Are Employers Liable For Sexual Harassment Caused By Clients & Customers?

When people think about sexual harassment at work, they typically imagine it within the confines of people employed by the same company. While this is not a misconception about the dynamics of most cases of sexual harassment at work, it’s an incomplete picture.

Employees can and do experience sexual misconduct and abuse from their employer’s customers and clients. Known as third-party sexual harassment, this phenomenon isn’t often spoken about during the same breath as what occurs between coworkers or employees and their supervisors. While that may be the case, the employer may be no less liable for failing to take action if an employee reports harassment coming from someone with whom the employer does business.

As with sexual harassment occurring among those employed by the same company, instances involving third parties must be so severe or pervasive enough that a hostile work environment is created. This can easily be the case if a client who frequently visits the company propositions a receptionist or even just once inappropriately touches the project manager assigned to their account.

When Does an Employer’s Liability Begin?

While third-party sexual harassment is different because of the people involved and the employer’s level of authority (or lack thereof) over them – and those are important differences – it’s not much different otherwise.

When employees experience sexual misconduct or abuse from their employer’s customers or clients, they must report the activity so that the employer has a chance to resolve the issue. It’s only when the employer becomes aware of the problem that they assume liability to address and correct it.

Employees may fear that reporting someone with whom their employer does business will affect their employment, but under no circumstances can an employer legally retaliate against the employee for filing a sexual harassment claim – even if it’s against someone who represents a revenue stream to the company.

Just as with internal cases of sexual harassment, the employer must elevate the sexual harassment report above all other business priorities and take action to correct the issue.

In some cases, such corrective action may include:

  • Directly addressing the matter with the client by making it clear that the behavior is inappropriate and won’t be tolerated
  • Changing the location of the employee’s workstation to limit interaction with the client
  • Placing another employee on the client’s account
  • Asking the client to send over a new representative
  • Dropping the client

These are merely a few of the possible ways that an employer can and should intervene to protect their employee – and again, doing so ought to be the employer’s priority.

Employers Must Avoid Unintentional Punishment For Reporting

While employers are prohibited by law from overtly retaliating against employees who report sexual harassment, they must also take care to ensure that any corrective actions they pursue to address the misconduct don’t unintentionally punish the employee.

Such can be the case when an employer immediately decides to remove an employee earning a commission from a high-performing account without consulting with the employee. Sending the employee elsewhere in the company where he or she would be making less of a commission than before could be viewed as retaliation for reporting sexual harassment.

Under circumstances such as this, an employer wouldn’t be wrong to open a discussion with the employee about how the problem can be agreeably mitigated without adversely impacting the employee. Regardless, employees should not find themselves in the place of making concessions to avoid being mistreated by their employer’s customers or clients – if the problem absolutely cannot be otherwise mitigated, the employer may be left with no option but to drop the client.

Contact Haeggquist & Eck, LLP for Assistance

At Haeggquist & Eck, LLP, we proudly represent employees who need to hold their employers accountable for violations of their rights at work. Sexual harassment is a key issue in employment law, and our attorneys frequently assist clients who have experienced it and decide to pursue fair and just compensation from their employers.

Get in touch with us today to schedule a free initial consultation with someone who can help. Call (619) 342-8000 or fill out our online contact form to reach someone at our firm.



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