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Minimizing Employer’s Risk of Liability for Harassment by Non-Employees

Although most employers understand they may be liable for harassment of an employee by a supervisor or coworker, some are caught off guard by the idea they may also be responsible for harassment committed by a third party non-employee. The Equal Employment Opportunity Commission’s (“EEOC”) regulations, and most courts, however, recognize an employer’s liability when an employee is harassed by a non-employee where the employer knew or should have known of the harassment and failed to take reasonable action to prevent future harassment. Liability in these type of cases, therefore, hinges on the employer’s knowledge of the conduct and behavior in response.

An employer may have actual knowledge of the harassment by a third party because of an employee’s complaint or a supervisory employee’s observation of the conduct. Knowledge may also be established in situations where the employer should have known of the harassment based upon informal information and conversations taking place in the workplace but chose to be “purposefully ignorant.” With regard to whether an employer’s response to harassment by a non-employee is reasonable, the key factors include how quickly the employer acts and if this action ends the harassing conduct.

Although an employer must always promptly investigate an employee’s complaints alleging harassment by a non-employee, what is a reasonable response to end the alleged harassment depends upon the type of conduct alleged, as well as the identity of the alleged harasser. For example, if the alleged harasser is a vendor, the employer should immediately report the conduct to its vendor and demand that an individual other than the alleged harasser be assigned to service the employer while the investigation is underway. If the alleged harasser is a customer of the employer, the employer should immediately reassign the alleged victim so he or she does not have continuing contact with the alleged harasser.

If the employer’s investigation reveals a clear violation of anti-harassment and discrimination policies, the employer should require the vendor to permanently remove the alleged harasser from any contact with the employer. Whether the alleged third party harasser is subject to discipline or termination will be left to the vendor since the employer’s duty is only to end the alleged harassment. If a customer is determined to have violated anti-harassment and discrimination policies, the employer often faces the dilemma of attempting to retain the client while protecting its employees from harm. In most such instances, the employer should require the customer to assign an individual other than the alleged harasser to be the contact person. If the customer refuses, the employer must carefully weigh its options but should never risk its employee’s safety merely to avoid offending or losing a customer. The employer must also be careful to avoid taking any retaliatory action against an employee who complains about harassment by a non-employee.

In addition to promptly investigating the alleged third party harassment and taking appropriate steps to end the harassment, an employer may further limits its potential liability by having in place well publicized policies and procedures. These policies and procedures should make it clear that harassment will not be tolerated in any form, whether committed by supervisors, other employees or non-employees. They should also prohibit retaliation against anyone alleging harassment and provide clearly defined reporting procedures for employees to use if they have a good faith belief there has been a violation of the policies or procedures.