I'm Liable for What? - Employer Liability for Third Party Harassment

The recent U. S. Fourth Circuit Court of Appeals decision in Freeman v. Dal-Tile Corp., et al., decided April 29, 2014 adopts a negligence standard for an employer's liability for third party harassment under Title VII of the U. S. Code. As a result, the court in that case held that an employer can be held liable to its employees if the employer knows or should know of harassment by third parties, but fails to take "prompt remedial action reasonably calculated to end the harassment." As the court quipped, employer's cannot avoid liability by taking a "see no evil, hear no evil" strategy.

As noted in prior blogs, harassment of different levels is still not uncommon in the construction industry; and is clearly something to be avoided in any form. But this case serves as a warning shot that employers cannot just focus on their own employees harassing other employees; but also any third parties. Every day there are any number and types of third parties that intermix with construction employees, from those in the home office to those in the field. Such persons include vendors, inspectors, subcontractors, suppliers - the list goes on. The Freeman case illustrates the importance of employers taking any harassment claims seriously, and immediately nixing harassment, of any type and from any source, in the bud.

Follow Up: Since this post, I note that my law partner, Arlene Klinedinst - who focuses her practice on employment law - has been asked to comment about the Freeman case and has offered these thoughts:

1.  The Freeman case puts the focus on the need for "prompt, meaningful action to stop the conduct."

2.  Employers need to take a close look at supervisor authority, as that was not really addressed by the Freeman court, but can affect liability.

3.  When responding to employee complaints of third party harassment, employers have to walk a fine line with responses. Employee transfers, even if promotions, can become issues.

4.  For vendor or customer employees who are problems, employers should take decisive action, such as notifying the company president of the vendor / customer, and discussing options, including banning the offending visitor.

5.  If the offending person will not stop, employers then have to take additional steps.