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Subway faces $50M suit for sexual abuse at franchisee

The suit alleges that Subway’s ability to inspect restaurants and other forms of control over operations make it a joint employer with franchisee GRB Investments.


A former employee of Subway franchisee GRB Investments is suing the operator and the brand for $50 million in damages after she was repeatedly drugged and raped by her supervisor, according to a lawsuit filed in the U.S. District Court for the District of North Dakota in February. The suit argues Subway acted as a joint employer for the manager in question.


Zeferino Carlos Rangel was already a convicted sex offender at the time he worked as the former employee’s supervisor at a North Dakota Subway in 2022, when she was a minor and a high school student. He later pleaded guilty to the charges stemming from his abuse of her and was sentenced 25 years in prison.


The case is similar to recent cases involving Rice Enterprises, a McDonald’s franchisee, and Charter Foods, a Taco Bell franchisee, in which teenage girls sued their employers after the operators in question employed registered sex offenders as managers, who then harassed or assaulted the employees. In the Rice case, plaintiff and the franchisee agreed to a $4.35 million settlement; Charter Foods appears to be ongoing.


The plaintiff’s attorneys argue that Subway is liable in part because of the forms of control it can exercise over franchisees, including through its systems of inspections and a requirement that franchisees keep Subway appraised of the identity of designated managers. Because the plaintiff was hired through a centralized Subway hiring website, she had reason to believe she was working for Subway as a corporate employer, the suit states.


Subway filed a motion to dismiss the case on March 15, arguing that the plaintiff failed to show Subway bore responsibility for her working conditions in part because the website through which she was hired is owned by a purchasing collective of franchisees, rather than the global franchisor. The brand’s attorneys further argue that the plaintiff failed to show that Subway “actually committed or is responsible for any specific wrongdoing.” As of March 19, the court had not ruled on the motion to dismiss. “[Subway] exercise[s] their authority over their franchisees much the same way any large business exercises control over regional and local operations,” the complaint states. 


The suit also argues Subway and GRB failed to provide any training to the plaintiff regarding sexual harassment or assault and that the brand’s employee training says employees who have disagreements with their managers “must try to get along with them in order to maintain a pleasant atmosphere.”


According to the complaint, the plaintiff was instructed to obey Rangel as part of her training early on at Subway. Rangel, while working as the plaintiff’s manager, pressured her into trying cocaine and methamphetamine when she expressed that she was exhausted by her job and academic endeavors. The suit alleges she became addicted to those stimulants, which eventually led to the plaintiff being kicked out of her house. Rangel repeatedly coerced her into sex in exchange for drugs; raped her at work and outside of work; threatened to fire her and to kill her relatives if she did not acquiesce; and filmed instances of the aforementioned abuse. The plaintiff also claims that the store’s general manager instructed the plaintiff to drive Rangel to and from work after his driver’s license was revoked. 


The plaintiff expressed discomfort with her working conditions to the general manager, but was not transferred. The abuse ended only when the plaintiff told school authorities what was happening after her attendance dropped off, leading to Rangel’s arrest. 


The lawsuit also notes that Subway stores have had similar troubles in the past, highlighting nine publicly reported instances from 2013 to 2023 in which Subway managers or employees sexually assaulted or otherwise harassed teenage workers or prospective employees and one case in which the age of the victim is not apparent from media reports. The wife of ex-Subway spokesman, Jared Fogle has also alleged that the company knew Fogle was a sexual predator, an allegation repeated by a franchisee


Subway did not respond immediately to a request for comment on the case.


Source: Restaurant Dive



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