HARRIS v. MIDAS et al
MEMORANDUM AND ORDER. For the reasons stated in the Memorandum & Order filed herewith, the TBC Defendants' Motion to Dismiss (Doc. 7 ) is GRANTED and the Defendants' Partial Motion to Dismiss (Doc. 10 ) is DENIED. Consistent with the for egoing, the Court hereby DISMISSES WITHOUT PREJUDICE all claims against the TBC Defendants. If Plaintiff wishes to file an Amended Complaint, she must do so on or before 8/24/2017. Should no Amended Complaint be filed by 8/24/2017, the Court will di smiss all claims against the TBC Defendants WITH PREJUDICE. Defendants shall answer or otherwise respond to the Amended Complaint (or, if no Amended Complaint is filed, to the Complaint) on or before 9/7/2017. Signed by Judge Cathy Bissoon on 8/10/2017. (kg)
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
MIDAS, et al.
Civil Action No. 17-95
Judge Cathy Bissoon
MEMORANDUM AND ORDER
Pending before the Court are Motions to Dismiss filed by Defendants Midas International
Corporation, Midas, Inc., and TBC Corporation (collectively, the “TBC Defendants”) (Doc. 7)
and Defendants Auto Systems Centers, Inc., Katz Midas Franchises, Trent Knight, Max Auto
Supply Company, Midas, Midas Auto & Tire Experts, Midas Auto Service Experts, Midas
International Corporation, Midas, Inc., Ken Shick, and TBC Corporation (collectively, the
“Defendants”) (Doc. 10), pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. For
the reasons that follow, the TBC Defendants’ Motion to Dismiss (Doc. 7) will be GRANTED
and Defendants’ Partial Motion to Dismiss (Doc. 10) will be DENIED.
A. DEFENDANTS’ PARTIAL MOTION TO DISMISS
a. Factual Background
The Court will first consider Defendants’ Partial Motion to Dismiss (Doc. 10). The Court
writes principally for the parties, who are familiar with the factual context and legal history of
this case. Therefore, it will set forth only those allegations that are necessary to its analysis.
According to the Complaint, Plaintiff Hannah Harris (“Plaintiff” or “Harris”) worked as a
technician at the Lower Burrell Midas location where Defendant Ken Shick was and still is the
store manager. Compl. (Doc. 1) at ¶¶ 1-2, 10. Throughout her less than one-year employment
with Midas, Harris alleges that she was “repeatedly sexually, physically and emotionally
harassed, assaulted, and tortured by Defendant Shick.” Id. at ¶¶ 46-47.
Examples of the conduct that Harris alleges she was subjected to by Shick and other
Midas managers include the following:
Shick grabbed Harris by the back of the neck and shoved her head down to look at
brakes she mistakenly thought were worn out. When doing so, Shick called Harris
a “dumb b*tch.” (Id. at ¶ 48).
In April 2016, Assistant Store Manager, Justin Machen presented a stick to Harris
that was spray-painted black and carved into the shape of a penis. Mr. Machen
and other Midas employees gave the stick a name, which they carved into the
stick: “Hannah Beater.” They also carved the following phrases into the stick:
“Long D*ck Style” and “Hannah C*nt B*tch.” Shick encouraged Mr. Machen
and the other Midas employees to engage in such conduct. (Id. at ¶¶ 49-53).
On June 6, 2016, Shick repeatedly struck Harris in the arm in anger. (Id. at ¶ 54).
While Harris was on the floor cleaning, Shick walked over to her, grabbed his
crotch and said “well, while you’re down there...” suggesting that Harris should
engage in oral sex with him. (Id. at ¶ 56).
Shick often called Harris a “dumb b*tch,” “dumb c*nt,” and would state, even in
front of customers, that since Harris is a woman, “she doesn’t know what she’s
talking about.” (Id. at ¶ 57).
Shick told Harris that she was “asking for it from the boys” because she wore a
tank top and jeans in the shop. (Id. at ¶ 59).
Shick required Harris to perform job duties that other men were not expected to
perform. For example, he told Harris that it was her “womanly duty to scrub the
bathroom.” (Id. at ¶ 60).
Shick commented about Harris’s female body parts and described the sexual
things he would like to do to Harris. (Id. at ¶ 61).
Shick went behind Harris, put his hands on her hips, and moved his hips as
though he was engaging in a sexual act with her. (Id. at ¶ 62).
Shick opened his arms and insisted that Harris hug him while asking, “Who’s
your daddy?” If Harris did not acquiesce to these or similar demands, she would
be harassed throughout the day by Shick. (Id. at ¶¶ 63-64).
Shick sent Harris home, which resulted in her losing pay, various times while
stating things like “take your bitch a** home” or “go take your tampon out.” And,
on other occasions, Harris would be forced to make an excuse to leave work to
escape the harassment. (Id. at ¶ 65).
Throughout her employment, Shick told Harris that “if she were to complain about the
way she was treated he would have her livelihood taken from her and, resultantly, that she would
lose the ability to provide for her children.” Id. at ¶ 72.
Plaintiff reported Defendant Shick’s conduct to Defendant Trent Kight, the district
manager and Defendant Shick’s immediate supervisor. Id. at ¶ 66. Rather than reprimand Shick,
Kight joined him in sexually harassing Plaintiff. Id. at ¶¶ 67-68. For example, in or about early
2016, Defendant Kight got into the back of a customer’s car that Harris was pulling out and
asked, “Where are we going to f*ck?” Id. at ¶ 70. Further, Defendant Kight asked Harris what
she looked like under her clothes because he thought she had a nice body. Id. at ¶ 71.
On July 8, 2016, Defendant Kight called Harris while he was at the Lower Burrell Midas
location drinking beer with several Midas employees. Id. at ¶ 73. After Harris did not answer,
Kight started texting Harris from another phone number. Id. at ¶ 74. In the text messages, Kight
admitted, “It’s your bosses boss.” Id. at ¶ 75. Kight then wrote that he thinks Harris is “sexy,”
among other inappropriate comments. Id. at ¶ 76. Harris responded by telling Kight that his text
messages were “extremely inappropriate.” Id. at ¶ 77. Later that evening, Harris filed a police
report against Kight and also advised the police that she was being sexually harassed in the
workplace. Id. at ¶ 81.
On July 9, 2016, Harris asked Shick for the employee handbook and human resources’
phone number. Id. at ¶ 82. Harris also advised Shick that she had filed a criminal complaint
against Kight the night before. Id. at ¶ 83. Shick told Harris that she should only report Kight’s
conduct to Shick. Id. at ¶ 86. In an attempt to further intimidate Harris, Shick reminded her of
his military background. Id. at ¶ 87. In addition, Shick threatened Harris that if she went above
his head, she would lose her job. Id. at ¶ 88. Harris was so upset that she was shaking. Id. at
¶ 89. Plaintiff alleges that Shick made these threats to intimidate Harris because he was worried
she had or would bring criminal charges against him and Kight. Id. at ¶ 90.
During their final conversation regarding this matter, which Harris implies that she
recorded, Shick threatened, intimidated and assaulted Harris. Id. at ¶ 94. Among other things,
Shick stated that it was his understanding that Harris sought to bring charges of sexual
harassment against not only Kight but also Shick. Id. at ¶ 95. Shick threatened that if Harris
filed a complaint or “charges,” her job would be in jeopardy. Id. at ¶ 96. Shick told Harris that
she should shut her “f*cking mouth.” Id. at ¶ 97. Shick then suggested that any harassment
Harris received was her fault. Id. at ¶ 100. Shick stated that he would never hire another woman
with children and no husband. Id. at ¶ 101. Shick stated that if he was young and wanted to
sleep with Harris, he would get her drunk and Harris would “spread her legs.” Id. at ¶ 102.
Shick described how he had previously seen Harris’s breasts “flapping in the wind” when Harris
bent underneath a car. Id. at ¶ 103. Shick threatened that if Harris ever attempted to use the fact
that he saw her breasts against him, he would punch her in the nose. Id. at ¶ 104. Shick then
told Harris to sit in a chair several times. Id. at ¶ 105. The final time Shick pushed Harris into
the chair. Id. at ¶ 106. Shick then stood over Harris and looked down her shirt. Id. at ¶ 107.
Shick actually pulled Harris’s shirt away from her body, looked at Harris’s breasts and
commented upon them. Id. at ¶ 108. Harris was upset, crying and in fear, and alleges that
Shick’s conduct caused her severe emotional distress. Id. at ¶¶ 109-110.
Thereafter, Harris reported Shick’s harassing conduct in detail to Vice President Ian Katz
and District Manager Chris Harter. Id. at ¶ 116. Harter told Harris that she had to either return
to work with the harassers, accept a transfer to an inconvenient location, or be terminated. Id. at
¶ 117. Despite being told of Defendant Shick’s conduct, Harter explicitly told Harris: “Ken will
not be moved.” Id. at ¶ 118. Because a transfer was not economically feasible, Harris accepted
termination. Id. at ¶ 121. Harris claims, at the very least, that she was constructively terminated.
Id. at ¶ 122.
On August 16, 2016, counsel for Defendants sent a letter to Plaintiff, which Defendants
attach to their Motion to Dismiss. Id. at ¶ 125; see Doc. 10, Exhibit A. According to Plaintiff,
the letter was sent as an act of retaliation meant solely to dissuade Harris from pursuing her
claims. Doc. 1 at ¶ 126. Defendants’ actions caused Harris (who Midas knew to be emotionally
and mentally fragile) to suffer from anxiety, shake uncontrollably and even call a suicide hotline
to help deal with stress. Id. at ¶ 127. In addition, Harris has suffered several physical ailments
as a result of Defendants’ alleged conduct. Id. at ¶ 128.
“To survive a motion to dismiss, a complaint must contain sufficient factual matter,
accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570
(2007)). When faced with a motion to dismiss, a court “must accept all of the complaint’s wellpleaded facts as true, but may disregard any legal conclusions.” Fowler v. UPMC Shadyside,
578 F.3d 203, 210-11 (3d Cir. 2009).
i. Dismissal of Intentional Tort Claims Based on the Worker’s
Defendants argue that Plaintiff’s intentional tort claims should be dismissed because the
claims are barred by the Pennsylvania Worker’s Compensation Act (“PWCA”). The PWCA
“‘provides the exclusive remedy for all employees’ work-related injuries.’” Jackson v. Lehigh
Valley Physicians Group, 2009 WL 229756, *6 (E.D. Pa. 2009) (citation omitted). “However,
the statute recognizes a limited exception, known as the ‘personal animus’ or ‘third party attack’
exception, which permits claims for ‘employee injuries caused by the intentional conduct of third
parties for reasons personal to the tortfeasor and not directed against him as an employee or
because of his employment.’” Id. (quotations and citations omitted). “The ‘critical inquiry in
determining the applicability of the third-party attack exception is whether the attack was
motivated by personal reasons, as opposed to generalized contempt or hatred, and was
sufficiently unrelated to the work situation so as not to arise out of the employment
relationship.’” Id. (quotations and citations omitted); see also Durham Life Ins. Co., v. Evans,
166 F.3d 139, 160 (3d Cir. 1999) (“The worker’s compensation law excepts from its preemptive
scope employee injuries caused by the intentional conduct of third parties for reasons personal to
the tortfeasor and not directed against him as an employee or because of his employment.”)
Here, the Court agrees with Defendants that, with the exception of the text messages she
received from Defendant Kight after work, most of the alleged harassment occurred in Plaintiff’s
workplace. Nevertheless, the Court concludes that there remain issues of fact as to whether
Defendants Shick and Kight’s conduct was personal in nature and sufficiently disconnected from
any legitimate employer-employee relationship for Plaintiff’s claims to fit within the exception
to the PWCA. As Plaintiff argues, for example, the alleged assault she sustained on July 9, 2016,
when Defendant Shick forced her into a chair, pulled away her shirt and looked at her breasts, is
not conduct that one can or should expect in the workplace. See Jackson, 2009 WL 229756, at
*8 (finding that a physical assault by a co-worker, though taking place at work and during work
hours, “was not closely tied to any work-related activities” and “did not occur in the commission
of [plaintiff’s] job duties,” and thus “could not reasonably ‘be expected in the workplace.’”).
Furthermore, Plaintiff alleges that Shick’s conduct was personal in nature, as he sought,
in part, to intimidate Harris from pressing charges of harassment against him and Defendant
Kight. Doc. 1 at ¶¶ 84, 90, 95, 99; see also id. at 169 (“Defendant Shick’s conduct, in whole or
in part, was evidence of his personal animus toward Ms. Harris.”)). Although Defendants argue
that the Court “need not accept” Plaintiff’s inference that “Shick’s conduct was personal in
nature,” (see Doc. 23 at 2), the Court finds that the question of an alleged harasser’s intent is
inherently fact intensive, and if an intentional tort claim is properly pled, the issue of intent
should be reserved for the trier of fact. Jackson, 2009 WL 229756, at *9. At this early stage of
litigation, Plaintiff has alleged sufficient facts to show that the threats and assault she faced at
work were the result of Defendant Shick’s and Kight’s personal animus against her. Therefore,
her intentional tort causes of action are not barred by the PWCA.
ii. Dismissal of IIED Claim Based on Failure to Allege Extreme and
Defendants further argue that Plaintiff’s intentional infliction of emotional distress (IIED)
claim should be dismissed because, according to Defendants, Shick’s conduct was not extreme
and outrageous. The Court, quite frankly, finds this argument astonishing and wholly without
merit. Without reciting the distressing allegations once again, finds that Shick’s alleged conduct
clearly “go[es] beyond all possible bounds of decency,” is “regarded as atrocious,” and is
“utterly intolerable in a civilized society,” see Hoy v. Angelone, 554 Pa. 134, 720 A.2d 745 (Pa.
The Court specifically rejects Defendants’ argument that Plaintiff does not state an IIED
claim because she has not alleged that she suffered any “adverse employment action
whatsoever.” Doc. 23 at 3. To the contrary, Plaintiff alleges that she suffered both threats of
physical injury and an actual physical assault in retaliation for reporting to Shick that Kight
sexually harassed her. Hoy, 554 Pa. at 152 (“[A]s a general rule, sexual harassment alone does
not rise to the level of outrageousness necessary to make out a cause of action for the intentional
infliction of emotional distress. . . The extra factor that is generally required is retaliation . . . .”).
Among other things, Plaintiff alleges that, when she reported Kight’s conduct to Shick, Shick
reminded her of his military status, threatened to punch her in the nose, implied that he would
rape her (stating that, if he wanted to sleep with her, he would “get her drunk” and she would
“spread her legs”), and then pushed her into a chair, pulling her shirt away from her body, and
looked at her breasts. Doc. 1 at ¶¶ 87, 102, 104-108. Courts in Pennsylvania have long held that
a retaliatory threat of physical injury—let alone an actual physical assault—may support a claim
for IIED. See Denton v. Silver Stream Nursing & Rehab. Ctr., 739 A.2d 571, 577-78 (Pa. Super.
Ct. 1999) (holding that a plaintiff stated an IIED claim where plaintiff alleged facts supporting an
inference that her employer supported and condoned death threats against her in retaliation for
her aid of an external investigation and her refusal to resign her employment).
Thus, the Court finds that Plaintiff certainly has alleged sufficient facts to state a viable
iii. Dismissal of Intrusion Upon Seclusion Claim
Defendants next argue that Plaintiff failed to plead a viable intrusion upon seclusion
invasion of privacy claim because the alleged wrongful conduct at issue occurred in a public
As both parties agree, courts in Pennsylvania rely on the Restatement (Second) of Torts
in analyzing intrusion upon seclusion claims. Tagouma v. Investigative Consultant Servs., Inc.,
4 A.3d 170, 174 (Pa. Super. 2010). The Restatement defines the tort of intrusion upon seclusion
as follows: “One who intentionally intrudes, physically or otherwise, upon the solitude or
seclusion of another or his private affairs or concerns, is subject to liability to the other for
invasion of his privacy, if the intrusion would be highly offensive to a reasonable person.”
(citing Restatement (Second) of Torts § 652B). Comment C of that section further provides:
“Even in a public place, . . . there may be some matters about the plaintiff, such as his
underwear or lack of it, that are not exhibited to the public gaze; and there may still be invasion
of privacy when there is intrusion upon these matters.” Relying on the language in the
Restatement, courts have held that viewing an individual’s private body parts without his or her
consent can constitute an intrusion upon seclusion. See, e.g., Borton v. Unisys Corp., 1991 WL
915, at *9 (E.D. Pa. Jan. 4, 1991) (“[I]t is apparent that liability attaches . . . when a photograph
is taken of a part of a person’s body which he or she would ordinarily not reveal to the public.”);
Hidey v. Ohio State Highway, 689 N.E.2d 89, 92 (Ohio Ct. App. 1996) (relying upon Comment
C to Section 652B in finding that “What is underneath her clothing is private and a part of
appellant’s seclusion. The intrusion upon these private matters . . . would be highly offensive to a
reasonable person and, indeed, appellant averred that such acts caused her humiliation.”).
Here, Plaintiff alleges that Shick forced her into a chair, pulled her shirt away from her
body, looked at her breasts and commented on them. Doc. 1 at ¶¶ 105-108. Taking these
allegations as true, the Court finds that Plaintiff has adequately stated a claim for intrusion upon
iv. Dismissal of Retaliation Claim to the Extent it is Based on
Defendants’ Response to a Settlement Demand
Finally, Defendants challenge Plaintiff’s retaliation claim to the extent it relies on
Defendants’ August 16, 2016 settlement letter, 1 stating that the letter is not admissible under
Federal Rule of Evidence 408. As Plaintiff argues, however, “statements made during settlement
negotiations are admissible ‘when offered for another purpose,’ Fed. R. Evid. 408(b), such as to
establish ‘an independent violation (here, retaliation) unrelated to the underlying claim which
was the subject of the correspondence.’” Spence v. Foxx, 159 F. Supp. 3d 483, 501 n.9 (D.N.J.
2014) (citing Carney v. Am. Univ., 151 F.3d 1090, 1095 (D.C. Cir. 1998)); accord Reifsteck v.
Paco Bldg. Supply Co., 2005 WL 2674941 (E.D. Mo. 2005) (finding that defendant’s act of
terminating plaintiff during an EEOC mediation was admissible, explaining that “[i]f such
evidence was kept from a jury it would enable employers to retaliate against employees in the
guise of mediation and settlement negotiations.”); UFORMA/Shelby Bus. Forms, Inc. v. NLRB,
111 F.3d 1284, 1293-1294 (6th Cir. 1997) (in unfair labor practice proceeding, evidence that
during settlement discussions, management personnel threatened to retaliate for employees’
engaging in protected activity was admissible).
Here, because Plaintiff does not rely on the August 16, 2016 settlement letter to prove
Defendants’ liability for claims pre-dating that communication, the Court finds that it is not
barred by Rule 408. The Court notes, however, that in so ruling, it takes no position as to
whether the August 16, 2016 settlement letter alone gives rise to an independent claim of
Defendants attach a copy of the letter to their Motion to Dismiss. Because Plaintiff specifically
references the letter in her Complaint, see Doc. 1 ¶¶ 125-126, the Court can consider its contents.
Pension Benefit Guar. Corp. v. White Consol. Indus., 998 F.2d 1192, 1196 (3d Cir. 1993) (“[A]
court may consider an undisputedly authentic document that a defendant attaches as an exhibit to
a motion to dismiss if the plaintiff’s claims are based on the document.”).
retaliation. Given that Plaintiff’s claim of retaliation is based on a number of allegations (see
Doc. 1 at ¶ 159), which, when combined, do state a viable claim of retaliation, the Court finds
that it need not reach this question.
For the reasons stated above, the Court will deny Defendants’ Partial Motion to Dismiss
B. TBC DEFENDANTS’ MOTION TO DISMISS
a. Factual Background
The Court will next consider the TBC Defendants’ Motion to Dismiss (Doc. 7). The only
allegations related to these Defendants are found in Paragraphs 31-43 of the Complaint. Those
allegations are as follows:
Katz Midas is the largest franchisee of Midas auto service locations in the world.
Indeed, Katz Midas owns and operates approximately 115 Midas franchises of the
more than 1,000 Midas locations in the United States.
Resultantly, Katz Midas and Midas, Inc. are substantially intertwined in their
business functions, with Katz Midas having significant clout and influence with
Midas, Inc. maintained the right to inspect and control the work of Katz Midas
and, in particular, the Lower Burrell Midas location.
In fact, representative(s) of Midas, Inc. visited and inspected the Lower Burrell
Midas location to ensure that it complied with standards and requirements set by
Midas, Inc. sets the appearance requirements for the Katz Midas locations.
Midas, Inc. requires Katz Midas stores to have particular contents and inventory.
Midas, Inc. provides national advertising campaigns for the benefit of franchisees,
including Katz Midas.
Midas, Inc. also sets guidelines and requirements regarding the manner in which
Katz Midas operates its store with respect to pricing, advertising, record-keeping,
operating hours, and uniforms.
Midas, Inc. provides training to Katz Midas employees regarding automotive
Midas, Inc. sets quality standards for Katz Midas franchises.
Midas, Inc. also provides training to Katz Midas executives and upper
management regarding the manner in which to operate its locations, which
includes training in employee relations, compliance with anti-discrimination
statutes, handling complaints of discrimination, harassment and retaliation, and
setting store policies.
Indeed, Midas, Inc. provides training to Katz Midas executives/upper
management at its headquarters and also has a field support team of more than 40
employees that provides training and direction to franchisees, including Katz
Midas, regarding business management, customer service and shop operations.
See Doc. 1 at ¶¶ 31-43. In addition, allegation number 4 states that Auto Systems Center,
Inc. (a Katz-family owned entity and not one of the TBC Defendants), is the entity that appeared
on Plaintiff’s paychecks. Id. ¶ 4.
Defendants also attach two documents to their motion to dismiss: an affidavit of Ian M.
Katz (Doc. 7-1, Exhibit A), and the Franchise Agreement between Midas International
Corporation and the Lower Burrell franchise (Doc. 7-1, Exhibit 1). However, the Court will not
consider these documents in deciding the Motion to Dismiss, as Plaintiff did not directly refer to
either the Franchise Agreement or Mr. Katz’s affidavit in her Complaint. Ford Motor Co. v.
Summit Motor Products, Inc., 930 F.2d 277, 284 (3d Cir. 1991).
i. Plaintiff’s Joint Employer Theory of Liability
Because only employers can be liable for discrimination claims under Title VII, Plaintiff
must plead sufficient facts to allege that the TBC Defendants are in fact her employer. To this
end, Plaintiff relies on the doctrine of joint employer liability. In the Third Circuit, “a joint
employer relationship may exist for the purposes of Title VII when ‘two entities exercise
significant control over the same employees.’” Myers v. Garfield & Johnson Enters., Inc., 679
F.Supp.2d 598, 607 (E.D. Pa. 2010) (citing Graves v. Lowery, 117 F.3d 723, 727 (3d Cir. 1997)).
District courts within this Circuit consider three factors in determining whether a joint
employment relationship exists: (1) the alleged employer’s authority to hire and fire employees,
promulgate work rules and assignments, and set conditions of employment, including
compensation, benefits, and hours; (2) the alleged employer’s day-to-day supervision of
employees, including employee discipline; and (3) the alleged employer’s control of employee
records, including payroll, insurance, taxes and the like. Butterbaugh v. Chertoff, 479 F. Supp.
2d 485, 494 (W.D. Pa. 2007). No single factor is dispositive and a weak showing on one factor
may be offset by a strong showing on the other two. Id. at 496-97.
In arguing for joint employer liability, Plaintiff relies almost exclusively on the case
Myers v. Garfield & Johnson Enters, 679 F. Supp. 2d 598 (E.D. Pa. 2010). In Myers, the
plaintiff, an employee of a Jackson Hewitt franchise called Garfield & Johnson (“G&J”), alleged
that she was sexually harassed, assaulted and threatened by a manager of the franchisee. Id.
Applying the factors set out above, the Myers court found that the plaintiff had alleged sufficient
facts to establish a joint employment relationship with Jackson Hewitt. Id. at 607-611. As
discussed below, however, the Court finds that the facts in Myers are distinguishable from those
Regarding the first factor, the Myers court found that the plaintiff pled facts “suggesting
that Jackson [Hewitt] has the authority to ‘promulgate work rules’ and ‘set the conditions of
employment,’” because the plaintiff alleged she was covered by Jackson Hewitt’s sexual
harassment and other workplace policies and because Jackson Hewitt had the authority to require
G&J managers to submit to training and to obey all applicable laws. Myers, 679 F. Supp. 2d at
609-10. The court also relied on the fact that Jackson Hewitt’s Code of Conduct requires
franchisees to fire employees in certain circumstances as evidence that Jackson Hewitt
maintained significant control over hiring and firing decisions. Id.
Here, in contrast, Plaintiff has not alleged that the TBC Defendants had any authority
regarding hiring and firing decisions or that she was subject to any of the TBC Defendants’
workplace policies. Plaintiff does allege that the TBC Defendants provided various trainings for
Katz Midas executives and upper management, including discrimination and harassment
training. Doc. 1 at ¶ 42. She also alleges that the TBC Defendants provided training to Katz
Midas employees regarding automotive services, and maintained the right to inspect the Lower
Burrell Midas. Doc. 1 at ¶¶ 34, 40. However, in the absence of some indication that the TBC
Defendants had the ability to hire and fire Plaintiff, to control her compensation, benefits, and
hours, or to promulgate work rules and assignments, the Court finds that the first factor does not
support a joint employment relationship.
Regarding the second factor, day-to-day supervision of employees, the Myers court relied
on the plaintiff’s allegations that Jackson Hewitt reviewed all tax returns prepared by employees
prior to filing, assisted employees with problems with tax returns and the computer system, and
required that the plaintiff undergo specific training, and monitored the completion of such
training. Myers, 679 F. Supp. 2d at 610. Here, Plaintiff does not allege that the TBC Defendants
had any control over her daily work or that they had any authority to discipline her. Although
Plaintiff does allege that TBC provided training to Katz Midas employees, she does not allege
that she ever participated in, or could be required to participate in, such trainings. Additionally,
she does not allege that she had any interactions with the TBC Defendants or their employees. In
the absence of such allegations, the Court finds that Plaintiff has not established any basis for
finding joint employer liability under the second factor.
Finally, with respect to the third factor, the Myers court relied on the plaintiff’s allegation
that Jackson Hewitt “assumed some degree of control over G&J employee records.” Myers, 679
F. Supp. 2d at 610. Citing to Graves, the Myers court noted that, even when an alleged employer
does not pay the employee’s salary, that is not determinative of whether a joint employment
relationship exists. Id. In Graves, the Third Circuit held that court employees, while paid by the
county, were still employees of the court because the court “has the inherent right to hire,
discharge and supervise” the employees. Graves, 117 F.3d 723 at 727. Here, Plaintiff does not
allege that the TBC Defendants paid her salary or that they had the inherent right to hire,
discharge or supervise her. To the contrary, she alleges that Auto Systems Centers, Inc. is the
Katz-family owned entity that appeared on her paychecks. Doc. 1 at ¶ 4. Plaintiff does allege
that TBC “sets guidelines and requirements regarding the manner in which Katz Midas operates
its store with respect to pricing, advertising, record-keeping, operating hours, and uniforms.”
Doc. 1 at ¶ 39. However, this seems to refer to the franchise’s financial records, and there are no
allegations that TBC had any substantial control or even knowledge regarding Plaintiff’s
employee records including payroll, insurance, or taxes. Therefore, the Court finds that
Plaintiff’s allegations constitute, at best, a weak showing under the third prong.
The crux of a joint employer claim is that multiple entities exercise significant control
over the same employee. Graves, 117 F.3d at 727 (emphasis added). Here, it appears that the
Lower Burrell store and various Katz entities retained almost all control over Ms. Harris’s
employment. Plaintiff has not alleged that the TBC Defendants had any authority to: hire or fire
her, promulgate work assignments, control her compensation, benefits, or hours, supervise her
day-to-day work, discipline her, pay her salary, or manage her employee records. Therefore, the
court finds that Plaintiff has not pled sufficient facts to demonstrate a plausible basis for joint
employer liability against the TBC Defendants.
ii. Agency and Vicarious Liability
Plaintiff also has failed to establish the TBC Defendants’ liability under an agency or
vicarious liability theory.
The parties agree that, in case law interpreting agency or vicarious liability in the
franchise context, the decisive issue is whether a franchisor exercises control over the
franchisee’s business operations. See, e.g., Drexel v. Union Prescription Centers, Inc., 582 F.2d
781, 785-786 (3d Cir. 1978) (“Whether the control retained by the franchisor is . . . sufficient to
establish a master-servant relationship depends in each case upon the nature and extent of such
control as defined in the franchise agreement or by the actual practice of the parties”). In Drexel,
for instance, the Third Circuit recognized that allegations that a franchisor “reserved the right to
control numerous specific facets of the franchisee’s business operation, ranging from the
appearance and contents of the store, its advertising and promotional programs, and its
accounting, inventory, and record-keeping systems, to the minimum number of weekly operating
hours, the type of prescription labels and files, personnel uniforms, and the color of delivery
trucks” may only “evidence [the franchisor’s] concern with the ‘result’ of the store’s operation
rather than the ‘means’ by which it was operated.” Drexel, 582 F.2d at 788-89. However, the
Court found that “other provisions of the [franchise agreement] are so nebulously and generally
phrased as to suggest that [the franchisor] retained a broad discretionary power to impose upon
the franchisee virtually any control, restriction, or regulation it deemed appropriate or
warranted,” and thus created a triable question of fact regarding the franchisor’s liability.
Drexel, 582 F.2d at 788-89. Likewise, in Myers, the court held that the plaintiff had pled
sufficient facts to establish a plausible claim for agency liability when she pled that Jackson
Hewitt required G&J and its employees to submit to training, required G&J to implement a “zero
tolerance” policy for certain employee behavior, and published mandatory codes of conduct that
included policies on diversity and non-discrimination. Myers, 679 F. Supp. 2d at 612. Citing
Drexel, the court also noted the presence of a broad clause in the franchise agreement that
granted Jackson Hewitt authority to promulgate policies and thereby control day-to-day
Here, Plaintiff alleges that the TBC Defendants set guidelines and requirements regarding
appearance, inventory, advertising, pricing, record-keeping, operating hours, uniforms, and
quality standards. (Doc. 1 ¶ 39). Such allegations align almost word for word with the
allegations the Drexel court conceded concern only the results and not the manner of the work
performed. Those allegations are common to almost all franchise agreements, and represent the
kind of controls inherent in a franchise relationship. See Myszkowski v. Penn Stroud Hotel, Inc.,
430 Pa.Super. 315, 634 A.2d 622, 627 (1993) (holding that the franchise system controls
imposed by Best Western “addresse[d] the result of the work and not the manner in which it is
conducted.”). As discussed, Plaintiff does allege that the TBC Defendants provided various
training to Katz employees and executives, similar to Myers; however, the other facts relied on
by the Myers court as described above were not alleged in this case. Training employees, absent
more allegations of day-to-day control, is insufficient to state a claim for vicarious liability.
In sum, the Court finds that Plaintiff has not pled sufficient facts to state viable claims
against the TBC Defendants, and thus will dismiss her claims against these Defendants without
prejudice to Plaintiff filing an Amended Complaint. 2
If Plaintiff elects to amend her complaint, she may consider attaching the Franchise Agreement
attached to the TBC Defendants’ Motion to Dismiss. Although the Court expresses no opinion
as to whether that agreement, on the whole, supports Plaintiff’s claim of joint employment and/or
vicarious liability, it notes that Section 6.15 appears similar to the broad clauses discussed in
For the reasons stated above, the TBC Defendants’ Motion to Dismiss (Doc. 7) is
GRANTED and the Defendants’ Motion to Dismiss (Doc. 10) is DENIED. Consistent with the
foregoing, the Court hereby DISMISSES WITHOUT PREJUDICE all claims against the TBC
If Plaintiff wishes to file an Amended Complaint, she must do so on or before August 24,
2017. Should no Amended Complaint be filed by August 24, 2017, the Court will dismiss all
claims against the TBC Defendants WITH PREJUDICE. Defendants shall answer or otherwise
respond to the Amended Complaint (or, if no Amended Complaint is filed, to the Complaint) on
or before September 7, 2017.
IT IS SO ORDERED.
August 10, 2017
United States District Judge
CC (via ECF email notification):
All Counsel of Record
Drexel and Myers, as it grants Midas International the authority to promulgate work policies at
the Lower Burrell store. (Doc. 7-1, Exhibit 1 at ¶6.15).
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