TOP TIP: Employers Need To Be Careful About Harassment By Or Of Third Parties!


There has been much focus on manager or co-worker harassment of employees, but several recent cases provide a good reminder to employers that they need to be mindful of harassment by or of customers, clients, vendors, contractors, and other third parties.

In EEOC v. Costco Wholesale Corp., the U.S. Court of Appeals for the Seventh Circuit upheld a jury verdict of $250,000 against the employer for a customer’s stalking of an employee. The employee had reported to her supervisors that a customer made her uncomfortable. The customer was told to stay away from the employee, but ignored the instruction. Over the course of 13 months, he continued to approach her, often in front of her supervisor, giving her compliments, asking her questions, touching her, and then videotaping her. She obtained a no contact order from court, and went on a medical leave. At this point, the employer finally told the customer that he was not permitted to shop at the store. His membership at the store was not revoked, however, until he verbally assaulted the employee at another store location. The court found that this behavior, although not “overtly sexual” was “objectively intimidating or frightening,” and created a sexually hostile work environment that the employer had failed to address.

In another recent case, Gardner v. CLC of Pascagoula, L.L.C. dba Plaza Community Living Center, a certified nursing assistant complained of lewd comments and groping by a patient with cognitive issues. Her supervisor told her to “put [her] big girl panties on and go back to work.” The CNA was also refused reassignment. The U.S. Court of Appeals for the Fifth Circuit found that she could bring a claim for a sexually hostile work environment against her employer, who had failed to take action to protect her from the patient’s harassment.

On the flip side, an employer can also be held liable to third parties for harassment by its employee. For example, in Doe YZ v. Shattuck Saint Mary’s School, three students were able to bring suit against a school due to sexual abuse by a teacher, where the school had prior notice of inappropriate conduct by the teacher towards other students.

These cases demonstrate the need for employers to take appropriate action to stop or prevent the harassment of its employees by third parties. It is not acceptable, particularly in this time of #MeToo, to disregard employee complaints or to tell employees to tolerate inappropriate behavior – even if the complained-of conduct does not appear to be particularly egregious (since repeated low-level behavior can still amount to illegal harassment) or if there are concerns about the ability to control the third party’s behavior. Ultimately, the employer’s responsibility is to protect the employee from harassment.

Similarly, it is important for employers to ensure that their employees are not engaged in the harassment of third parties. Otherwise the third party may assert tort claims such as negligent hiring, negligent supervision or negligent retention against the employer based on an employee’s misconduct toward them.