'Single Employer' Title VII Issue in Franchisor-Franchisee case for Berryhill Hot Tamales

In a matter regarding when a franchisor can be potentially held liable for the acts of one of its independent franchisees, our team obtained summary judgment for a restaurant franchisor, Berryhill Hot Tamales. The U.S. Equal Employment Opportunity Commission (EEOC) filed a lawsuit on January 24, 2012 that included claims under Title VII of the Civil Rights Act of 1964 (Title VI) against Simbaki, Ltd. (Simbaki), an entity that acquired the franchise rights to operate Berryhill Baja Grill & Cantina restaurants. On March 1, 2012, two individuals who had worked for Simbaki at one of its franchise restaurants (intervenors) intervened into the EEOC’s lawsuit, initiating claims against Simbaki (similar to those filed by the EEOC), but added the franchisor to the lawsuit based on its franchisor/franchisee relationship with Simbaki. On May 29, 2012, the Court granted the franchisor’s motion for summary judgment, dismissing the claims against it.