Labor & Employment Law Daily Wrap Up, COVERAGE, LIABILITY—W.D. Va.: Racial discrimination claims against McDonald's dismissed for lack of specific workplace control, (Apr 14, 2025)

By Justin Marcus Smith, J.D.

Allegations that described a standard franchisor-franchisee relationship with brand consistency enforcement failed to show direct control over workplace conditions pertinent to this complaint.

A former McDonald's USA, LLC franchise employee who asserted claims of racial discrimination failed to allege sufficient facts to show that McDonald's exerted requisite control over her employment, at least not on the facts alleged in this matter, found the federal district court in Roanoke, Virginia. Among other insufficiently pleaded circumstances, operational policies and brand standards did not suffice to show the level of control needed for joint employer liability. The court accordingly dismissed all of the terminated employee's Title VII, 42 U.S.C. § 1981, and Virginia Human Rights Act (VHRA) claims against McDonald's. The court also dismissed similar racial discrimination claims against a natural person member or manager of the franchisee because he was not an "employer" for VHRA purposes. However, essentially identical racial discrimination claims asserted against that manager under 42 U.S.C. § 1981 survived dismissal. All § 1981 and VHRA claims against the franchisee entity also survived dismissal (Edmonds v. McDonald's USA, LLC, No. 7:24-cv-00308-RSB-CKM (W.D. Va. Apr. 9, 2025)).

Background. Edmonds, a Black woman former employee of a Virginia McDonald's franchise, sued McDonald's USA, LLC (McDonald's), franchisee Cullen Management LLC (Cullen Management), and Cullen's member or manager Eric Cullen (Cullen). Edmonds filed a nine-count complaint that asserted racial discrimination, racial harassment, hostile work environment, and retaliation claims under Title VII of the Civil Rights Act of 1964 (McDonald's and Cullen Management, only); 42 U.S.C. § 1981 (all defendants); and the Virginia Human Rights Act (VHRA) (all defendants).

Specifically, Edmonds alleged that she and other Black employees routinely endured customer racial slurs in the presence of Cullen LLC managers. She also alleged that customers often refused to touch the hands of Black employees while exchanging change or payment cards. She said the customers did not behave that way with White employees, and at least some of allegations of the complaint apparently pre-dated the COVID-19 pandemic. Moreover, Edmonds alleged that White employees sometimes addressed Black employees in an inappropriately familiar and colloquially derogatory manner involving the use of a racial epithet. Edmonds said managers were aware of the conduct, and knew it was distressing to the Black employees, but failed to do anything about it.

Edmonds also alleged there was a notable decline in the number of Black employees while she worked at the restaurant. She said Cullen LLC or its managers treated Black employees disparately, and that one of the managers even allegedly admitted that Cullen LLC fired multiple Black employees because of their race. Edmonds said Cullen LLC ultimately terminated her after she and other Black employees refused to remove their Black Lives Matter face masks, even though other employees were permitted to wear masks with various designs, including one involving a Washington Redskins logo and another displaying a rainbow design. Edmonds said she performed her job satisfactorily and that Cullen LLC did not give a valid reason for discharge.

McDonald's moved for dismissal of all claims against it. McDonald's argued that Edmonds did not plausibly allege it could be held responsible under either a joint employer or an actual/apparent agency theory of liability.

The Cullen defendants contended Edmonds failed to state racial discrimination and retaliation claims under both Title VII and § 1981 and all of her VHRA claims. The Cullen defendants moved for partial dismissal of those claims only.

The court granted McDonald's motion to dismiss all claims against it, and it also dismissed the VHRA claims against the individual Cullen defendant, but it declined to dismiss any of the other claims against the Cullen defendants. Edmonds did not assert a Title VII claim against individual defendant Cullen.

Joint employer liability. The court found Edmonds failed to allege non-conclusory facts showing that McDonald's controlled her employment. Accordingly, the court held that she failed to support her claim of joint employer liability for her Title VII, § 1981, and VHRA claims. The central question was whether it was plausible that McDonald's, in a light most favorable to Edmonds, exercised sufficient control to be a joint employer under any of the pertinent statutes.

The court applied the Fourth Circuit Butler test to assess joint employer liability based on Edmonds' control allegations. See Butler v. Drive Auto. Indus. of America, Inc., 793 F.3d 404, 408 (4th Cir. 2015). The court explained that none of the nine Butler factors are dispositive, but the first three, i.e., hiring and firing authority, day-to-day supervision, and furnishing of workplace equipment "are the most important." The court continued that courts have "reached differing conclusions" on whether other factors, like corporate oversight, are sufficient for finding joint employer under Title VII. Some courts in the Eastern and Western federal districts of Virginia have found that determination of joint employer status is just too fact-intensive on a motion to dismiss.

Edmonds argued that McDonalds' controlled the restaurant operations through corporate oversight; comprehensive policies and manuals; mandatory use of certain computer systems generating employee schedules and assignments; comprehensive training of all employees, including management; and, involvement in hiring and firing decisions.

The court concluded that Edmonds' allegations did not show that McDonald's controlled her employment. In the view of the court, she did not show that McDonald's had authority to hire or fire her, at least not apart from a general assertion that it oversaw the disciplining and firing of workers. The court found that general assertion too conclusory to show that McDonald's played an actual role in any of the hiring or firing decisions in this case.

Second, the court found Edmonds did not show any McDonald's supervision of her daily work. Operational policies and brand standards did not suffice to show the level of control needed for joint employer liability. Third, Edmonds did not say enough about furnishing of workplace equipment. The court said Edmonds' other allegations about computer systems and uniform were "likewise overly broad and conclusory."

Agency liability. The court also found that Edmonds failed to allege sufficient facts to establish a plausible agency relationship with respect to McDonald's. Under Virginia law, actual or apparent authority might suffice for a finding of agency. Edmonds bore the burden of pleading control, the defining agency characteristic, but the court concluded she did not carry that burden.

The court already explained that Edmonds failed to plead more than conclusory allegations of actual McDonald's control over daily operations or personnel management at the franchise. Turning next to apparent agency, the court found Edmonds did not identify anything that could have reasonably led her to believe that McDonald's authorized or endorsed the alleged discrimination and harassment. The court opined that imposing liability on McDonald's based on a mistaken employee belief of control would stop McDonald's from asserting a defense available to actual employers with the means to prevent or correct workplace harassment.

Racial discrimination. The court found Edmonds succeeded in pleading disparate treatment based on allegations of increased work, heightened employment standards, and harsher disciplinary actions, especially with respect to alleged termination for wearing the Black Lives Matter masks, as applied to Black employees at the franchise. The court noted the Fourth Circuit has stated that a plausible allegation of a specific discriminatory action will survive a motion to dismiss even if there is a more plausible alternative explanation. The court found Edmonds pleaded racial discrimination causes of action that amounted to more than mere speculation. The court accordingly declined to dismiss the racial discrimination claims under Title VII against Cullen Management and the other racial discrimination claims under § 1981 and the VHRA against all of the Cullen defendants.

Retaliation. The court held that Edmonds sufficiently pleaded retaliation claims to survive the Cullen defendants' motion to dismiss. The court found that Edmonds' alleged immediate termination after her refusal to remove her Black Lives Matter mask pointed to temporal proximity with protected activity. The court said the complaint also included additional allegations suggesting retaliatory animus.

VHRA. The court held the VHRA did not pertain to Cullen, a natural person who was not an "employer" for VHRA purposes. The court accordingly dismissed the racial discrimination, racial harassment, hostile work environment, and retaliation claims under the VHRA as asserted against Cullen, only.

The Case is No. 7:24-cv-00308-RSB-CKM.

Judge: Ballou, R.

Attorneys: Carrol Mullen Ching (Fishwick & Associates PLC) for Trenessidahsaan Edmonds. Charlene Andree Barker (Buchanan Ingersoll & Rooney PC) for McDonald's USA, LLC.

Companies: McDonald's USA, LLC

Cases: CoverageLiability RaceDiscrimination Discrimination Procedure VirginiaNews