August 08, 2025
Is an Employer Liable for Workplace Harassment by a 3rd Party?
It depends upon whom you ask! A case from the 6th Circuit brought this question back into the light. Here’s the scenario.
A few months into her tenure, an employee (sales rep) went to visit one of the company’s clients, a motel. When she stepped into the motel manager’s office, the manager locked the door behind her. He then asked her if they could date. The employee said no, explaining that she was married. Feeling uncomfortable, she asked to leave. The manager unlocked his office door, and the employee walked out. The employee later described these events to her supervisor who reassigned the client to another sales team, meaning the employee would not need to interact with the client again.
When the employee was laid off with 22 other employees as part of a reduction in force, she sued alleging she was subjected to a hostile work environment, among a few other claims. In determining whether the employer was liable the court asked, “When, if ever, is an employer liable—either directly or vicariously—for the harassment of an employee by a non-employee?”
The court’s answer? Only when the employer “exercises control over the [client’s] physical activities” or decides “to expose women to [discriminatory] working conditions.” Before you hang your hat on this one and breathe a sigh of relief, understand this is a decision in the minority. Even the court writes, “Nor do we lose any sleep over standing nearly alone in this conclusion. Other than the
Seventh Circuit, every other circuit to reach the issue, by our count the First, Second, Eighth, Ninth, Tenth, and Eleventh Circuits, has ‘applied’ some form of ‘a negligence theory of liability to the harassing acts of customers.’” The court follows that statement with some snarky remarks about why other circuits have held to the contrary, such as failing to “undertake an independent evaluation” or engaging in “judicial policy making.”
Now what? The 6th Circuit covers MI, OH, KY TN. The 7th Circuit covers IL, IN, WI. If you are risk adverse and have a similar situation with an employee working in one of those states, you may want to follow the EEOC’s guidance on this matter rather than relying on this decision. As the court describes it, the EEOC “deems employer’s negligence enough to hold an employer directly liable for workplace harassment committed by a non-employee…(allowing liability for non-employee harassment when the employer ‘knows or should have known of the conduct and fails to take immediate and appropriate corrective action.)’” In any instance, talk to your company’s legal counsel.
