Author: Mark Kobata

In June 2009, Taylor Patterson, a former employee at a Domino’s Pizza Inc. franchise store, filed a harassment lawsuit against the Domino’s franchisee Sui Juris LLC, assistant store manager Renee Miranda and Domino’s Pizza. Patterson alleged she was forced to resign from her job at a Southern California Domino’s owned by Sui Juris after being sexually harassed by Miranda.

A California state superior court first dismissed the lawsuit against Domino’s, finding that the franchisor was not Patterson’s “employer.” However, an appellate court reversed, holding that Patterson was entitled to a trial on whether Domino’s Pizza was her “employer.” 

The California Supreme Court later reversed the appellate court, holding that Domino’s was not sufficiently involved in day-to-day hiring, firing and supervision to warrant liability for Patterson’s claims. “The contract-based operational division that otherwise exists between the franchisor and 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.” Patterson v. Domino’s Pizza LLC, Cal., No. S204543, (Aug. 28, 2014).

IMPACT: Franchisors may avoid liability for employee claims by sufficiently separating themselves from the recruiting, hiring, firing, training and scheduling of the franchisee employees.

Michael Dela Paz, while working as a housekeeper for hospital employer Dignity Health in Nevada, was suspended after Habiba Araru, a cafeteria cashier, complained that Dela Paz had threatened to “take care of” her.

Dela Paz was instructed not to contact employees during his suspension, and after he was reinstated was warned not to retaliate against Araru. Despite management’s instructions, Dela Paz asked co-workers to sign documents attesting to his good character and Araru’s sullenness or disrespect for employees. When Dela Paz’s petition stimulated support from employees because other workers were unhappy with Araru, Dela Paz took the petition signed by employees to a supervisor. Dela Paz was terminated for violating the instruction not to retaliate against Araru.

The National Labor Relations Board issued a complaint alleging that Dignity Health fired Dela Paz for engaging in protected concerted activity in violation of federal law, and after a hearing the NLRB agreed that Dela Paz was fired illegally because he had engaged in concerted activities. Other employees had problems with Araru, and therefore Dela Paz’s conduct was “unquestionably concerted.” Dignity Health, 360 N.L.R.B. No. 126 (June 12, 2014).

IMPACT: Employee complaints about another co-worker, when brought on behalf of other employees, can be considered protected activity under the National Labor Relations Act.

Flex Frac Logistics required its employees to sign a confidentiality agreement precluding workers from sharing confidential information, such as personnel information, with anyone outside of the business.

Acting on an unfair labor practice case filed by a terminated employee, the National Labor Relations Board held that the confidentiality agreement interfered with the right of employees under Section 7 of the National Labor Relations Act to engage in concerted activity for their mutual aid or protection, and, specifically, the right to discuss wages, hours and working conditions.

In response to a challenge to the NLRB ruling, the U.S. Court of Appeals for the 5th Circuit agreed with the NLRB, and held that employees would reasonably understand the rule as a ban on discussing employee wages with anyone outside the company. The court relied on past precedent holding that workplace rules forbidding employee discussion of confidential wage information violate the NLRA. Even rules that do not expressly interfere with such rights still interfere with employee rights if workers would reasonably construe them to prohibit or limit their exercise of rights. Flex Frac Logistics LLC v. NLRB, 5th Circuit, No. 12-60752 (March 24, 2014).

IMPACT: Employers cannot maintain employee confidentiality rules that prohibit the discussion of personnel information involving wages and other working conditions.

Kawaljeet Tagore, an IRS agent, started to wear a kirpan after being baptized into the Sikh religion. Sikhs are required to carry the swordlike object. Tagore’s request for a security waiver to continue to access the federal office where she worked was denied because the blade on her kirpan exceeded the law’s 2.5-inch limit, and did not fall within any exemptions.

When the IRS and Tagore could not agree on a religious accommodation that would allow her to access the building wearing the knife, Tagore appeared for work wearing the kirpan, was denied access and was terminated from her job. The U.S. District Court for the Southern District of Texas dismissed Tagore’s lawsuit against the U.S. and several federal agencies under Title VII and the Religious Freedom Restoration Act.

The U.S. Court of Appeals for the 5th Circuit held that the district court failed to conduct an individualized assessment required by the Religious Freedom Restoration Act and instead concluded the government had a compelling interest in enforcing the security law. The appellate court affirmed dismissal of the Title VII claim since the IRS doesn’t control federal building security. Tagore v. United States (5th Cir.) No. 12-20214 (Nov. 13, 2013).

Impact: Employers are advised that they may be required to accommodate employees’ religious beliefs, and that their efforts to do so should be carefully reviewed.