As participants in the franchise industry know, there has been a considerable amount of discussion about the overall meaning and impact of the NLRB’s Browning-Ferris Industries ruling on August 27. In response to this expansion of the “joint employer” standard in a non-franchise setting, franchise systems are evaluating and discussing the practical impact that an expanded “joint employer” standard may have on franchise systems.
Not surprisingly, the plaintiff’s bar is already looking for opportunities to rely on the Browning-Ferris Industries ruling to expand the “joint employer” standard and hold franchisors liable for a franchisee’s tort, even in the most extreme and unusual situations. Recently, a former employee of a Marriott franchisee in the Chicago area sued the local franchisee making extraordinary and salacious allegations. In Tashima Little v. TMI Hospitality Inc, et al., Case No. 2:15-cv-02204, pending in the U.S. District Court for Central District of Illinois, the plaintiff alleges that she and other employees of the franchisee were systematically and repeatedly sexually harassed and assaulted by a hotel manager.
Plaintiff’s counsel, however, recently filed an amended complaint adding the franchisor, Marriott International, as an additional party defendant. In addition to alleging the standard vicarious liability theories against the franchisor, plaintiff’s counsel specifically referenced the NLRB’s new “joint employer” standard as a motivating factor in expanding liability to the franchisor. Although it is not uncommon for plaintiffs to attempt to rope the franchisor into tort claims against a franchisee, the existence of and the publicity associated with the NLRB’s ruling in Browning-Ferris is already resulting in expanded claims against franchisors.
As this issue continues to be debated at higher levels, one can expect the plaintiff’s bar to continue to use NLRB’s new “joint employer” standard to expand liability claims against franchisors, even in the most salacious of cases. Franchisors should monitor developments as this and other cases are prosecuted to impose the NLRB’s new “joint employer” standard on franchisors for the tort liability of their franchisees.