Thursday, May 22, 2014

The Tricky Case of the Third Party Harassment Claims

Actually, this is not that tricky.  The 4th Circuit recently affirmed something that employment lawyers have been telling their clients for years – an employer's work environment extends throughout the span of the company’s control, and includes customers, vendors and other third parties that come onto the premises.  In this case, a female receptionist and customer service representative was subjected to a multi-year exposure to sexual and racial slurs by an independent sales representative for another company.  Plaintiff interacted with this gentleman (I use the term loosely) more than once a day over the course of the several years that he was representing his company.  The male sales representative continuously made racist and sexist comments, displayed lewd pictures, and engaged in just about ever other vile type of behavior you can imagine in the presence of the plaintiff and other women in the office.  Some of this conduct took place in front of the plaintiff’s supervisor, who also observed the immediate and stressful emotional effect that this individual’s conduct had on the plaintiff.   In addition, the plaintiff reported the offensive conduct several times to other members of her employer’s management team.

For some inexplicable reason, the company did not react immediately to this, but let it continue over a period of several years.  The plaintiff ultimately took medical leave because of the stress, and then resigned, but not before she filed a charge of race and sexual harassment with the EEOC.

The 4th Circuit had little trouble in reversing the trial court’s determination that the male sales representative's conduct did not rise to the level of harassment, and even if it did, the employer was not liable because the conduct was by a third party.  Using the standard that the employer must “know or should have known” of the third party’s action to impose liability on the employer, the court quickly determined that there was plenty of evidence that the company knew of the harassing conduct, knew it was unwelcome, and knew it was having a significant effect on the plaintiff.  The plaintiff’s supervisor herself referred to the third party sales rep as a “pig” and acknowledged to the plaintiff on several occasions that his conduct was inappropriate.  The court also noted that it was only after three years of this that the company finally woke up and determined that it needed to act against the harasser by banning him from the premises.

That late recognition was not enough to escape liability.  The message here is the same as it has always been – do not allow your employees to be subject to actionable behavior, whether it comes from co-workers, supervisors or third parties.

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