6th Circuit Sets Higher Standard for Employer Liability in Client Harassment

The 6th U.S. Circuit Court of Appeals issued a ruling Aug. 8 in Bivens v. Zep Inc. that breaks from other federal courts and U.S. Equal Employment Opportunity Commission (EEOC) guidance. The court held that for a worker to win a harassment case involving a nonemployee — such as a client — they must show “the company intended for [their] harassment at the hands of the client to occur.”

This decision moves away from the standard used in most other courts, where employers may be held liable if they knew or should have known about the harassment and failed to take reasonable action to stop it. Instead, the 6th Circuit focused on whether the employer acted intentionally, rejecting a negligence-based approach.

The court also said the EEOC’s role is limited to setting procedural rules for Title VII cases and does not include interpreting the law itself. The court acknowledged it is taking a minority position, stating it does not “lose any sleep over standing nearly alone in this conclusion,” and criticized other courts for following EEOC guidance without doing their own analysis. The court also emphasized that the Supreme Court’s 2024 ruling in Loper Bright Enterprises v. Raimondo obliges courts to “always to ‘independently interpret the statute.’ ”

In this case, the plaintiff claimed a client sexually harassed her and that she was fired after complaining, with her firing disguised as a workforce reduction. Her employer denied the allegation, citing legitimate business reasons for the termination, and the court ultimately upheld the district court’s ruling in the company’s favor.