Texas Supreme Court Limits Franchisor Liability in Franchisee Sexual Assault Case
On May 2, 2025, the Texas Supreme Court held that a franchisor owes no duty of care for injuries caused by a franchisee’s employee unless the franchisor retained or exercised control over the hiring of that employee.
Background
In 2017, Danette Hagman was sexually assaulted by a massage therapist named Mario Rubio at a Massage Heights franchisee, a company called MH Alden Bridge (“Alden Bridge”). Rubio was licensed to perform massage therapy in the state of Texas despite having a criminal record. Alden Bridge hired Rubio in compliance with Texas law and its franchise agreement with Massage Heights.
After the assault, Hagman sued Alden Bridge, Massage Heights, and several other related parties, asserting claims of negligence and negligent undertaking.
The jury found all defendants negligent. Massage Heights appealed to the court of appeals, which upheld the trial court’s finding of liability, and then to the Texas Supreme Court, which granted the petition for review.
Texas Supreme Court’s Analysis
The Texas Supreme Court reversed, finding that Massage Heights owed no duty of care to Hagman. The Court’s reasoning centered on Massage Heights’ lack of control over Alden Bridge’s hiring decisions. To establish a duty of care and be found liable, Massage Heights needed to have had either contractual or actual control over MH Alden Bridge’s hiring decisions.
The franchise agreement asserted Alden Bridge was an independent contractor with full control over hiring decisions and, thus, Massage Heights did not retain control sufficient to be found liable for Rubio’s actions. Additionally, the Court explained that there was no evidence that Massage Heights exercised any control over the hiring of Rubio specifically.
The Court explained that although Massage Heights provided some safety and operational guidance to franchisees, it did not exercise control over the specific task of hiring and, thus, was not liable.
Key Takeaways
- Franchisors are not liable for the misconduct of a franchisee’s employees absent control over the specific practice (here, hiring) that caused the harm.
- Franchisors can protect themselves from liability for harm caused by franchisee employees by contractually delegating hiring responsibilities to the franchisee.
Special thanks to JJ Gramlich, a summer associate in Foley’s Dallas office, for her contributions to this article.
