Potential Liability for Third Party Harassment

It's not just your own employees that can get you sued for harassment. An employer can be sued for sexual third party harassment arising out of conduct committed by customers, suppliers, joint venturers, and other third parties that interact with their workforce.  A recent Fourth Circuit case reinforced the concept that employers can be liable for the harassing conduct of third parties if the employer knew or should have known of the conduct and failed to take remedial measures.

In Freeman v. Dal-Tile Corp., the harassed employee was a customer sales representative for Dal-Tile and the alleged harasser was a sales representative for a Dal-Tile customer. The two individuals interacted on a regular basis over a three-year period, and there were numerous sources of testimony that the harasser regularly made crude sexual remarks and racially insensitive comments in the presence of the employee and other co-workers (including the employee's supervisor). The employee and the employee's supervisor asked the harasser to stop, the employer temporarily banned the harasser from the Dal-Tile facility, and eventually permitted him to return to the facility but precluded him from interacting with the employee. Yet these steps were not enough to avoid liability because the Court of Appeals, citing the three-year period over which the conduct occurred, believed that Dal-Tile's response was neither prompt enough nor adequate enough.

For many businesses, the last thing they want to do is create tension or an awkward situation with a customer. Most businesses would dread having to go to its largest customer and tell them that one of their employees--or worse yet, a principal or owner--is engaging in unwelcome harassing behavior. Yet in order to protect itself from liability to its employees, an employer may have to risk jeopardizing the customer relationship and address such issues with a customer that is engaging in harassing conduct.

The Dal-Tile case emphasizes the importance of having a strong anti-harassment policy, training your supervisors to recognize and prevent harassment, and making sure that employees have multiple avenues through which they can report harassing conduct. The policy should not be limited to just harassing conduct committed by employees, but should also specifically state that the company will not tolerate harassment of its employees by third parties such as customers and vendors. If supervisors observe or otherwise become aware of harassing conduct by third parties, they must take appropriate remedial measures and should report the conduct to human resources. Finally, any investigation and remedial measures should be documented and the employer should continue to monitor the situation to ensure that the conduct has stopped. Taking these steps will significantly reduce the risk that you may face as an employer for the harassing conduct of third parties.

discrimination, harassment, hostile work environment, law-in-the-workplace, third-party