In a significant ruling for employers and any business which has employees, the U.S. Court of Appeals for the Fourth Circuit, which covers Virginia, has published precedent which holds that an employer can be liable for creating a racially or sexually hostile work environment, based on the actions of a third party with whom the employer conducts business. In other words, the responsibility an employer owes its employees has expanded from keeping its own staff from exhibiting abusive or oppressive racially or sexually charged behavior towards other employees to responsibility for third party visitors.
In the case of Freeman vs. Dal-Tile Corporation (U.S. Ct. of Appeals 4th Cir. No. 13-1481, April 29, 2014) the behavior of a sales representative from another company to an employee of Dal-Tile was outrageous, frequent, abusive and conducted over a period of time. Additionally, the employee, Lori Freeman, complained to her immediate supervisor and when the supervisor failed to take action she reported an incident of abusive conduct to the Human Resource department of Dal-Tile. Freeman eventually took a medical leave of absence due to stress and then resigned her position. Her lawsuit against Dal-Tile in the U.S. General District Court was dismissed on a motion for summary judgment but the Court of Appeals reversed in part and remanded the case for trial.
While the actions of the third party sales representative were outrageous and the employer should have done more, this published opinion has significantly changed the landscape for employers. In a 2-1 opinion, the Court noted that for the first time it was publishing a negligence standard to an employer’s liability for third party harassment stating that “Similar to the reasoning we set forth for employer liability for co-worker harassment, an employer can not avoid …. “liability for third party harassment by adopting a see no evil, hear no evil strategy”. The Court went on to write that “once an employer has notice of the harassment, it must take prompt remedial action to end the harassment”.
For years now, an employer has had the duty of providing a non-hostile work environment internally, safe from harassment of supervisors and co-workers. An employer should now be aware of harassment by customers, clients and other outside parties visiting the business. When abuse is reported, prompt, remedial action must be taken. This could include banning certain customers or clients from the employer’s place of business. Additionally, many businesses have astutely implemented training programs for staff in regard to sexual harassment. That training should now be expanded to include how to prevent and stop abuse from third party visitors. For more information Email our Office.