Educate Managers About Third-Party Harassment

Allen Smith, J.D. By Allen Smith, J.D. November 27, 2018

​Many managers aren't aware that their companies could be liable for harassment if a customer or vendor harasses an employee. And worse, some managers try to squelch any third-party harassment claims from employees to avoid losing business.

"Unfortunately, you could find dozens, maybe hundreds, of cases where managers get a complaint from an employee about customer or third-party potential harassment, and the response is something along the lines of 'grin and bear it,' " said Jennifer Betts, an attorney with Ogletree Deakins in Pittsburgh.

She recommended that all anti-discrimination training address how to head off third-party harassment. "This [should be the case] even if the company isn't in a business line where customers come into their workplace," she said, such as organizations where primarily contractors or other third parties visit the site.

The Customer Isn't Always Right

Challenges in preventing third-party harassment or other types of discrimination depend on what line of business an organization is in, noted Bonnie Mayfield, an attorney with Dykema in Bloomfield Hills, Mich.

Sometimes third parties discriminate against and harass employees, and employers feel pressure to cave in to customer demands. "For example, some … medical personnel may be concerned about potential deleterious effects upon patient health if patient requests for treatment by a certain kind of provider are not honored," such as if a white patient insists on a white nurse and harasses a black nurse until a white one is provided, she noted. In other instances, retailers and employees may worry about the impact on lucrative sales or compensation if they confront a client about harassment.

"None of these challenges should prevent an employer from timely investigating and taking prompt remedial action and addressing alleged third-party harassment," Mayfield said.

Harassment by nonemployees often takes place out of sight of other workers or managers, making an investigation more difficult. For example, customers may harass hotel housekeeping staff when no one else is present.

One practical problem with third-party harassment, particularly in retail, is that managers mistakenly think that harassing customers are unlikely to return, Betts noted.

"There may be a business disincentive to take remedial action depending on the nature of the customer relationship," she added.

Plus, some businesses assume customers are always right, which obviously isn't the case when customers are harassers, noted Katherine Fechte, an attorney with Greensfelder, Hemker & Gale in St. Louis. Low-wage employees such as restaurant servers who rely on tips may begrudgingly tolerate harassment by customers for fear of jeopardizing their income. Customers may believe the organization has no control over their behavior and that they can act with impunity, said Barbara Nett, owner and principal consultant with Savina Consulting in Denver.

In turn, employers may assume they have no control over customers, even though this is not true, stated Michael Volpe and Allison Gotfried, attorneys with Venable in New York City.

However, employers have more obvious remedies with vendors and contractors than with customers. These remedies can include warning the nonemployee, using another representative with the same vendor or severing the relationship, Nett said.

Third-party harassment against employees is prohibited by Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, the Age Discrimination in Employment Act, and some state and local nondiscrimination statutes. Consequently, not only is sexual harassment by third parties prohibited, so is harassment based on an employee's race, disability or age.

Managers may also be victims of harassment. In one case, a manager alleged racial harassment against an employer that allegedly told the manager to either endure the customer's repeated racial slurs or find a replacement client who could bring in $250,000 to $300,000 worth of new business. A federal district court ruled that a jury should be allowed to consider the harassment claim.

Tips for Avoiding Third-Party Harassment Claims

Nett offered the following tips to handle third-party harassment. She said employers should:

  • Have policies that clearly state that anti-harassment provisions protect employees from harassment by nonemployees.
  • Provide third parties such as vendors, independent contractors and consultants with copies of the company's anti-harassment and anti-discrimination policies and require them to comply as a condition of doing business.
  • Conduct a harassment audit within the organization to find out how prevalent employees think harassment is.
  • Take swift and appropriate action against nonemployee offenders, even if it means reassigning a lucrative client or denying a customer access to the premises.
  • Identify any groups within the organization at high risk of being harassed. These may include low-wage workers; isolated workers, such as home health aides, overnight janitorial workers and agricultural workers; and transgender employees, Nett said.
  • Initiate additional measures that increase protections for at-risk groups. For example, many hotels are now providing housekeeping staff with panic buttons so they may immediately notify security that they need assistance if they encounter trouble in a guest's room.
  • Provide bystander intervention training (e.g., "If you see something, say something"). Suppose a customer is harassing a transgender waiter based on gender identity. While federal law may not clearly protect the waiter, the company's policy can. A fellow restaurant worker may feel compelled to intervene and tell the customer the comments are unacceptable and that he or she will be asked to leave unless the harassing behavior stops.

[SHRM members-only policy: Anti-Harassment and Complaint Procedure (Includes Dating/Consensual Relationship Provision)]

Mayfield added that employers should:

  • Train all managers and employees on the employer's anti-harassment policies. Training should start at the beginning of and regularly continue throughout the employment relationship. The training should be documented so that proof of it is readily available should litigation ensue.
  • Advise employees to promptly report alleged harassment.
  • Thoroughly investigate claims of third-party harassment.
  • Alert authorities, such as the police, about third-party harassment if the harassment escalates to physical assault.

If third parties threaten to sue if an employer refuses to do business with them, the employer's investigation should provide a good defense, Mayfield said.

[Visit SHRM's resource page on workplace harassment.]



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