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Protect Your Employees from Third Party Harassment

Most employers are well aware of the unlawfulness of harassment in the workplace, either by a supervisor or co-worker. A lesser known situation arises when your employee is harassed by a third party who is not your employee, such as an on-site vendor or customer. The law is very clear that employers have a legal duty to protect their employees from harassment, even if the harasser is employed by someone else. Two recent federal court cases are illustrative.

In Nischan v. Stratosphere, Michele Nischan was employed by a company called Stratosphere, which provided quality control services to car makers, including Chrysler. Nischan’s work required her to frequently work at Chrysler’s facilities, where she had to interact with a Chrysler employee named Abbas Sabbah. Nischan claimed that Sabbah relentlessly harassed her, including rubbing himself on her hip and buttocks, hugging her while moaning, asking whether her breasts were real, and asking her on dates. In the last allegation, he again propositioned her,  telling her that she would be a lonely empty nester because her son was leaving home soon. Nischan never complained about the harassment to Stratosphere’s human resources department, nor to her supervisor.

Nischan sued Stratosphere for failing to protect her from Sabbah’s harassment. The court held that Stratosphere could be liable for Sabbah’s harassment, even though Sabbah worked for Chrysler instead of Stratosphere, if Stratosphere was “negligent either in discovering or remedying the harassment.”  Despite Nischan’s failure to report the harassment, there was evidence that at least two supervisors were aware of it. The court therefore held that Stratosphere had constructive notice of the harassment, which meant it had a legal obligation to investigate and take remedial measures to protect its employee.

In EEOC v. Cromer Food Services, Homer Howard was employed by the defendant to deliver food to various businesses. One of his assignments was to refill a hospital’s vending machines. Almost every time he arrived at the hospital, several hospital employees teased him and accused Howard of being a homosexual. Howard repeatedly asked these individuals to stop making the comments, but to no avail.

Howard then reported the behavior to several direct supervisors and requested that his route be changed. His employer initially refused to change Howard’s route, but after several months of continued complaints, Howard was offered a route that was both undesirable and inconvenient for him.

The court held that Howard’s employer was liable for the hospital employees’ harassment of Howard because it knew about the continued harassment and the remedial measures offered were inadequate. The employer made no effort to address the hospital employees’ conduct or otherwise attempt to correct the problem. Howard’s employer’s actions in assigning him a less desirable route was also unlawful, as it amounted to retaliation against Howard for complaining about the harassment.

So, what is the take away from these cases if, for example, one of your customers flirts inappropriately with your receptionist every time he visits your business? First off, make sure your employees, and especially management, are aware that third party harassment is unlawful and must be reported. Third party harassment should be included in your employee handbooks and supervisors should be trained to understand the policy. If you send your employees to work off site, make sure they know to report harassment that occurs off site. As with allegations of harassment by your employees, you must then investigate the harassment.

What do you do if you conclude that the harassment took place? You obviously can’t terminate or discipline someone who isn’t your employee, but you may demand that the harasser’s employer terminate or discipline the harasser, although you cannot force them to do so. You can also bar the harasser from your premises. You may end up with no other alternative than to sever the business relationship with your customer, regardless of the monetary impact of that decision. The one thing you cannot do is punish the employee who complained about the harassment, which could give rise to a retaliation claim. The remedial action should focus on the harasser and his employer, not on the victim of the harassment. Finally, tell your employee what remedial action you took to stop the harassment, then remind your employee of your anti-harassment policy to ensure that if there is another incident your employee will report it to you.

Partner Troy Haggestad has extensive experience representing business clients in employment/labor law matters and commercial litigation.