In a recent decision, the Sixth Circuit Court of Appeals clarified when employers can be held liable for harassment committed by customers in the workplace. It ruled that an employer is only liable for a customer’s behavior if the employer intentionally caused the harassment to occur or was substantially certain that it would occur.

In Bivens v. Zep, Inc., a former employee sued her employer, under state and federal law, for harassment after losing her job due to a company-wide reduction in force. While employed with the company, she reported that a manager from one of the company’s clients had asked her out. Immediately after she reported the unwanted overture, her supervisor acted to prevent further contact. Nevertheless, she later included a harassment claim in her lawsuit for wrongful termination, arguing, among other things, that the company created a hostile work environment based on the actions of the company’s client.

In determining that the employee’s claims lacked merit, the Sixth Circuit explained that the two ways an employer can be held liable for the actions of individuals within its organization are directly and vicariously. Direct responsibility occurs when someone in a leadership or official role within the company engages in harassment whereas vicarious liability occurs when a lower-level employee or someone else that might be considered an “agent” of the company behaves inappropriately and the employer fails to take reasonable steps to prevent or stop the harassment (i.e., the company was negligent).  Therefore, the court concluded that the employer could not be responsible for the harassment at issue because the client who committed the act was not an agent of the company.

This ruling stands apart from most other federal appellate court opinions where employer liability for client harassment is subject to a negligence standard like that assigned to cases involving harassment by co-workers. As such, the Sixth Circuit has narrowed the circumstances under which employers in Ohio, Tennessee, Michigan, and Kentucky can be held responsible for harassment by non-employees.

While this case has potential for Supreme Court review, the timing of if or when that might happen is currently unknown. Therefore, it is important that employers in Ohio, Tennessee, Michigan, and Kentucky review their internal reporting and investigation procedures to align with this heightened standard and ensure timely and appropriate responses to employee harassment claims.

(This blog, prepared by Campanella Law Office, is for general informational purposes only and is not intended to convey specific legal advice, nor is it intended to create or constitute an attorney-client relationship.)