Berry Moorman

Avoiding Liability for Sexual Harassment by Third Parties

Avoiding Liability for Sexual Harassment by Third Parties

Yes, you can be liable to your employees for sex harassment by employees of other businesses. You may be liable for the acts of employees of outside contractors (the maintenance crew), customers and vendors. Do not be tolerant of this behavior. Do not rely on the third party employer to deal with the situation.

If you know (or should have known) about the harassment and you fail to take immediate and appropriate corrective actions, you will be liable. Stated another way, you are not liable for the harassment, but you may be liable because you have the ability to stop it and do nothing. What to do?

  • Have a policy. Be sure your policy statements and internal complaint procedures are broad enough to assure your employees they are entitled to be free of all sex harassment from whatever source, while on the job whether or not on the premises.
  • Respond. Your duty to respond includes acting on “informal” reports even when the alleged victim does not ask for or even consent to an investigation.
  • Respond immediately. Inform your customer (vendor, etc.) what has been reported. State this is unacceptable and must be stopped. Terminate the contact between the harasser and the victim.
  • Assure your employees. They should understand that you do not condone sex harassment of them by anyone. Tell them they do not have to tolerate it even from a customer.
  • Monitor the situation. Be sure the response has been effective. Results count. While there is no recipe for how to respond, courts have looked at whether the employer’s action actually stopped the harassment.

Courts say that your response is adequate it if is “reasonably calculated to stop the harassment.” Typically, however, the court finds that the response was not sufficient if the harassment continued.

If your employees deal with the public, be aware that cases have been decided against operators of such retail establishments as a restaurant, a record store and a casino. Again, the act of harassment, itself, is not the problem. It is the business operator’s failure to tell the customer to stop or be barred from using the establishment.

Of course, developing a proper response is a little more complicated where the harasser is not your employee. However, you should use whatever control or influence you have over the situation. Notify the harasser’s boss or upper management. Conduct your own investigation. Attempt to involve yourself in the corrective action, either with the harasser’s employer or with the harasser directly.

Failure to respond, immediately and effectively, will result in the same liability you would have had if the harasser been one of your own employees.