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Posted by Samuel A. Wong | Sep 02, 2014 | 0 Comments


As many employees know, more and more companies – especially in the fast food industry – use something called a “franchise” to separate the main company legally from your local store and employer.  While your local Pizza Hut may look exactly like all the other Pizza Huts you see, it is probably owned by a small local company or individual, not by the giant corporate brand.

Companies do this for several reasons, but one of the most important is for legal protection.  Pizza Hut the giant brand doesn't want to get hauled into court every time your local Pizza Hut manager does something wrong.

An employee of a Pizza Hut in California sued the main company when she was sexually harassed at her local store.  She claimed that Pizza Hut the big corporate brand controlled so many minor details of how the local Pizza Hut ran that it should be treated like her employer.

After years of litigation and bouncing around in California courts, the California Supreme Court finally gave Pizza hut and the employee an answer, and it wasn't what she wanted to hear.  The court decided that while Pizza Hut controlled the branding and gave detailed instructions about how to do certain things (like cook the pizzas properly), the big corporation was not the sexually harassed employee's actual employer.  It did not decide who to hire or fire at the local store or how to discipline employees.  In fact, the decision of how to discipline the harasser was made entirely by the local store owner.

In the end, the court decided that a company has to act like a normal employer in order to be legally responsible like one for things like sexual harassment.  This means things like controlling employees' hours, making hiring, firing, promotion, and discipline decisions, and making other kinds of decisions like your boss normally would.

However, if a big brand like Pizza Hut did act like a normal employer, for instance by making the decision to wrongfully fire an employee, it would be treated like any other employer.

For employees who have been wronged by their employers, it is very important to figure out who made the illegal decisions.  Was it your manager you see every day, or some ‘suit' sitting as a desk in an office across the country?  Knowing who unlawfully fired you is the first step in knowing who should be held responsible.

About the Author

Samuel A. Wong

Samuel A. Wong is a renowned Orange County trial lawyer and a Co-Founder of Aegis Law Firm. Mr. Wong has spent his entire career litigating employment related matters, including wrongful termination, discrimination, harassment, wage, disability and medical leave cases. Mr. Wong is also an expert ...


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