Lauded as one of the most important franchise cases in the recent past, Patterson v. Domino’s established a new standard for addressing vicarious liability issues in California. In reaching its decision that Domino’s was not responsible for the sexual harassment of a franchisee’s employee by the franchisee’s manager, the California Supreme Court presented an analysis of franchising as a unique method of product and service distribution. The court acknowledged that a certain level of control is necessary to protect the intellectual property and the system of operations owned by the franchisor and licensed to the franchisee. The court stated that these types of control should not subject a franchisor to vicarious liability.

Originally published in the Franchise Law Journal, Volume 36, No. 2 - Fall 2016.