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Vicarious Liability

By Gary S. Kessler and Philip G. McNicholas

Nearly everyone has heard of the famous lawsuit in which a New Mexico woman sued McDonald's and was awarded several hundred thousand dollars after she spilled “too-hot” coffee on her lap, causing third-degree burns. In contrast, probably very few people know why she could sue the McDonald's corporation, even though the coffee was prepared and served by a McDonald's franchisee employee. The answer is vicarious liability.

Generally, when deciding whether to impose vicarious liability against a franchisor for acts of its franchisee's employees, courts measure the franchisor's control of franchisee operations. For instance, in the “hot coffee” lawsuit, the franchisor (the McDonald's corporation) was liable because it was the corporation ' not the specific franchise ' that mandated that coffee was to be served served at 180 to 190 degrees Fahrenheit. But franchisor control is not always so clear and straightforward.

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