Harassment by nonemployees: how should employers respond?

HR Magazine, Dec, 1996 by Diana L. Deadrick, Scott W. Kezman, R. Bruce McAfee

Kim is a bus driver in a large city. Each day one of her customers boards the bus and directs racial slurs and remarks at her. Does Kim's employer have any responsibility for stopping this harassment?

Harassment by nonemployees - suppliers, independent contractors, customers or clients - is a growing area of concern for employers because of changes in today's workplace. Not only are employees working more and more in isolation, there is significant growth in service sector jobs where "the customer is always right" and "customers for life" are often the operational philosophies.

In those situations, employees may be reluctant to inform management about any type of customer abuse, especially if the organization uses customer feedback as part of the employee performance evaluation process. In addition, the current emphasis on outsourcing and relying heavily on contingent employees means that permanent employees are exposed to more situations where harassment by nonemployees could occur.

Although the issues surrounding employer liability for harassment by nonemployees have yet to be fully clarified by the courts, HR professionals need to be aware of the issues and know how to respond.

ARE EMPLOYERS LIABLE?

According to the EEOC, an employer may be responsible for harassment by nonemployees in the workplace if the employer fails to take corrective action, within its control, once it knows or has reason to know of the harassing conduct. The EEOC took this position in 1980 when it disseminated its guidelines on sexual harassment. Although EEOC guidelines are not laws, courts often rely. on them for clarification and have adopted some of the definitions and standards from the guidelines in their decisions on harassment. When faced with the novel issue of sexual harassment by nonemployees, several courts have specifically identified the EEOC guidelines as their authority for holding an employer liable.

Given that the courts have also applied the EEOC guidelines to other types of harassment cases - such as race, religion, national origin, age and disability - the scope of employer liability for harassment by nonemployees will most likely include all instances of harassment, sexual or otherwise.

The EEOC guidelines list three key factors to evaluate when determining employer liability:

1. Whether the employer knew or should have known about the conduct;

2. Whether the employer took immediate and appropriate corrective action; and

3. The extent of the employer's control and legal responsibility for the nonemployee harasser.

Although the courts must apply and further define these factors in the context of harassment by nonemployees, past decisions on harassment among employees provide some basis for predicting how they will interpret the first two factors. The third factor is unique to the situation of harassment by nonemployees and raises questions that have yet to be answered by either the courts or the EEOC.

Employer knowledge. Courts are likely to hold an employer liable for harassment by non-employees if the employee complains of harassment and those complaints are ignored. If a supervisor or manager knows about harassment and takes no steps to remedy the situation - regardless of whether the employee complains - or if the harassment is so severe and pervasive that the employer reasonably should have known of it, courts probably will hold the employer liable.

Whether harassment by a customer is severe and pervasive will have to be determined on a case-by-case basis by the courts. Where the line lies may depend on factors such as the employer's type of business and/or its relationship with the nonemployees involved.

Corrective action. In cases that involve other types of harassment, the courts compare the severity of the harassment to the timeliness and thoroughness of the employer's investigation and appropriateness of its response. This standard will most likely be adopted in cases of harassment by nonemployees as well.

For example, in cases of harassment by fellow employees, the courts have generally held that employers must do more than merely require harassers to apologize or request that they desist. But, in the case of harassment by a nonemployee, will an apology by the nonemployee or a request to desist from the employer be sufficient?

What constitutes an "appropriate" response when harassment comes from a nonemployee must also be determined by the courts on a case-by-case basis. The primary factors will probably be the severity and frequency of the conduct and its effect on the harassed employee.

Employer control. Because employer control is unique to the situation of harassment by nonemployees, it is more difficult to say what standards the court will develop.

In one EEOC case, the owner of a restaurant was found liable for the sexual harassment of a waitress by a regular customer. The EEOC said the customer's conduct was within the employer's control because the harasser was not a stranger - the employer had a friendly, personal relationship with him. In light of these circumstances, the commission concluded that the employer had some degree of control over the nonemployee and was in an advantageous position to remedy the situation.