Employer Liability for Harassment of Employees by Strangers

Date: September 4, 2014

True or False:  Employers can be held liable for harassment of their employees by third parties (non-employees). 


A recent Fourth Circuit case, Freeman v. Dal-Tile Corporation, squarely ruled that employers can be held liable for harassment by third parties.  In Freeman, the employee (Freeman) complained to her employer that she was harassed repeatedly by the employers’ vendor.  The supervisor ignored Freeman’s complaints forcing her to go to human resources who promised that the vendor would be banned from the premises.  The employer ultimately lifted the ban but prohibited the vendor from direct communication with Freeman.  Freeman resigned and sued.  The Fourth Circuit Court found that the employer failed to take prompt remedial action to end the harassment since the harassment occurred for several years before being addressed in any way.

The Freeman case is not the first case to hold an employer liable for harassment by third parties.  Other Courts have found liability for harassment by third parties and the EEOC issued an informal discussion letter in 2013 on this issue. (Click here for link to EEOC Informal discussion letter.)

What is Third Party Harassment?

Third party harassment is harassment conducted by someone outside of your organization.  Examples of third party harassers include customers, vendors, guests, independent contractors and delivery persons.  Just as with harassment by employees, to be actionable, harassment by third parties must be unwelcome and so severe and pervasive that it creates a hostile work environment.  Liability for this conduct is imposed on an employer if the employer knew or should have known about the problem and failed to take appropriate action to protect the employee.

Suppose you have a customer who flirts with your receptionist every time he calls and visits.  In the case of membership organizations, what if one of your members acts inappropriately toward your staff at a conference?  What about holiday parties or other social events that are related to the job?  How about the UPS delivery woman?  How can you protect your staff from “strangers”? 

How do I Protect My Employees from Third Parties?

First, you need to know of the conduct before you can take action.  If you witness it, you need to stop it.  Otherwise, it is up to the employee to notify you of the unwelcome harassment.  Once you are on notice, however, you need to take prompt, remedial action.  If further information is needed, conduct an investigation, just like you would for harassment by an employee.  If the harassment is confirmed, although it may be awkward, you need to tell the customer to stop and take action to protect the employee from further harassment by the customer.  In sum, employers must follow the same process for third party harassment they do with harassment by employees.

How do I Protect my Organization?

Employers can minimize their risk by taking the same preventative measures that should be taken with regarding to harassment by employees.

  1. Review your harassment policy.  Make sure it includes the basic provisions including, without limitation (a) definition of harassment and prohibited conduct; (b) complaint procedure; (3) investigation procedure; (4) anti-retaliation provision; and (5) confidentiality.  In addition to those basic requirements, make sure the policy includes complaints against third parties.
  2. Disseminate the policy and train your employees.    This is very important as the policy is worthless if no one understands or knows about it.  Obtain documentation from each staff member acknowledging receipt of the policy and attendance at training.
  3. Follow your policies.  The only thing worse than not having a strong policy is not following a policy.  Promptly and thoroughly investigate ALL claims of harassment, including claims against third parties.  If harassment is found, take prompt action to protect the employee.
  4. Train your managers.  In order to follow the policies and be aware of the requirement to protect employees from harassment by third parties, managers need to be educated.  Document the training.
  5. Document the investigation and outcome.  In the event you have a complaint, document the complaint, the investigation and the outcome.