Courtland v. GCEP-Surprise LLC et al

Filing 60

ORDER granting 53 Motion for Summary Judgment. The Clerk of Court is directed to terminate Defendants Buffalo Wild Wings, Inc. and Buffalo Wild Wings International Inc. from this action. (See document for further details). Signed by Judge G Murray Snow on 7/29/13. (LAD)

1

WO

2
3
4
5
6

IN THE UNITED STATES DISTRICT COURT

7

FOR THE DISTRICT OF ARIZONA

8
9

Angela M. Courtland,

No. CV-12-00349-PHX-GMS

Plaintiff,

10

ORDER

11

v.

12

GCEP-Surprise, LLC, an Arizona limited
liability company; Buffalo Wild Wings
International, Inc., a corporation; and
Buffalo Wild Wings, Inc., a corporation,

13
14

Defendants.

15
16
17
18

Pending before the Court is Defendants Buffalo Wild Wings, Inc.’s and Buffalo

19

Wild Wings International Inc.’s Motion for Summary Judgment. (Doc. 53.) For the

20

reasons discussed below, Defendants’ Motion is granted.1

21

BACKGROUND

22

Plaintiff Angela Courtland worked as a bartender and server at a franchised

23

Buffalo Wild Wings restaurant located in Surprise, Arizona (the “Restaurant”) from

24

December 2007 until her termination in November 2009. (Doc. 54, BWWI SOF ¶ 59;

25

Doc. 1 ¶ 6.) Courtland alleges that she was subject to sexual discrimination, harassment,

26
1

27
28

Defendant’s request for oral argument is denied because the parties have had an
adequate opportunity to discuss the law and evidence, and oral argument will not aid the
Court’s decision. See Lake at Las Vegas Investors Group v. Pac. Malibu Dev., 933 F.2d
724, 729 (9th Cir. 1991).

1

and retaliation by the Restaurant’s general manager, Mike Marley, and an assistant

2

manager, Josh Buckaloo. (Doc. 1 at 7-9.) She brings Title VII claims against the

3

Restaurant’s franchisor, Buffalo Wild Wings, Inc. and Buffalo Wild Wings International

4

Inc. (collectively, “BWWI”), and the franchisee, GCEP-Surprise, LLC (“GCEP”).

5

BWWI maintains a franchising program which includes more than 470 Buffalo

6

Wild Wings restaurants located across the country. (Doc. 54, BWWI SOF ¶ 1.) BWWI

7

also separately owns and operates over 250 restaurants as corporate-owned locations. (Id.

8

¶ 2.) BWWI owns the trademarks and proprietary systems associated with its franchised

9

and corporate-owned restaurants. (Id. ¶ 3.) On October 11, 2007, GCEP entered into a

10

Franchise Agreement (the “FA”) with BWWI to operate the Restaurant. (Id. ¶ 4.) BWWI

11

terminated the FA with GCEP on May 23, 2011. (Id. ¶ 92.)

12

The FA granted GCEP the right to establish the Restaurant and a license to use the

13

Buffalo Wild Wings brand and trademarks in exchange for royalty fees. (Doc. 54-1, Ex. 4

14

§§ 9(B), (C).) The FA stated that GCEP and BWWI were independent contractors and

15

that GCEP was an independent business responsible for the control and management of

16

the Restaurant. (Id. §§ 6(M), 15(L).) GCEP’s responsibilities included the hire, training,

17

discipline, compensation, and termination of all Restaurant employees. (Id. § 6(M).) The

18

FA set forth guidelines regarding plant maintenance, product presentation and service,

19

insurance, and use of the BWWI trademark, among other items. (See Doc. 54-1, Ex. 4.)

20

BWWI mandated training for the Restaurant’s general manager, operational manager,

21

and assistant manager. (Id. § 7(B).) The training was directed towards product

22

presentation and service and did not address human resources (“HR”) or employment

23

matters. (Doc. 54-2, Ex. 7, Skowronski Depo. at 77-78.) Any supplemental materials

24

regarding employment matters provided by BWWI was merely advisory. (Doc. 54,

25

BWWI SOF ¶ 54.) BWWI performed periodic evaluations of the Restaurant to ensure

26

compliance with the FA guidelines. (Doc. 54-1, Ex. 4 § 6(G).) The evaluators did not

27

review employee management and had minimal interaction with non-managerial staff.

28

(Doc. 54-2, Ex.7, Skowronski Depo. at 80; Doc. 54-2, Ex. 13, Courtland Depo. at 18-20.)
-2-

1

While working at the Restaurant, Courtland believed she was an employee of

2

BWWI. She attests that she was given on-the-job training by persons who were identified

3

to her as trainers from BWWI’s corporate office, and was given an employee handbook

4

that contained the BWWI logo. (Doc. 57, Ex. 1 ¶ 10.) She further states that she was told

5

by her superiors that she was an employee of BWWI. (Id. ¶ 3.) Her belief was also based

6

on the fact that the Restaurant was dressed with Buffalo Wild Wings trademarks. (Doc.

7

54-2, Ex. 13, Courtland Depo. at 22, 39.) However, Courtland was hired, trained on

8

employment matters, supervised, and terminated by Marley. (Id. at 18, 22-23, 38-39.)

9

BWWI moves for summary judgment on all claims. BWWI argues that it cannot

10

be held liable for Courtland’s allegations of employment discrimination because BWWI

11

was not Courtland’s employer nor was GCEP its agent for purposes of vicarious liability.

12

DISCUSSION

13

I.

LEGAL STANDARD

14

Summary judgment is appropriate if the evidence, viewed in the light most

15

favorable to the nonmoving party, shows “that there is no genuine issue as to any material

16

fact and that the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(c).

17

Substantive law determines which facts are material and “[o]nly disputes over facts that

18

might affect the outcome of the suit under the governing law will properly preclude the

19

entry of summary judgment.” In addition, the dispute must be genuine, that is, the

20

evidence must be “such that a reasonable jury could return a verdict for the nonmoving

21

party.” Anderson, 477 U.S. at 248. “[A] party seeking summary judgment always bears

22

the initial responsibility of informing the district court of the basis for its motion, and

23

identifying those portions of [the record] which it believes demonstrate the absence of a

24

genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).

25

Because “[c]redibility determinations, the weighing of the evidence, and the

26

drawing of legitimate inferences from the facts are jury functions, not those of a judge, . .

27

. [t]he evidence of the nonmovant is to be believed, and all justifiable inferences are to be

28

drawn in his favor” at the summary judgment stage. Id. at 255 (citing Adickes v. S.H.
-3-

1

Kress & Co., 398 U.S. 144, 158–59 (1970)); Harris v. Itzhaki, 183 F.3d 1043, 1051 (9th

2

Cir. 1999) (“Issues of credibility, including questions of intent, should be left to the

3

jury.”) (internal citations omitted).

4

Further, the party opposing summary judgment “may not rest upon the mere

5

allegations or denials of [the party’s] pleadings, but . . . must set forth specific facts

6

showing that there is a genuine issue for trial.” Fed. R. Civ. P. 56(e); see also LRCiv.

7

1.10(l)(1) (“Any party opposing a motion for summary judgment must . . . set[] forth the

8

specific facts, which the opposing party asserts, including those facts which establish a

9

genuine issue of material fact precluding summary judgment in favor of the moving

10

party.”). If the nonmoving party’s opposition fails to specifically cite to materials either

11

in the court’s record or not in the record, the court is not required to either search the

12

entire record for evidence establishing a genuine issue of material fact or obtain the

13

missing materials. See Carmen v. S.F. Unified Sch. Dist., 237 F.3d 1026, 1028–29 (9th

14

Cir. 2001); Forsberg v. Pac. N.W. Bell Tel. Co., 840 F.2d 1409, 1417–18 (9th Cir. 1988).

15

II.

ANALYSIS

16

A.

Joint employer

17

“Two or more employers may be considered ‘joint employers’ if both employers

18

control the terms and conditions of employment of the employee.” E.E.O.C. v. Pac. Mar.

19

Ass’n, 351 F.3d 1270, 1275 (9th Cir. 2003) (internal citations omitted). “[B]efore a

20

person or entity can be a joint employer, it must possess the attributes of an employer to

21

some degree.” Id. at 1277. The Ninth Circuit applies an “economic reality” test to

22

determine the existence of a joint employment relationship. Brown v. Arizona, CV-09-

23

2272-PHX-GMS, 2011 WL 2911054 at *2 (D. Ariz. July 20, 2011) (citing Torres–Lopez

24

v. May, 111 F.3d 633, 639 (9th Cir. 1997)). All factors relevant to the particular situation

25

must be considered in evaluating the economic reality of an alleged joint employment

26

relationship. Moreau v. Air Fr., 356 F.3d 942, 947 (9th Cir. 2004) (internal quotation

27

marks and citations omitted). For example, the following factors are relevant to this

28

analysis:
-4-

1

(A) The nature and degree of control of the workers; (B) The degree of

2

supervision, direct or indirect, of the work; (C) The power to determine the

3

pay rates [or] the methods of payment of the workers; (D) The right,

4

directly or indirectly, to hire, fire, or modify the employment conditions of

5

the workers; and (E) Preparation of payroll and the payment of wages.

6

Pac. Mar. Ass’n, 351 F.3d at 1275 (citing Torres–Lopez, 111 F.3d at 646). 2 The Supreme

7

Court and several lower courts have considered “the sine qua non of determining whether

8

one is an employer [to be] that an ‘employer can hire and fire employees, can assign tasks

9

to employees and supervise their performance.’” Id. (citing Clackamas Gastroenterology

10

Assocs., P. C. v. Wells, 538 U.S. 440, 449-50 (2003) and collecting cases). In other

11

words, “[t]he ‘joint employer’ concept recognizes that the business entities involved are

12

in fact separate but that they share or co-determine those matters governing the essential

13

terms and conditions of employment.” Id. at 1276-77 (alterations in original and internal

14

citations omitted).

15

BWWI contends that it was not a joint employer of Courtland because it did not

16

exert control over her employment with the Restaurant.3 A franchisor is not a joint

17

employer unless it has significant control over the employment relationship. For example,

18

in Singh v. 7–Eleven, Inc., an employee sought to hold liable a franchisor for FLSA

19

violations. No. C–05–04534, 2007 WL 715488 at *3-6 (N.D. Cal. March 8, 2007). The

20

court held that the franchisor was not a joint employer because pursuant to the franchise

21

agreement, the franchisee had “exclusive right and responsibility to control the hiring and

22

firing decision.” Id. at *4. Further, the franchisor did not compensate employees or

23

exercise control over the terms of employment, including training, assigning job duties,

24
2

25
26
27
28

“Because there are no reported cases of this Circuit holding that there is a
distinction between joint employment in the FLSA and FMLA contexts and joint
employment under anti-discrimination statutes like the ADA and Rehabilitation Act, the
Court will apply the same legal framework here.” Brown, 2011 WL 2911054 at *3.
3

The Parties agree that BWWI was not Courtland’s direct or sole employer. (Doc.
58 at 8.) Courtland also does not argue that BWWI was an indirect employer that
performed the alleged discriminatory acts. See, e.g., Pac. Mar. Ass’n, 351 F.3d at 1273.
-5-

1

and scheduling. Id.; see also Reese v. Coastal Restoration and Cleaning Services, Inc.,

2

No. 1:10cv36, 2010 WL 5184841 at *3 (S.D. Miss. Dec. 15, 2010); Donovan v. Breaker

3

of America, Inc., 566 F. Supp. 1016, 1019, 1021 (E.D. Ark. 1983); Howell v. Chick-Fil-A,

4

Inc., No. 92–30188, 1993 WL 603296 at *4-5 (N.D. Fla. Nov. 1, 1993). 4

5

Employee and operational supervision does not equate joint employment if the

6

franchisor exercises it for a specific purpose and it is different than the control exercised

7

by an employer. In Moreau v. Air France, a franchisor was not found to be the joint

8

employer of ground crew members, despite extensive supervision, specific performance

9

requirements, and rigid quality control. 356 F.3d 942, 951 (9th Cir. 2004). The court

10

found it relevant that the control was exercised to ensure passenger safety and not to

11

control the employment relationship. Id.; see also Zhao v. Bebe Stores, Inc., 247 F. Supp.

12

2d 1154, 1160 (C.D. Cal. 2003) (franchisor’s employees monitored franchisee’s

13

employees for quality control but franchisor did not schedule or control shifts, or assign

14

duties); Jacobson v. Comcast Corp., 740 F. Supp. 2d 683, 688 (D. Md. 2010) (not finding

15

joint employment although franchisor had power to hire and fire technicians, and set

16

schedules and performance standards because it was for quality control). Where courts

17

have found joint employer liability, the franchisor or putative owner has had significant

18

involvement in day-to-day employee management. See Miller v. D.F. Zee’s, Inc., 31 F.

19

Supp. 2d 792, 806 (D. Or. 1998); Torres-Lopez, 111 F.3d at 637.

20
21
22
23
24
25
26
27
28

4

BWWI relies heavily on Alberter v. McDonald’s Corp., 70 F. Supp. 2d 1138 (D.
Nev. 1999) to support its argument against joint employer liability. However, the court in
that case applied the “single employer” test to determine if two business entities were a
single employer. That test is relevant when “separate corporations are not what they
appear to be, that in truth they are but divisions or departments of single enterprise.”
NLRB v. Deena Artware, Inc., 361 U.S. 398, 402 (1960). In contrast, the “joint employer”
test assumes that the two businesses are separate legal entities and analyzes whether they
“co-determine important matters governing the employer-employee relationship.” U.S.
Football League Players Ass’n, AFL-CIO v. U.S. Football League, 650 F. Supp. 12, 15
(D. Or. 1986). Courtland admits that BWWI was not her direct employer and does not
argue that BWWI and GCEP are a single enterprise. (Doc. 58 at 8.) As such, the Court
will not apply the Alberter framework to this case.
-6-

1

BWWI contends that it did not have the right to hire, supervise and fire employees

2

such as Courtland. Courtland does not contest that GCEP was responsible for those

3

decisions regarding non-managerial staff. (Doc. 54, BWWI SOF ¶ 45; Doc. 57, Courtland

4

SOF ¶ 45.) Further, it is undisputed that BWWI did not compensate Restaurant

5

employees and that GCEP was responsible for payroll, scheduling, and employee record-

6

keeping as well as worker’s compensation claims and unemployment insurance. (Doc.

7

54, BWWI SOF ¶¶ 38-43; Doc. 57, Courtland SOF ¶¶ 38-43.) GCEP independently

8

determined how its employees were reviewed, promoted and disciplined. (Doc. 54,

9

BWWI SOF ¶ 46.)

10

Training was also GCEP’s responsibility; BWWI did not train non-managerial

11

staff. (Doc. 54-1, Ex. 4 § 7(A), (B), (C); Doc. 54, BWWI SOF ¶ 44.) In the declaration

12

filed with her Response, Courtland states that she “was given on-the-job training by

13

persons who were identified to [her] as trainers from the [BWWI] corporate office, and

14

was given an employee handbook that had the [BWWI] logo and stated on its cover that

15

it was a [BWWI] ‘employee handbook.’” (Doc. 57, Ex. 1 ¶ 10.) However, at her sworn

16

deposition, Courtland repeatedly testified that she never met anyone that she could

17

identify as having worked at BWWI’s corporate headquarters and that her supervisor

18

Mike Marley trained her on all HR issues. (Doc. 54-2, Ex. 13 at 18-20, 25-26, 31.)

19

Courtland’s controverting declaration does not create a genuine issue of fact as to

20

BWWI’s involvement in employee training. See Kennedy v. Allied Mut. Ins. Co., 952

21

F.2d 262, 266 (9th Cir. 1991) (“The general rule in the Ninth Circuit is that a party cannot

22

create an issue of fact by an affidavit contradicting [her] prior deposition testimony.”)

23

BWWI asserts that it was not involved with HR matters. It is undisputed that

24

BWWI did not provide assistance with respect to HR issues, mandate HR training, or

25

monitor the Restaurant’s HR policies. (Doc. 54, BWWI SOF ¶¶ 50-53, 55; Doc. 57,

26

Courtland SOF ¶¶ 50-53, 55.) To the extent that BWWI provided managerial staff with

27

HR training material, it was provided on an advisory basis. (Doc. 54, BWWI SOF ¶ 54.)

28

Finally, BWWI contends that it did not influence GCEP’s conduct of the
-7-

1

Restaurant’s daily operations nor did it share profits with GCEP. The FA states, in

2

relevant part:

3
4
5
6

You acknowledge that you are an independent business and responsible for
control and management of your Restaurant, including, but not limited to,
the hiring and discharging of your employees and setting and paying wages
and benefits of your employees. You acknowledge that we have no power,
responsibility or liability in respect to the hiring, discharging, setting and
paying of wages or related matters.

7
8

(Doc. 54-1, Ex. 4 § 6(M).) Although the FA provision is not dispositive, it indicates that

9

GCEP was independently responsible for operations. In the FA, BWWI set forth

10

guidelines regarding plant maintenance, products and operations, liability insurance,

11

indemnification, periodic inspection, and use of the BWWI logo in order to maintain and

12

develop the good will behind its franchise. (See, e.g., Doc. 54-1, Ex. 4 § 5(C), (E), (F),

13

6(B), (C), (F), (I).) BWWI also had the power to terminate GCEP as a franchisee.

14

However, that supervision “alone is not sufficient to create a joint employment

15

relationship.” Singh, 2007 WL 715488 at *4 (citing Evans v. McDonald’s Corp., 936

16

F.2d 1087, 1090 (10th Cir. 1991)); see Zhao, 247 F. Supp. 2d at 1160; Jacobson, 740 F.

17

Supp. 2d at 688; Moreau, 356 F.3d at 951. It is further undisputed that GCEP solely

18

managed all investment, financial, and compensation matters. (Doc. 54, BWWI SOF ¶¶

19

25-29, 38; Doc. 57, Courtland SOF ¶¶ 25-29, 38.) GCEP was the sole owner and BWWI

20

did not have a financial interest in the Restaurant besides receiving royalty fees for the

21

use of its brand name. (Doc. 54, BWWI SOF ¶¶ 5, 11, 12.)

22

There is no genuine issue of material fact GCEP had independence in making

23

employment decisions related to Courtland and other staff. The Court concludes as a

24

matter of law that BWWI may not be held liable as a joint employer.

25
26

B.

Vicarious Liability
1.

Agency Relationship

27

The Ninth Circuit has adopted the agency test for determining when two entities

28

are jointly liable for Title VII violations, under which the determination of whether one

-8-

1

entity is an agent for another is determined based upon traditional rules of agency. Miller,

2

31 F. Supp. 2d at 806 (citing Kaplan v. Int’l Alliance of Theatrical and Stage Employees

3

of the U.S. and Can., 525 F.2d 1354, 1360 (9th Cir. 1975)). “Agency is susceptible of

4

proof as is any other fact and may be established from the circumstances, such as the

5

relation of the parties to each other and to the subject matter, their acts and conduct.”

6

State Farm Mut. Auto. Ins. Co. v. Mendoza, CIV-02-1141-PHX-ROS, 2006 WL 44376 at

7

*17 (D. Ariz. Jan. 5, 2006) (citing Phoenix W. Holding Corp. v. Gleeson, 18 Ariz. 60, 65-

8

66, 500 P.2d 320, 325-26 (App. 1972)). In the franchise context, “an essential element of

9

agency” is the franchisor’s right to control the franchisee’s actions. See Restatement

10

(Third) of Agency § 1.01 cmt. f (2006). “Control is a concept that embraces a wide

11

spectrum of meanings,” but within any relationship of agency the principal initially states

12

what the agent shall and shall not do, and has the right to give interim instructions or

13

directions to the agent once their relationship is established. Id.

14

The “predominant test” for holding a franchisor vicariously liable is whether it

15

“controls or has the right to control the daily conduct or operation of the particular

16

‘instrumentality’ or aspect of the franchisee’s business that is alleged to have caused the

17

harm.” Gray v. McDonald’s USA, LLC, 874 F. Supp. 2d 743, 752 (W.D. Tenn. 2012)

18

(citing Kerl v. Dennis Rasmussen, Inc., 273 Wis. 2d 106, 129 (2004)); see, e.g., Triplett v.

19

Soleil Grp., Inc., 664 F. Supp. 2d 645, 648 (D.S.C. 2009) (internal citation omitted);

20

Hong Wu v. Dunkin’ Donuts, Inc., 105 F. Supp. 2d 83 (E.D.N.Y. 2000). This test has

21

been applied in the context of tortious actions committed by a franchisee or its

22

employees. See Viches v. MLT, Inc., 127 F. Supp. 2d 828, 832 (E.D. Mich. 2000) (hotel

23

franchisor not liable for franchisee’s negligent use of pesticides); Viado v. Domino’s

24

Pizza, LLC, 217 P.3d 199, 201, 207 (Or. Ct. App. 2009) (restaurant franchisor not liable

25

for negligent driving of franchisee’s employee because franchisor did not have right to

26

control that conduct); Papasthatis v. Beall, 150 Ariz. 279, 723 P.2d 97 (App. 1986)

27

(franchisor could be held negligent because franchisor owned the franchisee’s property

28

and also selected, recommended, and inspected the soda machine alleged to have caused
-9-

1

the harm). The alleged “instrumentality of harm” in this case is properly characterized as

2

the Restaurant’s managerial staff. Courtland bases her Title VII claims on allegations that

3

Mike Marley, the Restaurant’s general manager, demoted her from bartender to server

4

because of her pregnancy and ultimately terminated her in retaliation for reporting sexual

5

harassment by an assistant manager, Josh Buckaloo.

6

Franchisor supervision does not necessarily extend to control over an

7

instrumentality of franchisee harm. In Kerl, the Wisconsin Supreme Court explained the

8

significance of operational requirements imposed by a franchisor on a franchisee:

9
10
11
12
13
14
15
16
17
18

[B]ecause many franchise relationships include a license to use the
franchisor’s trade or service mark, the detailed quality and operational
standards and inspection rights specified in the franchise agreement are
integral to the protection of the franchisor’s trade or service mark under the
Lanham Act . . . . The premises of vicarious liability weaken when applied
to a claim that a franchisor should be held strictly liable for the torts of its
franchise[e] [because t]he “control” of a franchisor does not consist of
routine, daily supervision and management of the franchisee’s business.
273 Wis. 2d at 126. The court sided with the majority view in other jurisdictions that:
The standardized provisions commonly included in franchise agreements
specifying uniform quality, marketing, and operational requirements and a
right of inspection do not establish a franchisor’s control or right to control
the daily operations of the franchisee sufficient to give rise to vicarious
liability for all purposes or as a general matter.

19

Id. at 131-32; see id. at 127-29 (collecting cases); Restatement (Third) of Agency § 1.01

20

cmt. f (2006) (stating that the fact that a franchisor “imposes constraints” on a franchisee

21

and sets “standards in an agreement for acceptable service quality” does not of itself

22

create a right of control); see, e.g., Viches, 127 F. Supp. 2d at 832 (franchise agreement

23

does nothing more than insure “uniformity and standardization . . . of services”); Perry v.

24

Burger King Corp., 924 F. Supp. 548, 554 (S.D.N.Y. 1996) (restaurant franchisor not

25

vicariously liable for racial discrimination by franchisee because franchise agreement did

26

not provide that franchisor had control over employment matters).

27

BWWI set out guidelines in the FA in order to promote uniformity among

28
- 10 -

1

franchisees and protect its good will. BWWI required GCEP to maintain the Restaurant’s

2

plant and signage in a specific manner, use authorized products, ingredients, and vendors,

3

and meet health and safety standards. (Doc. 54-1, Ex. 4 § 5(C), (E), (F), 6(B), (C), (F),

4

(I).) BWWI further reserved the right to perform periodic evaluations and send mystery

5

shoppers to ensure that GCEP was following the FA guidelines. (Id. § 6(G).) Courtland

6

testified that representatives from BWWI’s corporate office would visit the Restaurant to

7

meet with her managers and that on such occasions: “our managers would make us clean

8

up, get ready, be on your best behavior, and everybody was always nervous to be the

9

person who got chosen to serve that table, because we knew that those were important

10

people.” (Doc. 54-2, Ex. 13 at 18-20.) The fact that BWWI maintained strict guidelines

11

as to the presentation and operation of the Restaurant does not establish, without more,

12

that BWWI had control over the Restaurant’s managerial staff. See Kerl, 273 Wis. 2d at

13

126 (“The imposition of vicarious liability [on a franchisor] has less effectiveness as an

14

incentive for . . . the exercise of care in the absence of the sort of daily managerial

15

supervision and control of the franchise that could actually bring about improvements.”).

16

Rather, vicarious liability attaches for employment discrimination if the franchisor

17

exerts daily control over the hiring, firing, and supervision of franchisee employees. See

18

Gray, 874 F. Supp. 2d at 752 (“No evidence indicates that [the franchisor] had any

19

control over the hiring, firing, or discipline of [the store manager]. [The franchisor] is

20

therefore not vicariously responsible for [the store manager’s] tortious conduct.”). The

21

facts in Alberter, a case involving Title VII claims, are instructive here. As in the present

22

case, plaintiff alleged that the restaurant manager did not take action when a supervisor

23

subjected her to sexual harassment. 70 F. Supp. 2d at 1140. However, the franchisor “did

24

not control day-to-day operations” and “did not have control over employment matters

25

with respect to workers there.” Id. at 1145. The court further noted that the fact that the

26

franchisor set operational standards and non-binding personnel policies, and could

27

terminate the franchise agreement, “does not establish the requisite degree of control to

28

demonstrate that an agency relationship existed.” Id. The court concluded that “the
- 11 -

1

argument that [the franchisor] may be held liable to [plaintiff] for employment

2

discrimination because [the owner] acted as the corporation’s agent must . . . fail.” Id.

3

BWWI did not have control over the daily conduct of the Restaurant’s managerial

4

staff. As discussed supra in Section II.A., the FA is indicative of GCEP’s independence

5

in employee matters. (Doc. 54-1, Ex. 4 § 6(M).) Although such avowals in a franchise

6

agreement are not dispositive of the agency question, see Restatement (Third) of Agency

7

§ 1.02 cmt. a (2006), they are relevant to determine the parties’ intentions, see Alberter,

8

70 F. Supp. 2d at 1146. In practice, GCEP had sole responsibility for hiring, training,

9

supervising, scheduling, compensating, reviewing, and terminating employees as well as

10

addressing HR issues or grievances. BWWI’s Director of Management Development,

11

Nicole Fuchs, attested that any employment guidance that BWWI provided through

12

training materials was merely advisory and franchisees were not bound to follow it. (Doc.

13

54-2, Ex. 9, Fuchs Decl. ¶¶ 4-8.) In fact, it is undisputed that if a franchisee or employee

14

contacted BWWI with an HR question, BWWI would refer that person back to the

15

franchisee’s HR personnel. (Doc. 54, BWWI SOF ¶ 55; Doc. 57, Courtland SOF ¶ 55.)

16

Although BWWI provided training to the Restaurant’s managerial staff, that

17

training did not pertain to employment matters. Pursuant to the FA, BWWI mandated

18

training for the Restaurant’s general manager, operational manager, and assistant

19

manager, based on their experience level. (Doc. 54-1, Ex. 4 § 7(B).) The FA further

20

required such training to be completed by replacement managers. (Id.) The FA also

21

reserved BWWI’s right to require “ongoing training” as needed. (Id. § 7(C).) BWWI’s

22

franchise consultant assigned to the Restaurant, Conrad Skowronski, testified that the

23

training covered:

24
25
26
27
28

[E]verything about the Buffalo Wild Wings system as pertains to products
that we serve, how to serve it, how to store it, how to present it on aon
our dinnerware, . . . what is involved with our gift card program, what we
go over for standards for services times and so forth. They would cover
what fears thatalcohol thatis a mandate that we would ask the
franchisees to use. They could be covered into how we would like our
environment set up in terms of television and sporting events and what
- 12 -

would go on each channels. [sic]

1
2

(Doc. 54-2, Ex.7, Skowronski Depo. at 77-78.) Importantly, no training was provided

3

regarding the hire, retention, discipline, compensation, training, or recordkeeping for

4

employees. (Id. at 78.) BWWI’s employee relations consultant, Megan Lunsford, testified

5

that BWWI “does not dictate any policies, procedures, or behavior of our franchisees” in

6

relation to employment matters. (Doc. 54-2, Ex. 6, Lunsford Depo. at 26.) The extent of

7

BWWI’s guidance to franchisees on employment discrimination, including sexual

8

harassment, was to tell them “to follow all federal, state, local regulations and rules.” (Id.

9

at 79.)

10

BWWI did not monitor whether Restaurant’s managerial staff complied with

11

employment laws or how they supervised their employees. Although the FA allowed for

12

periodic evaluations, they were to ensure compliance with plant maintenance, customer

13

service, and sanitation guidelines. (Doc. 54-2, Ex. 4, FA ¶ 6(G); Doc. 54-2, Ex.7,

14

Skowronski Depo. at 80.) BWWI retained the right to require GCEP to replace the

15

general manager or operational manager if their actions failed “to meet our standards and

16

qualifications” or brought “any of the Trademarks into disrepute . . . or impair . . . your

17

Restaurant’s reputation or the goodwill of the Trademarks, your Restaurant or the

18

[BWWI] system.” (Doc. 54-1, Ex. 4 § 7(A).) This right must be viewed in the context of

19

BWWI’s attention to product presentation and service, and GCEP’s independence in

20

employment matters. Moreover, BWWI was not empowered to choose the replacements

21

for those positions. The right did not rise to the level of control over managerial staff.

22

Skowronski testified that if he had witnessed sexual harassment during one of his

23

evaluations, he would have done no more than alert the franchise owner “that something

24

occurred in his restaurant and he needs to investigate and possibly talk to his employment

25

lawyer.”5 (Doc. 54-2, Ex.7, Skowronski Depo. at 80.)

26
5

27
28

Courtland alleges that when Marley did not address her sexual harassment
complaints regarding Buckaloo, she met with two BWWI executives, Carolyn Vangelos
and Andrew Bayless. (Doc. 1 ¶ 11.) They then conducted an investigation and determined
that harassment had occurred, and terminated Buckaloo but did not take action against
- 13 -

1
2

The undisputed facts show that BWWI worked with and trained the Restaurant’s

3

managerial staff only to the extent necessary to protect its brand name and dictate product

4

presentation. BWWI did not mandate employee-related policies, was not involved in the

5

daily staff management, and did not address employee grievances. Courtland has not

6

created a genuine issue of material fact as to whether Marley, Buckaloo, and other

7

managers had independence in supervising Restaurant employees. Thus, BWWI cannot

8

be held vicariously liable under an agency theory because it did not have control over the

9

“instrumentality of harm” in this case. Summary judgment is granted on this ground.

10

2.

Apparent Authority

11

“Apparent authority is created by a person’s manifestation that another has

12

authority to act with legal consequences for the person who makes the manifestation,

13

when a third party reasonably believes the actor to be authorized and the belief is

14

traceable to the manifestation.” Restatement (Third) of Agency § 3.03 (2006); See

15

Ruesga v. Kindred Nursing Centers, L.L.C., 215 Ariz. 589, 597, 161 P.3d 1253, 1261

16

(App. 2007). In other words, apparent authority can never be derived from the acts of the

17

agent alone; the evidence must show that the alleged principal represented another as his

18

agent and that the person who relied upon the manifestation was reasonably justified in

19

doing so. Reed v. Gershweir, 160 Ariz. 203, 205, 772 P.2d 26, 28 (App. 1989); Koven v.

20

Saberdyne Sys., Inc., 128 Ariz. 318, 322-23, 625 P.2d 907, 911-12 (App. 1980). “It is

21

firmly established that if the principal’s conduct creates apparent authority, the principal

22

is subject to liability for the agent’s actions even if the agent was acting for his own

23

purposes.” Miller v. Mason-McDuffie Co. of S. California, 153 Ariz. 585, 589, 739 P.2d

24

806, 810 (1987).

25
26
27
28

Marley for ignoring Courtland’s complaints. (Id. ¶ 12.) However, the evidence shows
that the investigation was not conducted by BWWI employees. Courtland testified that
Vangelos and Bayless did not tell her nor imply that they were employed by BWWI,
(Doc. 54-2, Ex. 13, Courtland Depo. at 27-28) and in fact, Lunsford attested that they
were not and have never been employed by BWWI. (Doc. 54-2., Ex. 5, Lunsford Aff. ¶
3).
- 14 -

1

BWWI argues that Courtland has not produced evidence that BWWI made any

2

manifestations to led her to believe that it was her employer. Courtland first asserts that

3

BWWI’s logos, signage and marketing material at the Restaurant made her believe that

4

she was an employee of BWWI. In her deposition, Courtland testified that she observed

5

that “everything around us [was] Buffalo Wild Wings,” and that her understanding of

6

BWWI was “based on the name itself and the buffalo with the wings” and on nothing

7

else. (Doc. 54-2, Ex. 13, Courtland Depo. at 36.) Although the use of a brand name

8

demonstrates a franchise relationship, the existence of a franchise alone does not create

9

an agency. See Oberlin v. Marlin Am. Corp., 596 F.2d 1322, 1327 (7th Cir. 1979).

10

Further, signage and advertising, without more, is not sufficient manifestation by the

11

franchisor to establish apparent agency in this case. Colson v. Maghami, CV 08-2150-

12

PHX-MHM, 2010 WL 2744682 at *13 (D. Ariz. July 9, 2010) (“Colson’s reliance on . . .

13

brand signage as a means of establishing apparent agency . . . fails to account for the

14

Arizona cases holding that a franchisor’s corporate identity does not provide a basis for a

15

finding of apparent agency.”); Am. Motor Sales Corp. v. Sup.Ct., 16 Ariz. 494, 494 P.2d

16

394, 396 (App. 1972) (automobile dealer agreements, advertising and stationary not

17

indicia of agency). It would not be reasonable for Courtland to have relied on signage to

18

infer that BWWI was in fact, her employer.6

19

Courtland points to other representations that led her to believe BWWI was her

20

employer; they are not substantiated by the evidence in the record. She attests that she

21

was provided an “employee handbook” that contained BWWI’s logo on the cover. (Doc.

22

57, Ex. 1 ¶ 10.) However, Courtland has not produced that handbook and even if she had,

23

the presence of the logo would not establish that the handbook was provided by BWWI.

24

The Ninth Circuit has “refused to find a ‘genuine issue’ where the only evidence

25

presented is ‘uncorroborated and self-serving’ testimony.” Villiarimo v. Aloha Island Air,

26
6

27
28

Although it is disputed whether there was a sign in the Restaurant identifying it
as a franchisee and acknowledging that GCEP independently owned and operated it,
(Doc. 54, BWWI SOF ¶ 19; Doc. 57, Courtland SOF ¶ 19), the lack of such notice would
not create apparent authority.
- 15 -

1

Inc., 281 F.3d 1054, 1061 (9th Cir. 2002) (citing Kennedy v. Applause, Inc., 90 F.3d

2

1477, 1481 (9th Cir. 1996) and Johnson v. Washington Metro. Transit Auth., 883 F.2d

3

125, 128 (D.C. Cir. 1989)). Courtland attests: “I was always told by my superiors that I

4

was an employee of [BWWI], and was never told or given any reason to suspect that my

5

actual employer might be some party other than [BWWI].” (Doc. 57, Ex. 1 ¶ 3.) This

6

uncorroborated statement is not sufficient to create a genuine issue of fact. Courtland

7

does not identify which “superiors” told her that she was a BWWI employee and in what

8

context the statements were made. Further, even if her superiors had made such

9

statements, Courtland does not establish that they are traceable to manifestations by

10

BWWI. Courtland also attests that she was trained at the Restaurant by “persons who

11

were identified to [her] as trainers from the [BWWI] corporate office.” (Doc. 57, Ex. 1 ¶

12

10.) However, as discussed supra, that attestation is contradicted by her earlier testimony,

13

(Doc. 54-2, Ex. 13 at 18-20, 25-26, 31), and thus does not create a genuine issue of fact.

14

See Kennedy, 952 F.2d at 266.

15

To establish apparent authority, Courtland must show not only that she

16

subjectively believed she was employed by BWWI but that her belief was objectively

17

reasonable and based on BWWI’s manifestations. See Myers v. Bennett Law Offices, 238

18

F.3d 1068, 1073 (9th Cir. 2001). Courtland attests that she always thought her employer

19

was “the well known established national restaurant chain known as [BWWI]” and she

20

“did not know what a franchise was, and only learned that BWWI might not be the only

21

party liable to me for damages when [she] met with [her] attorney of record, just prior to

22

the filing of this lawsuit.” (Doc. 57, Ex. 1 ¶¶ 3-4.) Courtland does not produce evidence

23

that BWWI “intentionally or inadvertently induced” that belief. See Curran v. Indus.

24

Comm’n of Arizona, 156 Ariz. 434, 437, 752 P.2d 523, 526 (App. 1988) (internal citation

25

omitted). In fact, the record shows that she ignored indicators that she was employed by

26

GCEP and not BWWI. For example, Courtland provided an employee information card

27

to Amcheck, the payroll services provider for GCEP, and the heading of that card listed

28

“GCEP-Surprise LLC.” (Doc. 54-2, Ex. 12.) Courtland’s W-2 forms listed “GCEP- 16 -

1

Surprise LLC” as the name of her employer and did not mention BWWI. (Doc. 54-2,

2

Exs. 14, 15.) It is undisputed that she did not inquire regarding the ownership of the

3

Restaurant before her employment was terminated. (Doc. 54, BWWI SOF ¶ 80; Doc. 57,

4

Courtland SOF ¶ 80.) There is no evidence that Courtland reasonably relied upon

5

manifestations by BWWI that it was her employer. Summary judgment is granted on this

6

point.7
CONCLUSION

7
8

Courtland has not shown that there is a genuine issue of material fact as to whether

9

BWWI was her joint employer. There is also no evidence that BWWI may be held

10

vicariously liable for employment discrimination under either a theory of agency or

11

apparent authority.

12

IT IS THEREFORE ORDERED that Defendants’ Motion for Summary

13

Judgment (Doc. 53) is GRANTED. The Clerk of Court is directed to terminate

14

Defendants Buffalo Wild Wings, Inc. and Buffalo Wild Wings International Inc. from

15

this action.

16

Dated this 29th day of July, 2013.

17
18
19
20
21
22
23
24
25
26
27
28

7

Courtland points to evidence of BWWI manifestations that she received upon or
after the termination of her employment with the Restaurant. She refers to a “Buffalo
Wild Wings Performance Counseling Record” containing the BWWI logo in the heading
that she was provided upon termination (Doc. 57, Ex. 3), her last paycheck from
Amcheck payroll services listing the company name as “BWW Surprise” (Id., Ex. 4), and
a response from the Restaurant to her EEOC charge of discrimination containing the
BWWI logo and listing the company name as “Buffalo Wild Wings, Surprise” (Id., Ex.
5). However, Courtland may not rely upon this evidence to show apparent authority
during her employment because she received the documents after termination.
- 17 -