Pizza Hut CaseQuestion 6: Pizza Hut Case: Is the franchisor or franchisee responsible for sexual harassment? If so, what type of sexual harassment is it? Please explain your answer completely. In this case, the franchisee is responsible for the hostile work environment type of sexual harassment. However, the franchisor should not be held liable unless it can be proven that it exercises central control over the day-to-day employment decisions of the subsidiary. I assume the franchisee is independently owned and the franchisor has no control over its employment relationships and no control over its finances. In cases like this, a key element in determining liability is which entity made the decision to hire the person making the claim. Factors considered in determining the existence of an illegal and hostile work environment include: frequency of the behavior, severity of the behavior, any physical threats or humiliation (as opposed to simple offensive remarks), and unreasonable interference of conduct with the employee's job performance. Situations that may be considered hostile work environment sexual harassment are those where the employee's work environment is made intimidating, hostile or offensive because of unwelcome sexual behavior and that behavior interferes in a manner unreasonable with the employee's job performance. That case says the waitress was harassed by the two male customers before the Nov. 6 event and informed her manager that she didn't like waiting for them, but did not explain why. Although she did not give the reason why she did not want to serve customers, a responsible manager reportedly questioned the waitress to find out her reason. A responsible manager would also have assigned someone else to wait for customers and/or ask customers to leave the premises. The physical nature of the conduct in this case, although limited to a single incident, was severe enough to create an illegal and hostile work environment. The Equal Employment Opportunity Commission (EEOC) has issued regulations that state employers are responsible for harassment of non-employees and have a responsibility to prevent and take action when they have or should have known about the harassment. In this case, the waitress informed her manager that one of the customers had pulled her hair and asked the manager to find someone else to serve him. The manager rejected her request and asked her to wait for them and said, “You were hired to be a waitress.”.