Antitrust Law Daily Wrap Up, FRANCHISING & DISTRIBUTION—S.D. W.Va.: Injured employee’s claims against franchisor survive motion to dismiss, (Sep 23, 2014)

By Edward L. Puzzo, J.D.

In action brought by an injured employee of a Hardee’s franchised restaurant against both the franchisees and franchisors of the restaurant, the claims against the franchisors could not be dismissed because they had actual knowledge of alleged unsafe working conditions and their provision of the equipment and safety procedures in place at the restaurant made the employee a foreseeable plaintiff, the federal district court in Charleston, West Virginia has ruled (Hamrick v. Restaurant Management Group, LLC, September 19, 2014, Johnston, T.).

Nathaniel Hamrick, now deceased, was employed at a Hardee’s franchised restaurant in West Virginia when he sustained first and second degree burns from spilled hot grease while in the process of manually cleaning a fryer box.

Restaurant Management Group, LLC and Restaurant Management Group of West Virginia, LLC were the franchisees of the restaurant where Hamrick’s injuries occurred. CKE Restaurants, Inc., Hardee’s Restaurants, LLC, and Hardee’s Food Systems LLC were the restaurant franchisors.

Deliberate intent workplace injury. Paula Hamrick, on behalf of Nathaniel Hamrick’s estate, brought various claims against the above named franchisees and franchisors, including allegations of a deliberate intent workplace injury under W. Va. Code §23-4-2(d)(2)(ii). Under that section of the West Virginia Code, a plaintiff had a cause of action against the employer for damages in excess of those receivable under the workers’ compensation statute when deliberate intent was shown.

The franchisor defendants moved to dismiss, arguing that Hamrick had not pleaded any facts demonstrating that the franchisors were, in fact, Hamrick’s employers. Hamrick countered that the franchisors “were in the business of operating and managing Hardee’s restaurants[,] such as providing employment,” including at the Hardee’s restaurant where Nathaniel Hamrick worked at the time of his injuries.

The franchisors also argued that Hamrick had not pleaded any facts demonstrating that the franchisors had any knowledge of the alleged unsafe working conditions. Hamrick countered that the frying machine’s pump and filter had been broken for a significant period of time, necessitating the manual cleaning which led to Hamrick’s burn injury, and that there had been prior complaints about issues associated with manually cleaning the fryer box.

The court ruled that, on a motion to dismiss, it was reasonable to infer from these allegations, as well as from the franchisor’s alleged status as the Hardee’s restaurant’s operator, that the franchisor had actual knowledge of alleged unsafe working conditions which were of long standing and much complained about at the Hardee’s franchise in question. The court therefore denied the defendants’ motion to dismiss the deliberate intent claim.

Negligence. Hamrick also argued that, to the extent the defendants were not the plaintiff’s employer, but were otherwise involved in the operation and management of the restaurant, they were liable to plaintiff for negligence.

The basic elements of a negligence claim are duty, breach of that duty, causation, and damages, the court noted. The franchisors argued that they lacked control over the daily operations of the restaurant and therefore had no legal duty owed to Hamrick, so the negligence claim should be dismissed.

The court disagreed. While the franchisors focused on the degree of control required for franchisor liability, the court stated, Hamrick’s allegations were that the franchisor provided training, supervision, inspections, equipment, cooking supplies and procedures in furtherance of the operation of the restaurant. It is reasonable to infer from these allegations, the court continued, that the franchisors had control over the equipment and procedures which contributed to Hamrick’s injury and that their conduct created a risk of physical harm to Hamrick. The defendants owed Hamrick a common-law duty to exercise reasonable care, and his alleged injury as a result of using the equipment and safety procedures in place at the restaurant made him a foreseeable plaintiff, the court stated. Thus the negligence claim should not be dismissed, the court ruled.

The case is Civil Action No. 2:14-cv-02762.

Attorneys: Christopher L. Brinkley (The Masters Law Firm) for Paula Hamrick. Denielle-Jacqueline Marie Stritch (Steptoe & Johnson) for Restaurant Management Group, LLC, Restaurant Management Group of West Virginia, LLC, CKE Restaurants, Inc., Hardee's Restaurants, LLC, and Hardee's Food Systems, LLC. Ronda L. Harvey (Bowles Rice McDavid Graff & Love) for Frymaster, LLC.

Companies: Restaurant Management Group, LLC; Restaurant Management Group of West Virginia, LLC; CKE Restaurants, Inc.; Hardee's Restaurants, LLC; Hardee's Food Systems, LLC; Frymaster, LLC

Cases: FranchisingDistribution WestVirginiaNews