Professional Service Agreement

Employers May Be Liable for Hostile Environment Caused by Non-Employees

March 20, 2017

A recent decision by the United States District Court for the District of Delaware serves as an important reminder that employers may be held liable for acts of harassment by individuals with whom their employees come in contact, even when those individuals are not employees.

A home health care worker filed suit against her employer alleging that the relative of one of the home health patients to whom she was assigned had created a hostile environment. Specifically, Employee alleged the family member of the home health patient directed sexual innuendos and other inappropriate comments toward her and, on one occasion, physically assaulted her. When Employee complained to her supervisor about the conduct, the supervisor acknowledged that the family member had made inappropriate comments to her over the phone previously. Employer responded to the complaint by speaking with Employee about the situation and immediately removed her from the assignment. Employer also offered her another assignment located further from her home. When Employee refused that assignment, Employer continued to offer her other opportunities, one of which she ultimately accepted.

Employer attempted to have the case dismissed on the ground that it immediately responded to the complaint and addressed the situation. The Court refused to dismiss the case, finding instead that because the supervisor acknowledged that the same family member had made inappropriate comments over the phone during approximately the same time period, it was plausible that Employer had constructive knowledge of a hostile environment that it had failed to promptly correct.

The Court’s decision underscores the importance of employers ensuring that they have policies and practices in place which protect employees from harassment by third parties. While the possibility of third-party harassment exists in many industries, employers in health care, retail, and hospitality and service industries are vulnerable to such claims because their employees come in direct contact with customers, vendors and other outsiders on a regular basis. Like cases involving direct employment relationships, employers may be liable for third-party harassment if an employee can establish that the company “knew or should have known” of the possibility that a customer or other third party was engaged inappropriate behavior.

To minimize the risk of liability for the actions of non-employees, employers should take the following steps:

Review the company’s anti-harassment policy for specific references to third-party harassment and instructions for reporting it.

Provide regular training to all employees, and especially to supervisory personnel, regarding the appropriate steps to take if they become aware that a non-employee is making inappropriate comments in the workplace or engaging in conduct that would otherwise violate the employer’s anti-harassment policies.

Proactively consider how to respond if a vendor or customer is accused by an employee of inappropriate conduct without taking action that may be considered retaliatory against the employee (such as removing the employee from the account or workplace in order to avoid interaction with the alleged harasser).