Think you are off the hook because your employee is complaining that a vendor or a client harassed her?  Think again.  The Fourth Circuit (covering Maryland, North Carolina, South Carolina, Virginia and West Virginia)  recently ruled in Freeman v. Dal-Tile Corp. (4th Cir. 2014) that employers are liable for a third party’s harassment of its employees when the employer knows, or reasonably should have known, about the harassment.

The plaintiff, a customer service representative at a tile and stone business, interacted with her harasser, a sales representative, on a daily basis for three years.  According to the Plaintiff, during that time he showed her nude pictures on his cell phone and referred to other employees as “black b—-es.”  When the employee complained to her supervisor, the supervisor merely told her harasser to stop using offensive language, which was ineffective at curbing his conduct.  The employee then complained to Human Resources, which prompted the company to ban the harasser from the premises.  The plaintiff’s supervisor, though, later let the harasser return to the premises so long as he did not communicate with complaining employee.  The harasser’s return caused the employee severe anxiety, and she resigned shortly after returning from FMLA leave.

Although the district court dismissed the case, ruling that liability could not be imputed to the employer, the Fourth Circuit disagreed.  It found the employer could be liable if it knew of the harassment and failed to take action that was prompt and effective at addressing the harassment.  Now the case is back before the trial court, and the employee has the opportunity to try to prove her allegations to a jury.

In light of this decision, employers should review and revise their harassment policies to make sure they cover inappropriate behavior by third parties.  Employers should also train supervisors on the appropriate way to respond to complaints of harassment.  Please contact us if you’d like to discuss these preventative measures!