USA – ILLINOIS Law and Practice Contributed by: Carmen D. Caruso, Bill Whitner and Gage Meyers, Carmen D. Caruso Law Firm
v GTE Sylvania Inc , 433 US 36, 54–56 (1977); Leegin Creative Leather Prods , Inc v PSKS , Inc , 551 US 877, 889–92 (2007). Resale price maintenance is treated somewhat dif - ferently: the US Supreme Court in Leegin held that minimum resale price maintenance is subject to the rule of reason rather than per se illegality. See 551 US at 881, 885–92. State antitrust laws may impose strict - er requirements, however, so minimum resale price restrictions should be evaluated under both federal and applicable state law. 7. Joint Employer Risk and Vicarious Liability 7.1 Joint Employer Laws Illinois courts generally do not treat a franchisor as the employee of its franchisee’s workers merely because it owns the franchise system, sets brand standards or monitors compliance with the franchise agreement; the key enquiry is the extent of the franchisor’s con - trol over the franchisee’s day-to-day operations or the specific employment conditions at issue. In Coty v US Slicing Machine , the court affirmed a directed verdict for the franchisor because it could not hire, fire, super - vise or issue orders to the franchisee’s employees, notwithstanding extensive operating requirements to protect the brand. See 58 Ill App 3d 237 (1978). The general right to make suggestions, inspect the prem - ises, or terminate the agreement did not, by itself, make the franchisor a joint employer. See id at 243; see also Wise v Ky Fried Chicken Corp , 555 F Supp 991, 995 (DNH 1983). Illinois courts have nevertheless imposed, or permit - ted claims seeking, liability where a franchisor affirm - atively undertook responsibility for employee safety. In Decker v Domino ’ s Pizza , Inc , 268 Ill App 3d 521 (1994), the court upheld a verdict for a franchisee employee injured during a robbery because the fran - chisor had developed mandatory security procedures and taken affirmative steps to ensure compliance. Similarly, Lawson v Schmitt Boulder Hill , Inc , 398 Ill App 3d 127 (2009) allowed a franchisee employee’s negligence claim to proceed past the pleading stage based on allegations that McDonald’s mandated and
monitored compliance with workplace-security proce - dures, though Lawson did not determine that McDon - ald’s owed or breached a duty. Illinois has also upheld franchisor liability outside the employee-claim context. In Bruntjen v Bethalto Pizza , LLC , 2014 IL App (5th) 120245, the court affirmed a verdict holding a franchisor directly and vicariously lia - ble for injuries caused by a franchisee’s delivery driver, based on delivery and driver-safety requirements that extended beyond general brand protection. Because the plaintiff was a third-party motorist rather than a franchisee employee, however, Bruntjen is instructive on control and assumed duties but is not itself a joint- employer decision. For franchisors, the practical distinction is straight - forward: control the brand, not the employee. Agree - ments and operating manuals should preserve the franchisee’s responsibility for hiring, compensation, scheduling, discipline, supervision and termination, since unnecessary involvement in day-to-day employ - ment decisions can create evidence of the control needed to support joint-employer or vicarious liability. 7.2 Vicarious Liability A franchisor may be vicariously liable for loss or damage caused by a franchisee acting as its actual or apparent agent. Whether an agency relationship exists is ordinarily a question of fact, though it may be resolved as a matter of law where the facts are undisputed. Actual Agency Actual agency depends on whether the franchisor has the right to control the “operative details” or day- to-day operations of the franchisee’s business that caused the injury; characterising the franchisee as an independent contractor is relevant but not dispositive, and courts examine the parties’ actual relationship and the franchisor’s retained authority. Controls intended to protect trade marks, goodwill and system-wide quality generally do not establish an agency relationship. In Coty v US Slicing Machine Co , 58 Ill App 3d 237, the franchisor imposed numerous operating requirements but did not retain day-to-day supervisory control and could not hire, fire or direct the
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