The Supreme Court of Texas recently ruled that franchisor Massage Heights did not owe a duty of care to a massage customer who alleged a sexual assault, because, among other reasons, Massage Heights had neither the contractual right to control nor did it exert actual control of the employment decisions of the franchisee. Massage Heights Franchising, LLC. v. Hagman, 2025 WL 1271296 (Tex. May 2, 2025).
Plaintiff Danette Hagman sued a massage therapist, franchisee MH Alden Bridge, LLC and Massage Heights for negligence, negligent undertaking, and gross negligence arising from a sexual assault. Specifically, Hagman alleged that the therapist sexually assaulted her during a massage that took place at a Massage Heights franchise. At trial, the jury found Massage Heights liable for negligence and negligent undertaking. The jury awarded $1.5 million in damages and $1.8 million in exemplary damages and apportioned 15% of the responsibility to Massage Heights. However, the jury also answered “no” when asked whether franchisee MH Alden Bridge was subject to the control of Massage Heights. An appellate court later reversed the award of exemplary damages but otherwise affirmed the trial court, holding that Massage Heights owed a duty of care to MH Alden Bridge’s customers, including Hagman, as a matter of law because it controlled MH Alden Bridge’s operations. Massage Heights petitioned the Supreme Court for review.
The Supreme Court reversed the appellate court’s ruling on Massage Heights’ duty of care to MH Alden Bridge’s customers, reasoning that: (1) the franchise agreement gave Massage Heights no contractual right to control its franchisee’s hiring of the massage therapist, (2) safety guidelines in Massage Heights’ operations manual did not establish the requisite degree of control over the hiring decision, which was the proximate cause of the injury, and (3) Massage Heights did not actually control MH Alden Bridge’s decision to hire the massage therapist. The court also determined that Massage Heights had no duty to refrain from entering into a franchise agreement with the franchisee or terminate the parties’ franchise agreement despite knowledge of, among other things, prior reports of sexual misconduct at franchise locations. The court likewise rejected Hagman’s theory that Massage Heights engaged in a negligent undertaking, reasoning that “all safety responsibilities were contractually assigned to MH Alden Bridge, so Massage Heights did not undertake to keep Hagman safe.”
*Frankie Barth is a Summer Associate for Lathrop GPM who contributed to the writing of this post.
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