Employers may risk peril if they ignore third-party harassment claims.  In Freeman v. Dal-Tile Corp., No 13-1481, 2014 WL 1678422 (4th Cir. April 29, 2014), the Fourth Circuit recently ruled that a negligence standard applies to third-party harassment claims under Title VII.  In other words, just as with co-worker harassment, an employer may be liable for third-party, non-employees who create a hostile work environment if (a) the employer knew or should have known of the harassment; and (b) failed to take prompt remedial action reasonably calculated to end the harassment.  While the U.S. Supreme Court has yet to decide this issue, the Fourth Circuit joins the Second, Eighth, Ninth, Tenth, and Eleventh Circuits in applying the negligence standard to third-party harassment claims under Title VII.

In light of these decisions, here a few key lessons employers can take to minimize their risk of third-party harassment claims:

  • Avoid taking a “see no evil, hear no evil” approach to harassment complaints.  Employers should have procedures in place to respond reasonably to complaints about harassing conduct in the workplace regardless of whether the bad actor is an employee or a third-party, i.e., a customer, independent contractor, or employee of vendors and suppliers.
  • Review policies.  Review harassment policies to ensure they cover employee complaints of harassment by third-parties. These policies should also contain robust procedures for investigating complaints of harassment.
  • Train supervisory staff.  Employers should conduct regular workplace training to ensure that their supervisory staff are equipped to promptly investigate and address any and all claims of workplace harassment or discrimination.
  • Investigate complaints promptly.  Employers should make every effort to be prompt in their investigation of harassment complaints.  While there is no hard and fast response time that insulates companies from liability for failing to take “prompt remedial action,” a prudent rule of thumb is to investigate allegations of harassment or discrimination (by co-workers, supervisors, or third-parties) immediately upon receipt.
  • “Caveat Emptor.”  Parent or purchasing companies should ensure that newly-acquired entities are complying with all applicable Equal Employment Opportunity policies and procedures.