Labor & Employment Law Daily Taco Bell not negligently liable for sexually harassed 16-year-old franchisee employee
Monday, September 9, 2019

Taco Bell not negligently liable for sexually harassed 16-year-old franchisee employee

By Peter Reap, J.D., LL.M.

The franchisor’s lack of any duty of care to the franchisee’s employee in connection with its franchise relationship doomed the minor employee’s negligence claim.

Fast food restaurant franchisor Taco Bell could not have been liable for negligence, under Kansas law, to a minor employee of one of its franchisees who was sexually harassed by a manager employed by the franchisee because the franchisor lacked any duty of care to the employee, ruled a federal district court in Kansas. Kansas courts have never held that a franchising relationship creates a “special duty” that can give rise to a duty to protect others from harm by third parties. Further, there was no evidence that Taco Bell assumed an obligation or intended to render services for the benefit of the employee. Therefore, the employee’s claim for negligence against the franchisor was dismissed (N.T. v. Taco Bell Corp., September 3, 2019, Broomes, J.).

Alleged sexual assault. According to the complaint, plaintiff N.T. was 16 years old when she worked at one of Taco Bell’s franchises located in Garden City, Kansas. While employed by the franchisee, one of the franchisee’s managers repeatedly sexually harassed the plaintiff, and her complaints about the harassment were brushed aside. After she was sexually assaulted by the manager, the plaintiff was terminated for “job abandonment” and filed this suit.

Six of the plaintiff’s claims, including claims for sexual harassment and sex discrimination, were brought against the franchisee and its manager. A seventh claim for negligence was asserted against the franchisor. Taco Bell moved to dismiss.

Negligence. To recover for negligence in Kansas, the plaintiff must prove the existence of a duty, breach of that duty, injury, and a causal connection between the duty breached and the injury suffered. The plaintiff argued that the franchisor had “a duty to Plaintiff to sell its franchises in a manner that did not create an unreasonable risk of sexual harassment or sexual assault to the franchisee’s employees.”

However, the plaintiff did not point to any section of the Restatement or to any Kansas case finding such a legal duty under similar circumstances, the court observed. This attempt to repackage harassment and assault allegations as a claim for negligent design of a franchise could not overcome the fact that the gravamen of the claim remained: that the plaintiff suffered harm from the actions of a third person and the franchisor failed to prevent it.

No special relationship. The prevailing rule in Kansas is that in the absence of a “special relationship,” there is no duty on a person to control the conduct of a third person to prevent harm to others. The special relationships that can give rise to a duty to protect others from harm by third persons include common carriers and their passengers, innkeepers and their guests, and possessors of land and their invitees. Kansas has never held that the sale of franchise rights to another, standing alone, creates a duty to protect the employees of the franchisee. There are of course statutory duties upon an employer to protect its employees from unlawful discrimination, but the complaint did not allege that the plaintiff was the franchisor’s employee.

Duty of care. The plaintiff argued that the franchisor nevertheless owed her a duty of care because of the obligation “upon everyone who attempts to do anything, even gratuitously, for another, to exercise some degree of care and skill in the performance of what he has undertaken, for the nonperformance of which an action lies.” The duty referred to is reflected in Restatement (Second) of Torts § 324A, which Kansas adopted. It provides in part that one who undertakes to render services to another which he should recognize as necessary for the protection of a third person, is subject to liability to the third person for physical harm resulting from his failure to exercise reasonable care to protect his undertaking, if: (1) his failure to exercise reasonable care increases the risk of such harm; (2) he has undertaken to perform a duty owed by the other to the third person; or (3) the harm is suffered because of reliance of the other or the third person upon the undertaking.

No assumption of obligation. However, the evidence must show the defendant did more than act, but through affirmative action assumed an obligation or intended to render services for the benefit of another. The facts in the complaint failed to show that Taco Bell undertook to render services for the benefit of the owner/operators relating to the enforcement of discrimination laws, nor did it allege facts showing that rendering such services increased the risk of franchisee employees, such as the minor plaintiff, being harassed or assaulted, according to the court.

Vicarious liability. It was true that a number of courts have held that a franchisor may be vicariously liable for the acts of its franchisee if the franchisor controls the particular instrumentality that caused harm to the plaintiff, the court noted. Kansas courts would almost certainly apply general agency principles if it were shown that a franchisor had control or a right of control over the daily operation of the specific aspect of the franchisee’s business that allegedly caused harm.

Absence of control. But here, the complaint did not allege that Taco Bell retained control over the daily supervision, management, and discipline of the franchisee’s employees. To the contrary, the imposition of quality and operational requirements by contract suggested that the franchisor did not intervene in the daily operation and management of the franchise. The complaint thus failed to show any basis for holding the franchisor vicariously liable for the alleged acts that resulted in harm to the plaintiff, the court held.

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