Employer May Be Liable for Harassment by Non-Employee


A recent case reminds employers that, under Title VII, they must protect their employees from harassment by outside third parties, and that their knowledge about such harassment may depend on low-level supervisors.

In Nischan v. Stratosphere Quality, LLC, a project supervisor was sexually harassed by the employee of one of her employer’s clients, with whom she had frequent contact at the client’s worksite where she was assigned. Another project supervisor observed one of the incidents of harassment and comforted the harassed employee, who had run out of the room crying. She was subsequently removed from the worksite at the request of the alleged harasser, and she filed suit. The trial court dismissed her claims, finding, in part, that the employer did not have notice of the harassment because she failed to file a formal complaint.

The U.S. Court of Appeals for the Seventh Circuit, however, found that the employer had constructive notice of the harassment because the other project manager knew of the harassment and, under the terms of the employer’s harassment policy, which required those with any supervisory authority to report possible harassment, had the obligation to report the observed harassment, which she did not. Her knowledge as a supervisor – albeit a low-level one – was deemed to be the knowledge of the employer.

In addition to emphasizing employers’ obligations to protect employees from outside harassment, this case emphasizes the importance of not just implementing a thorough harassment policy, but training all managers and supervisors on their obligations under the policy.