On June 3, 2021, the United States District Court for the Eastern District of Missouri rejected McDonald’s attempt to have sexual harassment claims against it dismissed at the outset of the litigation. See Johnson v. McDonald Corp., et al., Case No. 4:20-CV-1867-RWS, 2021 WL 2255000 (E.D. Mo. June 3, 2021).
While not necessarily binding on other courts, the decision is significant, as it speaks to potential liabilities of franchisors as “joint employers” in the franchising context. We previously posted an article on this issue and how it implicates unresolved questions regarding a franchisor’s rights or duties under various laws.
The Johnson case provides a real-life example of how such issue may impact a franchisor in employment litigation.
Barbara Johnson (“Johnson”) worked for a McDonald’s franchise in St. Louis, Missouri. She alleges she suffered sexual harassment and assault in the workplace. As a result, Johnson filed a lawsuit against the franchisee operating the McDonald’s, as well as McDonald’s corporate—that is, the franchisor. In response, McDonald’s corporate moved to dismiss the case, claiming Johnson was not one of its employees under the relevant law—Title VII.
In reviewing McDonald’s’ motion to dismiss, the Court emphasized Johnson’s specific allegations about McDonald’s corporate and its involvement in the operations of the St. Louis franchise at issue. The Court stressed the following facts as relevant to Johnson’s claim that McDonald’s corporate was a potential “joint employer” under Title VII:
- McDonald’s corporate conducted frequent inspections of the franchise and specified particular employees that were not performing their jobs in accordance with McDonald’s standards;
- McDonald’s corporate trained the franchise’s general manager at Hamburger University at McDonald’s corporate headquarters;
- McDonald’s corporate provided guidance about employee training, including training regarding the prevention and reporting of sexual harassment;
- Johnson applied for her job on a generic McDonald’s application that McDonald’s corporate provided to the franchise.
The Court also addressed McDonald’s’ argument that many other courts have dismissed cases based on the rationale that a franchisee’s employees are not employees of the franchisor. The Court, however, distinguished these cases and/or refused to follow them as precedent.
While the Court did not decide or find that McDonald’s was, in fact, a “joint employer,” its decision is significant because McDonald’s corporate now must defend against a sexual harassment lawsuit as a potential “joint employer” of the franchisee’s employee. The parties will certainly conduct discovery about all the different ways in which McDonald’s corporate is involved in the daily operations of its franchised location in St. Louis, Missouri.
It remains to be seen whether the evidence uncovered through discovery will suffice to establish McDonald’s corporate as a joint employer. And even if so, it remains to be seen whether Johnson can prove her claims. Stay tuned for further developments.