Friday, March 27, 2009

Franchisor Owed No Duty of Care to Injured Franchise Employee

This posting was written by Pete Reap, Editor of CCH Business Franchise Guide.

A franchisor of tire businesses owed no duty of care to an employee of one of its franchisees who was injured at work when a tire he was retreading exploded, the U.S. Court of Appeals in St. Louis has ruled. Thus, a federal district court's ruling—granting summary judgment in favor of the franchisor on the employee's claims—was affirmed.

The employee alleged that his injuries were proximately caused by the franchisor's negligent inspection of the regulator controlling air pressure at the curing rim station where he was working and the failure to warn the franchisee of its dangers.

Control Over Franchise Operations

The employee asserted that the franchisor owed him a duty of care because it (1) "retained control" over the operations of its franchisee and (2) assumed a specific duty to protect the employee from this dangerous condition by conducting annual safety inspections of the franchisee's operations.

The franchisor had nothing resembling the detailed control over the operative details of the work performed by the employee that was required to create a general duty of care to the employee, the court held. The franchisee purchased and set up the compressed-air system and developed and imposed its own safety standards regarding the use of compressed air, and the franchisor inspected the equipment only once each year.

Voluntary Assumption of Duty

In addition, the franchisor did not voluntarily assume a specific duty of care to the franchisee or its employees when one of the franchisor's employees conducted a routine annual safety inspection of the franchisee's operations eight months prior to the accident, according to the court.

There was no assumed duty because: (1) there was no evidence the franchisor's employee knew of any malfunction or dangerous condition affecting the air-pressure regulator; (2) even if the franchisor's employee failed to detect a malfunction, that did not increase the risk of harm that already existed; and (3) there was no evidence that the actions of the franchisor or its employee caused the franchisee or its employees not to take their own measures to ensure that the compressed air system was working properly.

The March 3 not-for-publication opinion is Schreyer v. Bandag, Inc., CCH Business Franchise Guide ¶14,091.

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