent Employer) [stating 
that federal law ―obligates a licensor of trademarks, such as a franchisor, to protect 
the integrity of its registered and unregistered marks by monitoring their use, as 
well as the quality of the goods and services bearing such marks‖]; Vicarious 
Liability, supra, 62 Wash. & Lee L.Rev. 417, 468 [noting trademark may be 
deemed ―abandoned‖ under federal law if licensor fails to exercise sufficient 
control over its use by licensee]; see also, 15 U.S.C. § 1127 [defining when 
trademark is deemed ―abandoned‖]; 1 Browne, Cal. Business Litigation 
(Cont.Ed.Bar 2014) Trademarks, § 6.128, pp. 6-87 to 6-90 [discussing defense of 
―abandonment‖ in trademark infringement suits].) 
16  
Domino‘s franchisees are known to be particularly well motivated.  (See 
Catch 22, supra, 40 Ind. L.Rev. 611, 616, fn. 45.)  According to Devereaux, the 
company has an ―internal‖ selection system.  Most of its franchisees have been the 
manager of a Domino‘s pizza store for at least one year, and have completed 
training as both a manager and a franchisee. 
21 
harass an employee.‖  (§ 12940, subd. (j)(1), italics added; see id., subds. (h) [an 
―employer‖ cannot retaliate against any person who has complained about 
unlawful sexual harassment], and (k) [an ―employer‖ must take all reasonable 
steps necessary to prevent unlawful sexual harassment]; see also id. subd. 
(j)(1)(4)(A) [an ―employer‖ includes ―any person regularly employing one or more 
persons‖].)  Also, ―under the FEHA, an employer is strictly liable for all acts of 
sexual harassment by a supervisor.‖  (State Dept. of Health Services v. Superior 
Court (2003) 31 Cal.4th 1026, 1042 (State Dept.), italics added and omitted; see 
id. at p. 1041, fn. 3 [harassment must occur while supervisor was acting in such 
capacity and cannot be unconnected with employment].)  Broadly speaking, 
FEHA seeks to prevent workplace sexual harassment through the employer‘s 
adoption, use, and enforcement of sexual harassment policies.  (State Dept., supra, 
at pp. 1034 [employers are ―the first line of defense against sexual harassment in 
the workplace‖], 1044 [an employer is not liable for sexual harassment damages 
the employee reasonably could have avoided by using policies already in place].) 
Likewise, the venerable respondeat superior rule provides that ―an 
employer may be held vicariously liable for torts committed by an employee 
within the scope of employment.‖  (Mary M. v. City of Los Angeles (1991) 54 
Cal.3d 202, 208, italics added.)  The doctrine contravenes the general rule of tort 
liability based on fault.  (Ibid.)  Under certain circumstances, the employer may be 
subject to this form of vicarious liability even for an employee‘s willful, 
malicious, and criminal conduct.  (Lisa M. v. Henry Mayo Newhall Memorial 
Hospital (1995) 12 Cal.4th 291, 296-299.)  Three policy justifications for the 
respondeat superior doctrine have been cited — prevention, compensation, and 
risk allocation.  They do not always apply.  (See id. at pp. 304-305 [concluding 
that such aims would not necessarily be served by holding hospital vicariously 
liable for sexual assault by a technician against a patient during ultrasound test]; 
22 
cf. Farmers Ins. Group v. County of Santa Clara (1995) 11 Cal.4th 992, 1003-
1019 [public entity need not indemnify employee under Government Claims Act 
in § 825 et seq. because his liability under FEHA for sexual harassment of 
coworkers was outside scope of employment].)  
We know of no decision by a California court addressing a franchisor‘s 
statutory or common law liability under FEHA for sexual harassment claims made 
by one employee of a franchisee against another employee (or supervisor) of the 
franchisee.  Nor has this court decided whether a franchisor may be considered an 
―employer‖ who is vicariously liable for torts committed by someone working for 
the franchisee. 
Against this backdrop, the parties debate here, as they did in the courts 
below, the significance of certain Court of Appeal cases that have considered 
whether a franchisee was the ―agent‖ of the franchisor for purposes of 
compensating a nonemployee for actionable harm caused by the franchisee.  
According to Patterson, the agency principles set forth in these decisions support 
her claim that, because business-format franchisors wield detailed control over 
their franchisees‘ general operations, liability for personal harm sustained in the 
course of a franchisee‘s business should be borne by the franchisor.  On the other 
hand, Domino‘s suggests that too literal an application of the traditional ―agency‖ 
approach ignores the realities of modern franchising, which impose a meaningful 
division of autonomous authority between franchisor and franchisee.  Domino‘s 
claims the critical factor is whether the franchisor had day-to-day control over the 
specific ―instrumentality‖ that caused the alleged harm — here, sexual harassment 
of one employee of the franchisee by another.  We now review the relevant law. 
One early California decision addressing the allocation of legal liability 
between franchisor and franchisee is Nichols v. Arthur Murray, Inc. (1967) 248 
Cal.App.2d 610 (Nichols).  In Nichols, the plaintiff was a customer who had 
23 
signed contracts with the franchisee, a dance studio, and had paid in advance for 
lessons she never received.  The Court of Appeal found sufficient evidence to 
support the trial court‘s ruling that the franchisor was responsible for the 
contractual obligations incurred by its franchisee.  Relying heavily on much older 
decisions of this court, none of which concerned franchising, the Nichols court 
observed that ―[a]n undisclosed principal is liable for the contractual obligations 
incurred by his agent in the course of the agency.‖  (Id. at p. 612, citing Shamlian 
v. Wells (1925) 197 Cal. 716, 721; Geary St. etc. R. R. Co. v. Rolph (1922) 189 
Cal. 59, 64; see Hulsman v. Ireland (1928) 205 Cal. 345, 352.) 
The Court of Appeal in Nichols identified the ―right to control‖ as a 
significant factor in defining an agency relationship.  (Nichols, supra, 248 
Cal.App.2d 610, 613.)  No express definition of ―control‖ was given.  However, 
the Nichols court cited various cases of this court (ibid.) for the basic proposition 
that an agency relationship exists where the principal dictates, not just the desired 
result of the enterprise, but also ―the manner and means‖ by which such result is 
achieved.  (City of Los Angeles v. Vaughn (1961) 55 Cal.2d 198, 201; see Malloy 
v. Fong (1951) 37 Cal.2d 356, 370; Burlingham v. Gray (1943) 22 Cal.2d 87, 94, 
99-100; Robinson v. George (1940) 16 Cal.2d 238, 243-244.) 
Analyzing the record before it, the Court of Appeal in Nichols rejected the 
franchisor‘s claim that the parties‘ contract was narrowly tailored to protect the 
trade name under which the business operated.  (See Nichols, supra, 
248 Cal.App.2d 610, 613.)  Nor were the controls retained by the franchisor 
necessarily limited to protecting its trade name, professional methods, customer 
goodwill, or commercial image.  (Id. at p. 615.)  Rather, much like the trial court 
there, the appellate court in Nichols concluded that the franchisor retained 
complete control over most areas of the business, and deprived the franchisee of 
24 
any independence in managing the ― ‗day to day details of [its] operation.‘ ‖  (Id. 
at p. 614; see id. at pp. 615-617.) 
In particular, the franchisor retained the right to control the employment of 
all persons working in any capacity for the franchisee; to decide matters related to 
studio location, decoration, and advertisement; to set minimum tuition rates and 
select the institution handling student financing; to make student refunds and 
charge those amounts to the franchisee; to settle and pay all claims against the 
franchisor arising out of the operation of the business; to reimburse itself for the 
payment of any refunds, claims, or related litigation costs from a fund consisting 
of weekly payments by the franchisee; to invest the proceeds from this fund and 
pay the franchisee only such portion of the income as the franchisor saw fit; to 
dictate the manner in which unused dancing lessons would be honored among 
franchisees; and to require the franchisee to provide records on accounting, 
insurance, and tax matters.  The contract also contained a broad provision 
requiring the franchisee to run the studio according to ― ‗the general policies of the 
[franchisor] as established from time to time,‘ ‖ and permitting immediate 
cancellation for failure to maintain such policies.  (Nichols, supra, 248 Cal.App.2d 
610, 615.)  Such pervasive controls made the franchisor the party responsible for 
the franchisee‘s contractual obligations towards the plaintiff.  (Id. at p. 617.)17 
                                            
17  
(Accord, Holland v. Nelson (1970) 5 Cal.App.3d 308, 313 [upholding trial 
court finding that agency relationship existed between franchisor, Arthur Murray, 
Inc., and its franchisee, under circumstances similar to those present in Nichols, 
supra, 248 Cal.App.2d 610]; Porter v. Arthur Murray, Inc. (1967) 249 Cal.App.2d 
410, 420-421 [similar conclusion against same franchisor]; see People v. JTH Tax, 
Inc. (2013) 212 Cal.App.4th 1219, 1243-1247 [finding sufficient evidence to 
support trial court judgment that franchisor, a tax and loan service company, was 
vicariously liable for its franchisees‘ illegal advertising]; Kuchta v. Allied Builders 
Corp. (1971) 21 Cal.App.3d 541, 546-547 [finding sufficient evidence to support 
 
(footnote continued on next page) 
25 
Other Court of Appeal decisions, however, have since declined to impute to 
franchisors the harm inflicted on the public by their franchisees.  These courts 
reasoned that the franchisors there at issue lacked sufficient control of their 
franchisees‘ day-to-day operations, including employment matters.  (See Kaplan v. 
Coldwell Banker Residential Affiliates, Inc. (1997) 59 Cal.App.4th 741, 745-746 
[upholding summary judgment for real estate brokerage company insofar as it was 
not liable on a ―true agency‖ theory for fraud a real estate broker committed 
against his client where the broker owned and operated the franchise, hired and 
fired employees, and set wages and office hours, among other things];18 Weiss v. 
Chevron, U.S.A., Inc. (1988) 204 Cal.App.3d 1094, 1100 [upholding summary 
judgment for oil company on ground it was not liable on agency theory for a 
vehicle crash caused by a service station employee, where station operated as an 
independent business whose employees were not hired, supervised, or fired by oil 
company]; Wickham v. Southland Corp. (1985) 168 Cal.App.3d 49, 54 [finding 
sufficient evidence to support jury verdict that franchisor was not liable on agency 
grounds for franchisee‘s sale of liquor to intoxicated minor who caused fatal crash 
                                                                                                                                                       
 
(footnote continued from previous page) 
 
jury verdict that franchisor, a building company, was vicariously liable to plaintiff 
homeowners for fraud and breach of contract by its franchisee, a contractor].)  
18  
Elsewhere in its discussion, the Court of Appeal in Kaplan v. Coldwell 
Banker Residential Affiliates, Inc., supra, 59 Cal.App.4th 741, concluded that a 
triable issue of fact existed on the entirely distinct question whether the franchisee 
was an ―ostensible agent‖ of the franchisor.  (Id. at p. 748.)  ― ‗Liability of the 
principal for the acts of an ostensible agent rests on the doctrine of ―estoppel,‖ the 
essential elements of which are representations made by the principal, justifiable 
reliance by a third party, and a change of position from such reliance resulting in 
injury.‘ ‖  (Id. at p. 747)  There is no issue of ostensible agency in the present case. 
26 
where franchisee hired and fired employees, set and paid their wages, and directed 
their work, among other things].) 
One of the more recent cases analyzing franchising in agency terms is 
Cislaw v. Southland Corp. (1992) 4 Cal.App.4th 1284 (Cislaw).  There, the 
parents of a teenage boy filed a wrongful death action against Southland 
Corporation (Southland), which owned the 7-Eleven trademark and was the 
franchisor of 7-Eleven stores in California.  The plaintiffs claimed their son died 
after using clove cigarettes sold at a 7-Eleven franchise owned by the Trujillos.  
The complaint stated tort and breach of warranty claims.  Southland sought 
summary judgment asserting, inter alia, that it had no vicarious liability for the 
Trujillos‘ conduct because, as franchisees, they were independent contractors who 
had no agency or other relationship with Southland over which it had control.  
Based on the franchise contract, and the declarations of Mrs. Trujillo and a 
Southland employee, the trial court granted summary judgment for Southland.  (Id. 
at p. 1287.) 
On appeal, the court in Cislaw relied on the few available California 
decisions to define the effect of franchise relationships on third parties.  The court 
stated the law as follows:  ―The general rule is where a franchise agreement gives 
the franchisor the right of complete or substantial control over the franchisee, an 
agency relationship exists.  [Citation.]  ‗[I]t is the right to control the means and 
manner in which the result is achieved that is significant in determining whether a 
principal-agency relationship exists.‘ ‖  (Cislaw, supra, 4 Cal.App.4th 1284, 
1288.)  The court observed, however, that ―the franchisor‘s interest in the 
reputation of its entire system allows it to exercise certain controls over the 
enterprise without running the risk of transforming its independent contractor 
franchisee into an agent.‖  (Id. at p. 1292.)  Such interests were identified as the 
protection of ―trademark, trade name, and goodwill.‖  (Id. at pp. 1295, 1296.) 
27 
The court in Cislaw determined that the evidence showed no agency 
relationship in which the franchisor had the requisite control over the franchisee.  
At the outset, the court observed that the Trujillos bought the right to use the 7-
Eleven name in exchange for a percentage of net sales.  The Trujillos were 
contractually required to undergo training; keep the store clean; maintain the 
equipment; carry an inventory of a ― ‗type, quality, quantity and variety‘ ‖ that 
reflected the 7-Eleven image; operate the store at certain times; make daily 
deposits into a designated account; provide purchase and sales records; and make 
the books available for inspection.  (Cislaw, supra, 4 Cal.App.4th 1284, 1294.) 
Nevertheless, the Cislaw court concluded that Southland did not possess the 
―all-important right to control the means and manner‖ in which the store operated 
on a day-to-day basis.  (Cislaw, supra, 4 Cal.App.4th 1284, 1295.)  First, the 
Trujillos made all inventory decisions.  The contract stated that they were not 
required to use certain vendors, to purchase merchandise recommended by 7-
Eleven, or to sell merchandise at prices suggested by 7-Eleven.  Consistent with 
these terms, the evidence showed that the Trujillos alone decided to sell the clove 
cigarettes that allegedly killed the plaintiffs‘ son.  Southland did not recommend 
the sale of this product to the Trujillos or advertise it to the public.  Nor could 
Southland block the sale of clove cigarettes at the Trujillos‘ store.  (Id. at 
pp. 1293-1294.) 
Second, under the terms of the contract, the Trujillos made all employment 
decisions in their store.  In other words, they had the sole right to employ and 
discharge staff as they saw fit.  Such persons were deemed to be the employees of 
the Trujillos, not of Southland.  In a related vein, the contract gave the Trujillos 
full responsibility for the conduct of their employees, including the power to 
supervise, discipline, and compensate them, and to arrange their work schedules.  
28 
(Cislaw, supra, 4 Cal.App.4th 1284, 1294.)  In fact, the Trujillos handled 
personnel matters with no input or oversight by Southland.  (Id. at p. 1293.) 
Third, and in more general terms, the contract in Cislaw described the 
Trujillos as ―independent contractors‖ who controlled ― ‗the manner and means‘ ‖ 
by which the store operated.  (Cislaw, supra, 4 Cal.App.4th 1284, 1294.)  The 
Trujillos paid all operating expenses.  (Id. at p. 1293.)  Absent a material breach of 
contract, Southland could not terminate the contract — evidence the Cislaw court 
deemed significant in determining that an independent contractor relationship was 
in fact created by the parties.  (Id. at p. 1296.)  In sum, the court found, as a matter 
of law, that no agency relationship existed between the franchisor and franchisee.  
Accordingly, it held that summary judgment had properly been entered against the 
plaintiffs on vicarious liability grounds.  (Id. at p. 1297.) 
Patterson contends, based on the foregoing principles and authorities, that 
operating systems like the one used by Domino‘s protect far more than trademark, 
trade name, and goodwill, and deprive franchisees of the means and manner by 
which to assert managerial control.  Like the instant Court of Appeal, she reasons 
that the degree of control exercised by franchisors like Domino‘s makes each 
franchisee the agent of the franchisor for all business purposes, and renders each 
employee of the franchisee an employee of the franchisor in vicarious liability 
terms.19  We disagree. 
                                            
19  
We note that the Court of Appeal opinion in this case reached a result at 
odds with the apparent majority of decisions in other states which have framed the 
issue in analogous terms.  These sister-state courts have declined on summary 
judgment to find an agency or employment relationship that would support a 
vicarious liability claim against a franchisor.  A few of them involve sexual 
misconduct in the workplace.  (See, e.g., Kennedy v. Western Sizzlin Corp. (Ala. 
2003) 857 So.2d 71, 77 [franchisee sexually harassed employees in his restaurant]; 
D.L.S. v. Maybin (Wash.Ct.App. 2005) 121 P.3d 1210, 1212-1213 [assistant 
 
(footnote continued on next page) 
29 
At the outset, we observe, as Domino‘s suggests, that no prior California 
decision has faced a modern business-format system operating on a grand scale 
while allocating control along a fine contractual line.  In Nichols, supra, 248 
Cal.App.2d 610, for instance, the franchise contract left virtually nothing in the 
franchisee‘s hands.  Conversely, the franchisee possessed almost all operational 
control in Cislaw, supra, 4 Cal.App.4th 1284.  We conclude as follows: 
The ―means and manner‖ test generally used by the Courts of Appeal 
cannot stand for the proposition that a comprehensive operating system alone 
constitutes the ―control‖ needed to support vicarious liability claims like those 
raised here.  As noted, a franchise contract consists of standards, procedures, and 
requirements that regulate each store for the benefit of both parties.  This approach 
                                                                                                                                                       
 
(footnote continued from previous page) 
 
manager of McDonald‘s engaged in sexual relationship with teenage coworker]; 
J.M.L. ex rel. T.G. v. A.M.P. (N.J.Super.Ct.App.Div. 2005) 877 A.2d 291, 296-297 
[franchisee engaged in sexual relationship with underage girl who worked in his 
karate studio].)  Different wrongful acts by franchisee employees appear in other 
pro-franchisor decisions resolved before trial in other states.  (See, e.g., Rainey v. 
Langen (Me. 2010) 998 A.2d 342, 346-351 [vehicle collision]; McLaughlin v. 
Chicken Delight, Inc. (Conn. 1973) 321 A.2d 456, 459-460 [vehicle collision]; 
Foster v. Steed (Utah 1967) 432 P.2d 60, 62-63 [service station accident]; 
Parmenter v. J & B Enterprises, Inc. (Miss.Ct.App. 2012) 99 So.3d 207, 213-215 
[assault]; Ellison v. Burger King Corp. (Ga.Ct.App. 2008) 670 S.E.2d 469, 475 
[battery]; Martinez v. Higher Powered Pizza, Inc. (N.Y.App.Div. 2007) 43 A.D.3d 
670, 671-672 [vehicle collision]; Gabler v. Holder and Smith, Inc. (Okla.Civ.App. 
2000) 11 P.3d 1269, 1274 [breach of contract]; Smith v. Foodmaker, Inc. 
(Tex.App. 1996) 928 S.W.2d 683, 688 [murder]; Little v. Howard Johnson Co. 
(Mich.Ct.App. 1990) 455 N.W.2d 390, 393-394 [slip and fall].)  It appears fewer 
out-of-state decisions have reached a contrary result.  (See, e.g., Miller v. 
McDonald’s Corp. (Or.Ct.App. 1997) 945 P.2d 1107; Balderas v. Howe 
(Mo.Ct.App. 1995) 891 S.W.2d 871; Parker v. Domino’s Pizza, Inc. 
(Fla.Dist.Ct.App. 1993) 629 So.2d 1026.) 
30 
minimizes chain-wide variations that can affect product quality, customer service, 
trade name, business methods, public reputation, and commercial image.20 
More to the point, there are sound and legitimate reasons for business 
format contracts like the present one to allocate local personnel issues almost 
exclusively to the franchisee.  As we have explained, franchisees are owner-
operators who hold a personal and financial stake in the business.  A major 
incentive is the franchisee‘s right to hire the people who work for him, and to 
oversee their performance each day.  A franchisor enters this arena, and becomes 
potentially liable for actions of the franchisee‘s employees, only if it has retained 
or assumed a general right of control over factors such as hiring, direction, 
supervision, discipline, discharge, and relevant day-to-day aspects of the  
                                            
20  
(See generally Citadel, supra, 24 Franchise L.J. 162, 164 [noting that the 
problem with applying the traditional agency model to determine vicarious 
liability in the franchising context is that franchising is ―all about controls‖]; 
Control, supra, 19 Franchise L.J. 119, 120 [calling for a clear distinction between 
―two fundamentally different concepts of control‖ — the control implicit in the 
franchise relationship, which should not necessarily warrant vicarious liability, 
and day-to-day operational control, which might warrant vicarious liability]; 
Flynn, The Law of Franchisor Vicarious Liability: A Critique (1993) 1993 Colum. 
Bus. L.Rev. 89, 91 [observing that the traditional agency model does not work 
well in determining the vicarious liability of a franchisor because there must be 
some franchisor control ―over the means of performance‖]; Laufer & Gurnick, 
Minimizing Vicarious Liability of Franchisors for Acts of Their Franchisees 
(1987) 6 Franchise L.J. No. 4, 3 (Minimizing) [maintaining that the ―control 
required for a franchise to exist is not inherently sufficient to establish an actual 
agency‖].) 
31 
workplace behavior of the franchisee‘s employees.21  Any other guiding principle 
would disrupt the franchise relationship.22 
Courts in other states have endeavored to apply their own standards under 
analogous circumstances.  As in the present case, these courts were faced with 
applying traditional vicarious liability principles involving the extent of the 
franchisor‘s control over the franchisee‘s day-to-day operations.  Reaching pretrial 
results favoring the franchisors, these out-of-state courts declined to rely on the 
uniform operating standards inherent in franchising to establish an agency or 
employment relationship between the franchisor and the franchisee and its 
                                            
21  
Thus, the mere fact that the franchisor has reserved the right to require or 
suggest uniform workplace standards intended to protect its brand, and the quality 
of customer service, at its franchised locations is not, standing alone, sufficient to 
impose ―employer‖ or ―principal‖ liability on the franchisor for statutory or 
common law violations by one of the franchisee‘s employees toward another.  
Here, for example, Domino‘s right to enforce rules relating to franchise territories 
and brand integrity was the clear basis for any suggestions area leader Lee made to 
franchise owner Poff concerning the treatment of Poff‘s employee Dave Knight.  
(See, ante, fn. 9.)  As noted above, in blatant violation of these rules, Knight was 
delivering non-Domino‘s food in marked Domino‘s bags to a location outside 
Poff‘s designated delivery area.  Contrary to implications in the dissenting 
opinion, the Knight incident does not indicate Lee had asserted the right to control 
relevant aspects of the day-to-day workplace behavior of Poff‘s employees. 
 
22  
(See generally Inadvertent Employer, supra, 27 Franchise L.J. 224 
[observing that franchisees ―control the day-to-day operations of their franchised 
businesses,‖ including the right to ―hire and fire their own employees‖]; Ellis & 
Alcantar, Franchisor Liability for the Criminal Acts of Others (1998) 18 Franchise 
L.J. 11, 12 [asserting that a franchisor should not be held liable for injurious acts 
of a franchisee‘s employees ―if it does not control personnel decisions,‖ including 
hiring and firing]; Vicarious Liability, supra, 62 Wash. & Lee L.Rev. 417, 467 
[noting that the franchise relationship ― ‗sets out a detailed scheme of control 
between two autonomous businesses‘ ‖]; Minimizing, supra, 6 Franchise L.J. 3, 6 
[suggesting that franchise contracts ―normally‖ give the franchisee control over 
the hiring and firing of employees].)  
32 
employees.  Their terminology varies, but these courts have focused on the 
franchisor‘s lack of control over the ―instrumentality‖ (Papa John’s Intern., Inc. v. 
McCoy (Ky. 2008) 244 S.W.3d 44, 54), the ―conduct‖ (Depianti v. Jan-Pro 
Franchising Int’l, Inc. (Mass. 2013) 990 N.E.2d 1054, 1063; Viado v. Domino’s 
Pizza, LLC (Or.Ct.App. 2009) 217 P.3d 199, 210), or the ― ‗specific aspect of the 
franchisee‘s business‘ ‖ (Ketterling v. Burger King Corp. (Idaho 2012) 272 P.3d 
527, 533; Kerl v. Rasmussen, Inc. (Wis. 2004) 682 N.W.2d 328, 341) that caused 
the alleged injury. 
Patterson contends that rejection of her views would immunize franchisors 
from vicarious liability for enterprise-related harm.  Such an outcome, she 
maintains, contravenes the public interest in protecting employees from sexual 
harassment, and in securing compensation from companies that can absorb the 
loss.  However, as Domino‘s suggests, these policy arguments lose force when the 
party from whom compensation is sought did not directly control the workforce, 
and could not have prevented the misconduct and corrected its effects.  (See State 
Dept., supra, 31 Cal.4th 1026, 1044.)  As noted above, we cannot conclude that 
franchise operating systems necessarily establish the kind of employment 
relationship that concerns us here.  A contrary approach would turn business 
format franchising ―on its head.‖  (Control, supra, 19 Franchise L.J. 119, 120.) 
Finally, nothing we say here is materially at odds with the analysis that 
would apply if we examined plaintiff‘s three FEHA claims in terms of the 
principles developed under this statutory scheme outside of the franchising 
context.  In general, FEHA is designed to prevent and deter unlawful employment 
practices, and to redress their adverse effects.  (§ 12920.5; State Dept., supra, 31 
Cal.4th 1026, 1044.)  Essential to plaintiff‘s statutory claims is the existence of 
―an employment relationship.‖  (Vernon, supra, 116 Cal.App.4th 114, 127.)  In 
other words, and as noted above, Domino‘s statutory liability for the acts of sexual 
33 
harassment that allegedly occurred at the Sui Juris store depends on whether 
Domino‘s was an ―employer‖ of both plaintiff and the harasser, Miranda.  
(§ 12940, subds. (h) [retaliation for reporting sexual harassment], (j)(1) [sexual 
harassment], (k) [failure to take preventative steps].) 
There are few California cases defining an ―employer‖ under the FEHA 
provisions invoked here.  But, it appears, traditional common law principles of 
agency and respondeat superior supply the proper analytical framework under 
FEHA, as they do for franchising generally.  Courts in FEHA cases have 
emphasized ―the control exercised by the employer over the employee‘s 
performance of employment duties.‖  (Bradley v. Department of Corrections & 
Rehabilitation (2008) 158 Cal.App.4th 1612, 1626, citing Vernon, supra, 116 
Cal.App.4th 114, 124-125; accord, McCoy v. Pacific Maritime Assn. (2013) 216 
Cal.App.4th 283, 301-302.)  This standard requires ―a comprehensive and 
immediate level of ‗day-to-day‘ authority‖ over matters such as hiring, firing, 
direction, supervision, and discipline of the employee.  (Vernon, supra, 116 
Cal.App.4th at pp. 127-128.) 
As discussed above, Domino‘s lacked the general control of an ―employer‖ 
or ―principal‖ over relevant day-to-day aspects of the employment and workplace 
behavior of Sui Juris‘s employees.  Application of the FEHA test for determining 
an employment relationship produces no different result in this franchising case 
than the one we have already reached.  Plaintiff is mistaken to the extent she 
implies that the contrary is true. 
C.  Application of the Law to the Present Case 
In reviewing a grant of summary judgment, we independently evaluate the 
record, liberally construing the evidence supporting the party opposing the motion, 
and resolving any doubts in his or her favor.  (Lyle v. Warner Brothers Television 
Productions (2006) 38 Cal.4th 264, 274.)  As the moving party, the defendant 
34 
must show that the plaintiff has not established, and reasonably cannot be 
expected to establish, one or more elements of the cause of action in question.  
(Hernandez v. Hillsides, Inc. (2009) 47 Cal.4th 272, 285.)  Here, the Court of 
Appeal erred in finding a triable issue of fact on whether an employment or 
agency relationship existed as a prerequisite to holding Domino‘s strictly or 
vicariously liable for Miranda‘s alleged sexual harassment of Patterson.23 
We start with the contract itself.  Under its literal terms, Sui Juris paid for 
the right to sell Domino‘s products using the company‘s business format system, 
including the contract and the MRG.  The contract said there was no principal-
agent relationship between Domino‘s and Sui Juris.  The latter also had no 
authority to act on the former‘s behalf.  Notwithstanding any training, support, or 
oversight on Domino‘s part, Sui Juris agreed to act as an ―independent contractor.‖ 
Likewise, the contract stated that persons who worked in the Sui Juris store 
were the employees of Sui Juris, and that no employment or agency relationship 
existed between them and Domino‘s.  Domino‘s disclaimed any rights or 
responsibilities as to Sui Juris‘s employees.  Hence, nothing in the contract granted 
Domino‘s any of the functions commonly performed by employers.  All such 
                                            
23 
At least two courts in other states have recently upheld summary judgment 
for Domino‘s, as a franchisor, because it did not possess sufficient supervisorial 
control to be held vicariously liable on an agency or employment theory for torts 
committed by employees of a Domino‘s franchisee.  Such was the case despite 
evidence of standard Domino‘s contracts and reference guides closely related to 
those at issue here.  (See Rainey v. Langen, supra, 998 A.2d 342, 350-351; Viado 
v. Domino’s Pizza, LLC, supra, 217 P.3d 199, 209.)  Patterson, like the Court of 
Appeal opinion in the instant case, quotes language from an older decision that 
reached the opposite result.  (Parker v. Domino’s Pizza, Inc., supra, 629 So.2d 
1026, 1029 [describing Domino‘s reference guide as ―a veritable bible for 
overseeing a Domino‘s operation‖].) 
 
35 
rights and duties were allocated to Sui Juris.  They included, but were not 
expressly limited to, ―recruiting, hiring, training, scheduling for work, supervising 
and paying‖ persons employed by Sui Juris. 
The contract also stated that Domino‘s had no duty to operate the Sui Juris 
store.  Nor did Domino‘s have the right to direct Sui Juris‘s employees in store 
operations.  Rather, the contract made Sui Juris solely responsible for managing its 
employees with respect to the proper performance of their tasks.  Poff agreed to 
provide close, full-time supervision in this regard.  Domino‘s disclaimed liability 
under the contract for any damages arising out of the operation of the store.  
Consistent with the exclusive control vested in Sui Juris over its own 
employees, neither the contract nor the MRG empowered Domino‘s to establish a 
sexual harassment policy or training program for Sui Juris‘s employees.  Nor was 
there any procedure by which Sui Juris‘s employees could report such complaints 
to Domino‘s.  In fact, the topic did not appear in the franchise documents at all. 
Thus, under the foregoing terms, Domino‘s had no right or duty to control 
employment or personnel matters for Sui Juris.  In other words, Domino‘s lacked 
contractual authority to manage the behavior of Sui Juris‘s employees while 
performing their jobs, including any acts that might involve sexual harassment. 
Of course, the parties‘ characterization of their relationship in the franchise 
contract is not dispositive.  (Nichols, supra, 248 Cal.App.2d 610, 613.)  We must 
also consider those evidentiary facts set forth in the summary judgment materials 
as to which objections were not made and sustained.  (See Hernandez v. Hillsides, 
Inc., supra, 47 Cal.4th 272, 285; Cislaw, supra, 4 Cal.App.4th 1284, 1292.) 
According to the testimonial evidence, Poff exercised sole control over 
selecting the individuals who worked in his store.  He did not include Domino‘s in 
the application, interview, or hiring process.  Nor did anyone attempt to intervene 
36 
on Domino‘s behalf.  It was Poff‘s decision to hire Patterson as a new employee 
and to otherwise retain the existing staff when he bought the franchise. 
Evidence about the training of Sui Juris‘s employees is more nuanced, but 
did not indicate control over relevant day-to-day aspects of employment and 
employee conduct.  It appears the parties did not follow the literal language of the 
contract placing sole responsibility on Sui Juris for handling all training programs 
for its employees.  Domino‘s provided new employees with orientation materials 
in both electronic and handbook form.  Such programs supplemented the training 
that Poff was required to conduct.  Lee, Poff‘s area leader, did not help him train 
anybody. 
However, with respect to training employees on how to treat each other at 
work, and how to avoid sexual harassment, it appears that Sui Juris, not Domino‘s, 
was in control.  There was no evidence that the training programs Domino‘s 
placed on the PULSE computer system covered these subjects.  As best Poff could 
recall, only pizza-making, store operations, safety and security, and driving 
instructions were involved.  Also, nothing indicates the extent, if any, to which 
Poff borrowed from his mandatory Domino‘s training as a franchisee to craft a 
sexual harassment policy for his store.  Poff could not recall what, if anything, he 
learned from Domino‘s on this score. 
What is clear is that Poff implemented his own sexual harassment policy 
and training program for his employees.  He adopted a zero tolerance approach, 
among other things.  Poff held meetings in which he personally and vigorously 
trained his managers about sexual harassment.  He also installed his policy on the 
PULSE computer system for other employees to view. 
No Domino‘s representative, including Lee, trained Sui Juris employees on 
sexual harassment.  Nothing in the record indicates that any Domino‘s 
37 
representative reviewed Poff‘s sexual harassment policy, discussed its substance 
with Poff or his employees, or observed any training sessions at the store. 
Of particular relevance is that Poff‘s sexual harassment policy and training 
program came with the authority to impose discipline for any violations.  The 
record shows that Poff, not Domino‘s, wielded such significant control. 
First, Poff encouraged the reporting of sexual harassment complaints 
directly to him.  In training sessions, Poff told his managers to contact him if any 
issue or question about sexual harassment arose.  Poff also told Patterson at the 
start of her job to advise him of any such problem — a step she soon took.  The 
apparent purpose of Poff‘s admonitions was to give him the chance to respond by 
taking appropriate disciplinary action against the offending employee. 
Second, Domino‘s had no procedure for monitoring or reporting sexual 
harassment complaints between the employees of franchisees.  Devereaux, 
Domino‘s franchise director, confirmed that the company was not involved in such 
issues at the local level unless the franchisee himself was implicated or otherwise 
required training.  Consistent with the general ―hands-off‖ approach of area 
leaders on sexual harassment, there is no evidence that Lee and Poff discussed the 
topic before Patterson reported Miranda‘s misconduct to Poff, or before her father 
contacted Domino‘s.  As noted, Patterson‘s father used the 1-800 number 
established for Domino‘s customers complaining about their meal or service. 
Third, Poff acted on Patterson‘s complaint by taking unilateral disciplinary 
action.  He first suspended Miranda.  Poff then started an investigation.  However, 
he could not reach a conclusive result.  Miranda subsequently lost his job when he 
failed to report to work.  In doing so, Miranda apparently triggered the ―self-
termination‖ clause in Poff‘s personnel policies.  Poff refused to rehire Miranda.  
There is no evidence that Poff solicited Domino‘s advice or consent on any of 
these decisions, or that he was required to do so. 
38 
Like the dissenting opinion, Patterson emphasizes evidence that Lee said 
Poff should ―get rid‖ of Miranda.  It is not clear when this statement was made.  
For several reasons, however, no reasonable inference can be drawn that it was 
intended or interpreted to mean that Poff had no choice in the matter, that 
Domino‘s was in charge, or that consequences would ensue if Poff did not follow 
Lee‘s advice. 
As noted above, Poff acted with the obvious understanding that the decision 
whether and how to discipline Miranda was his alone to make.  He chose to 
proceed in a prudent and methodical way by investigating the complaint before a 
final decision was made.  He did not act rashly or as though only one outcome 
were permissible — i.e., summary termination on sexual harassment grounds. 
In addition, Poff acknowledged that Lee‘s statement was not accompanied 
by a specific threat, express or implied.  She never stated that Poff would risk any 
sanction if he did not terminate Miranda‘s employment.  Indeed, her statement left 
Poff with no negative memory about possible repercussions at all.  When Lee 
arrived at the Sui Juris store a short time later, Miranda‘s disciplinary fate was not 
discussed.  The only concern was whether and how to retrain the Sui Juris staff.  
By Poff‘s own account, Lee made helpful training suggestions, not demands. 
No reasonable inference can be drawn that Domino‘s, through Lee, retained 
or assumed the traditional right of general control an ―employer‖ or ―principal‖ 
has over factors such as hiring, direction, supervision, discipline, discharge, and 
relevant day-to-day aspects of the workplace behavior of the franchisee‘s 
employees.  Hence, there is no basis on which to find a triable issue of fact that an 
employment or agency relationship existed between Domino‘s and Sui Juris and 
its employees in order to support Patterson‘s claims against Domino‘s on vicarious 
liability grounds.  
39 
III.  CONCLUSION 
Nothing we say herein is intended to minimize the seriousness of sexual 
harassment in the workplace, particularly by a supervisor.  (See State Dept., supra, 
31 Cal.4th 1026, 1048.)  Nor do we mean to imply that franchisors, including 
those of immense size, can never be held accountable for sexual harassment at a 
franchised location.  A franchisor will be liable if it has retained or assumed the 
right of general control over the relevant day-to-day operations at its franchised 
locations that we have described, and cannot escape liability in such a case merely 
because it failed or declined to establish a policy with regard to that particular 
conduct.  Our holding is limited to determining the circumstances under which an 
employment or agency relationship exists as a prerequisite to pursuing statutory 
and tort theories like those alleged against the franchisor here. 
The judgment of the Court of Appeal is reversed. 
 
 
 
 
 
 
 
BAXTER, J. 
 
WE CONCUR: 
CANTIL-SAKAUYE, C. J. 
CHIN, J. 
CORRIGAN, J. 
 
 
 
 
 
 
 
 
 
 
DISSENTING OPINION BY WERDEGAR, J. 
 
I write separately to express my disagreement with the majority‘s application 
of the law to the facts of this case.   
The California Fair Employment and Housing Act (Gov. Code, § 12900 et 
seq.; hereafter FEHA) makes employers liable for sexual harassment (§ 12940, 
subd. (j)(1), (4)(A)).  Thus, as the majority recognizes, plaintiff Taylor Patterson 
may recover from defendant Domino‘s Pizza, LLC (Domino‘s), on her statutory 
claim of sexual harassment (Gov. Code, § 12940, subd. (j))1 if Domino‘s did 
something to become a joint employer with its franchisee Daniel Poff (doing 
business as Sui Juris, LLC), of Poff‘s employees.  Because the FEHA‘s statutory 
definition of ―employer‖ is essentially tautological (§ 12940, subd. (j)(4)(A) 
[― ‗employer’ means any person regularly employing one or more persons,‖ italics 
added]), a court properly looks to the common law for guidance, bearing in mind 
― ‗the spirit and letter of the law that it [is] interpreting‘ ‖ (Bradley v. Department 
of Corrections & Rehabilitation (2008) 158 Cal.App.4th 1612, 1626–1627 
(Bradley), quoting Metropolitan Water Dist. v. Superior Court (2004) 32 Cal.4th 
491, 504).2   
                                            
1  
All further statutory references are to the Government Code.   
2  
We have followed the same approach in other contexts in which the 
relevant statute or regulation has defined the employment relationship 
tautologically, or not at all.  (See, e.g., Martinez v. Combs (2010) 49 Cal.4th 35, 64 
 
(footnote continued on next page) 
 
 
2 
The common law offers various definitions of employment.  Consequently, 
courts in FEHA cases have found ―no magic formula for determining whether the 
requisite employment relationship exists.  The prevailing view is to consider the 
totality of the circumstances, reflecting upon the nature of the work relationship 
between the parties, and placing emphasis on the control exercised by the 
employer over the employee‘s performance of employment duties.‖  (Bradley, 
supra, 158 Cal.App.4th at p. 1626, citing Vernon v. State of California (2004) 116 
Cal.App.4th 114, 124–125 (Vernon).)  The majority, offering its own synthesis of 
the common law, asks whether the alleged employer ―has retained or assumed a 
general right of control over factors such as hiring, direction, supervision, 
discipline, discharge, and relevant day-to-day aspects of the workplace behavior of 
the franchisee‘s employees.‖  (Maj. opn., ante, at p. 3, citing Vernon, at p. 124.)   
Fidelity to a multi-factored, totality of the circumstances test inevitably 
means that ― ‗[t]he precise contours of an employment relationship can only be 
established by a careful factual inquiry.‘ ‖  (Vernon, supra, 116 Cal.App.4th at 
p. 125.)  That a franchisor is not automatically the employer of its franchisee‘s 
employees, irrespective of the details of the parties‘ relationship, necessarily 
follows.  So, too, does it follow that a franchisor may under the circumstances of 
the parties‘ relationship in fact be an employer.  The outcome depends on the 
factual inquiry.   For example, a franchisor, pursuing its legitimate interest in 
                                                                                                                                                       
 
(footnote continued from previous page) 
 
[wage law]; Metropolitan Water Dist. v. Superior Court, supra, 32 Cal.4th at 
pp. 500–501 [public retirement law]; S.G. Borello & Sons, Inc. v. Department of 
Industrial Relations (1989) 48 Cal.3d 341, 350 (Borello) [workers compensation]; 
Tieberg v. Unemployment Ins. App. Bd. (1970) 2 Cal.3d 943, 949–951 (Tieberg) 
[unemployment insurance].)   
 
 
3 
ensuring that customers enjoy a similar experience in each franchised location, 
may implement the franchise agreement in various ways, including ways short of 
day-to-day oversight, to exercise control over employee selection, training, 
personal appearance, interaction with customers, and compliance with in-store 
procedures.  This retention of control by the franchisor, enforced by regular 
inspections and the threat that a noncompliant franchisee will be placed in default, 
presents occasions for the franchisor to act as an employer by forcing the 
termination of problematic employees.  The majority finds that Domino‘s 
successfully walked this tightrope between enforcing contractual standards and 
becoming an employer by leaving to Poff all decisions about the discharge of his 
employees, even when cause for discharge existed.  Because the case has not been 
tried, we will never know whether Domino‘s succeeded or not.  Unlike the 
majority, I would hold that plaintiff has raised a triable issue of fact.   
Asked whether Domino‘s area leader Claudia Lee had ―ever t[old] you that 
you needed to fire any employees,‖ Poff answered ―Yes.‖  Those employees were 
Dave Knight, a manager who had delivered non-Domino‘s food to schools, and 
Rene Miranda, plaintiff‘s alleged harasser.  Asked whether Poff rather than Lee 
had ―ultimately ma[d]e the decision to terminate‖ Knight, Poff answered that he 
―had to pull the trigger on the termination, but it was very strongly hinted that 
there would be problems if I did not do so.‖  Asked ―[h]ow was it strongly hinted,‖ 
Poff explained that ―[t]he area leaders would pull you into your office at the store, 
for example, and tell you what they wanted.  If they did not get what they wanted, 
they would say you would be in trouble.‖  In fact, Lee indicated to Poff that not 
firing Knight might cause Poff to lose his franchise.  Lee candidly testified she 
told Poff that, ― ‗[i]f you have anyone that works for you that is damaging the 
brand or going to cause you to lose your franchise agreement, that person is not 
 
 
4 
the person you want working for you.‘  And I told him, ‗Right now, Dave [Knight] 
is hurting your franchise.‘ ‖  Poff fired Knight a few weeks later.   
This interaction between Poff and Lee provides essential context for their 
later interaction concerning Miranda.  Upon learning of plaintiff‘s allegations of 
harassment against Miranda, Lee told Poff, ―You‘ve got to get rid of this guy.‖  
Asked how he had answered, Poff testified that his ―response always to the area 
leader was ‗yes‘ or ‗I‘ll get it done‘ or, you know, ‗Give me a little time.‘  I never 
said ‗no‘ intentionally to [Lee].‖  Poff could not ―recall specifically‖ whether Lee 
―allude[d] to anything that would happen to [Poff] if [he] didn‘t fire Miranda,‖ but 
it was hardly necessary for Lee to repeat the warning she had recently given Poff 
that the failure to follow her wishes concerning the termination of a problematic 
employee could lead to the loss of his franchise.  Consistently with his statement 
that he ―never said ‗no‘ ‖ to Lee, Poff confirmed that he ―never t[old] her over the 
phone or to her face that [he] did not intend to fire Miranda.‖  A franchisee who 
did not follow Lee‘s suggestions, Poff testified, was ―out of business very 
quickly.‖  Ultimately, Miranda‘s failure to return to work made it unnecessary for 
Poff to risk the loss of his franchise by refusing Lee‘s demand.   
Under the common law, ― ‗[p]erhaps no single circumstance is more 
conclusive to show the relationship of an employee than the right of the employer 
to end the service whenever he sees fit to do so.‘ ‖  (Burlingham v. Gray (1943) 22 
Cal.2d 87, 100.)  While no one factor is determinative, the power to discharge an 
employee offers ― ‗strong evidence‘ ‖ both of the fact of control and of the 
ultimate existence of an employment relationship.  (Kowalski v. Shell Oil Co. 
(1979) 23 Cal.3d 168, 177; see Borello, supra, 48 Cal.3d at p. 350; Tieberg, supra, 
2 Cal.3d at p. 949.)  This is because the employer‘s power to terminate the 
employee‘s services gives the employer the means of controlling the employee‘s 
activities (see Ayala v. Antelope Valley Newspapers, Inc. (2014) 59 Cal.4th 522, 
 
 
5 
531; Malloy v. Fong (1951) 37 Cal.2d 356, 370) and because, as a matter of logic, 
a person‘s reservation of the power to terminate another‘s employee ―is 
incompatible with the full control of the work by another‖ (National Auto. Ins. Co. 
v. Ind. Acc. Com. (1943) 23 Cal.2d 215, 220, italics added).  For these purposes 
―[i]t is not essential that the right of control be exercised or that there be actual 
supervision of the work of the [employee].‖  (Malloy, at p. 370.)  ―What matters is 
whether the hirer ‗retains all necessary control‘ over its operations.‖  (Ayala, at 
p. 531, quoting Borello, supra, at p. 357.)  
In summary, if Domino‘s relationship with Poff gave it the power to force 
him to fire his employees, then those employees were subject not just to Poff‘s 
control but also to Domino‘s and thus were the employees of both.  Viewing the 
evidence in the light most favorable to plaintiff, as we must when reviewing an 
order granting a defense motion for summary judgment (McDonald v. Antelope 
Valley Community College Dist. (2008) 45 Cal.4th 88, 96), the record would 
clearly permit the trier of fact to conclude that Domino‘s retained and exercised 
that power.   
As mentioned, my disagreement with the majority is not so much with its 
statement of the applicable law as with its application of the law to the facts.  In 
concluding Domino‘s did not have the power to force Poff to discharge his 
employees, the majority places too much emphasis on the terms of the franchise 
agreement and not enough on the parties‘ real world interaction.  The language of 
the governing contract is only ―one factor to be considered in determining the 
nature of the employment relationship‖ and ―is not controlling.‖  (Bradley, supra, 
158 Cal.App.4th at p. 1628.)  This is because our principal responsibility in FEHA 
cases is not to give effect to private contracts intended to shift or avoid liability, 
nor is it to promote the use of franchising as a business model or to avoid 
―disrupt[ing] the franchise relationship.‖  (Maj. opn., ante, at p. 31.)  Instead, our 
 
 
6 
duty is to vindicate the Legislature‘s ―fundamental public interest in a workplace 
free from the pernicious influence of sexism.‖  (Rojo v. Kliger (1990) 52 Cal.3d 
65, 90; see Harris v. City of Santa Monica (2013) 56 Cal.4th 203, 224 [same].)  
When this task requires us to construe FEHA‘s definition of employer, we are 
bound by the Legislature‘s command that ―[t]he provisions of [FEHA] shall be 
construed liberally for the accomplishment of [its] purposes . . . .‖  (§ 12993, 
subd. (a).)  To emphasize contractual language intended to shield a franchisor 
from employment-related claims over evidence the franchisor in practice retained 
and exercised the power to terminate the franchisee‘s employees tends to 
undermine FEHA‘s goals by permitting the franchisor, in effect, to opt out of the 
statutory duties of a California employer.   
 For these reasons, I dissent.   
 
 
 
 
 
 
 
WERDEGAR, J. 
 
WE CONCUR: 
 
LIU, J. 
CHANEY, J.*
                                            
* Associate Justice of the Court of Appeal, Second Appellate District, Division 
One, assigned by the Chief Justice pursuant to article VI, section 6 of the 
California Constitution. 
 
 
See next page for addresses and telephone numbers for counsel who argued in Supreme Court. 
 
Name of Opinion Patterson v. Domino‘s Pizza, LLC 
__________________________________________________________________________________ 
 
Unpublished Opinion 
Original Appeal 
Original Proceeding 
Review Granted XXX 207 Cal.App.4th 385 
Rehearing Granted 
 
__________________________________________________________________________________ 
 
Opinion No. S204543 
Date Filed: August 28, 2014 
__________________________________________________________________________________ 
 
Court: Superior 
County: Ventura 
Judge: Barbara A. Lane 
 
__________________________________________________________________________________ 
 
Counsel: 
 
Alan Charles Dell‘Ario; Winer & McKenna, Alexis S. McKenna, Kelli D. Burritt and Kent F. Lowry, Jr., 
for Plaintiff and Appellant. 
 
The deRubertis Law Firm, David M. deRubertis; Pine & Pine and Norman Pine for Consumer Attorneys of 
California as Amicus Curiae on behalf of Plaintiff and Appellant. 
 
Kolar & Associates, Elizabeth L. Kolar; Snell & Wilmer and Mary-Christine Sungalia for Defendants and 
Respondents. 
 
Seyfarth Shaw, David D. Kadue; Law Offices of Steven Drapkin and Steven Drapkin for Employers 
Group, California Employment Law Council and California Chamber of Commerce as Amici Curiae on 
behalf of Defendants and Respondents. 
 
Reed Smith, Margaret M. Grignon and Tillman J. Breckenridge for Automobile Club of Southern 
California as Amicus Curiae on behalf of Defendants and Respondents. 
 
DLA Piper, Kim Lambert, Julia Brighton and John F. Verhey for International Franchise Association and 
California Restaurant Association as Amici Curiae on behalf of Defendants and Respondents. 
 
Manning & Kass, Ellrod, Ramirez, Trester and Steven J. Renick for Eleven Health Club Franchisees as 
Amici Curiae on behalf of Defendants and Respondents. 
 
 
 
 
2 
 
 
Counsel who argued in Supreme Court (not intended for publication with opinion): 
 
Alan Charles Dell‘Ario 
1561 Third Street, Suite B 
Napa, CA  94559 
(707) 666-5351 
 
Mary-Christine Sungalia 
Snell & Wilmer 
600 Anton Boulevard, Suite 1400 
Costa Mesa, CA  92626 
(714) 427-7000