Employer liability for non-employee sexual harassment.
Hoft, John ; Thomson, Neal F.
CASE DESCRIPTION
The primary subject matter of this case sexual harassment. This
case has a difficulty level of three to four, and is appropriate for an
upper division, undergraduate level. This case is designed to be taught
in one class hour, and is expected to require two to three hours of
outside preparation by students.
CASE SYNOPSIS
This case examines the limits of employer responsibility for sexual
harassment of their employees. Title VII of the Civil Rights Act of 1964
prohibits discrimination based on race, color, religion, sex or national
origin. Sexual harassment is considered sex discrimination, and is
prohibited under this act (Meritor Savings Bank v. Vinson, 1986). A
majority of employers are well aware that sex harassment by supervisors
and co-workers is an unlawful employment practice that will subject the
employer to vicarious liability (Harris v. Forklift Systems, Inc.,
1993). Not so well known is the fact that sex harassment by
non-employees such as independent contractors, customers, clients, and
suppliers will also subject the employer to exposure for discrimination
liability (Lockard v. Pizza Hut, Inc., 1998). The following case
presents basic information about non-employee sexual harassment law,
followed by several vignettes. In each case, students are to evaluate
the vignette, determine whether sexual harassment has taken place, and
whether the employer can be held liable for the discriminatory acts of
non-employees.
INSTRUCTORS' NOTES
RECOMMENDATION FOR TEACHING APPROACHES
I have often found that students do not clearly understand the
concept of environmental sexual harassment, without seeing specific
examples. This case was designed to help clarify this particular issue,
in specific, those instances of sexual harassment by third parties, in a
manner that allows insightful discussion of the topic.
Generally, the approach I take is to divide the class up into small
groups, and assign them each one or more of the cases to discuss. Then
each group will present their determinations to the class, and we will
discuss, as a whole, whether the analysis picked up the important facets
of the case. Each of these cases is based on a specific real situation,
and have been decided in a court of law. The specifics of each case
follow:
GENERAL DISCUSSION POINTS
Employer liability for workplace environmental discrimination under
Title VII is usually based upon traditional notions of agency law which
ordinarily poses no difficulty in resulting employer liability because
the vast majority of environmental discrimination complaints are founded
upon the actions of the company's employees both co-workers and
supervisors (Faragher v. City of Boca Raton, 1998). However, imposing
liability upon the employer for the discriminatory acts of non-employees
is problematic (Berry v. Delta Airlines, 2001). Third party
non-employees typically cannot be considered an agent of the employer
and consequently the employer cannot be held liable for environmental
discrimination because of the acts of non-employees upon an agency
theory (Burlington Industries, Inc. v. Ellerth, 1998). The courts,
however, have ruled that employers are liable for harassing conduct by
non-employees "where the employer either ratifies or acquiesces in
the harassment by not taking immediate and/or corrective actions when it
knew or should have known of the conduct" (Folkerson v. Circus
Circus, 1997). The EEOC guidelines on the subject are in accord and
recite: "An employer may also be responsible for the acts of
non-employees, with respect to sexual harassment of employees in the
workplace, where the employer (or its agents or supervisory employees)
knows or should have known of the conduct and fails to take immediate
and appropriate corrective action" (29 CFR [section] 1604.11 (e),
1980). The courts, then, have applied a negligence theory of liability
to impose legal responsibility upon the employer of the victim of
discrimination as a result of the harassing acts of non-employees
(Little v. Windermere Relocation, Inc., 2001). "Thus, employers may
be held liable in these circumstances if they 'fail to remedy or
prevent a hostile or offensive work environment of which
management-level employees knew, or in the exercise of reasonable care
should have known" (Lockard v. Pizza Hut, Inc., 1998).
THE CASES
Complaint 1-The employee sales rep and a customer.
In Galdamez v. Potter, Galdamez, a US postal service employee,
alleged that she was subjected to a hostile work environment, due to her
Honduran ancestry and strong accent. She claimed harassment and
unwarranted discipline by supervisors, customers and community members.
While the initial court decision ruled against Galdamez, an appeals
court held that an employer may be liable for actionable harassment of
an employee by third parties if it failed to investigate and remedy the
harassment after learning of it. This decision creates a stand-alone
claim under Title VII for an employer's failure to investigate and
remedy harassment of its employees by third parties, such as customers
and community members. Galdamez v. Potter, 415 F.3d 1015 (9th Cir 2005).
While the Galdamez case involves race and national origin
discrimination, the extension of Title VII to include harassment by
customers, applies in sexual harassment cases as well. Since Susan has
reported this to her supervisor, and it has happened repeatedly, the
company should have taken reasonable steps to rectify the issue. Their
failure to do so may make them liable under the "negligence theory
of liability" highlighted above.
1) Do the actions detailed in this complaint constitute
environmental sexual harassment, that is, is this scenario sufficiently
severe or pervasive to alter the terms and conditions of your
employee's employment and create an abusive working environment?
The behavior is extreme and repeated. This would be likely to
satisfy the requirements for a hostile work environment.
2) Does your employee express a basis upon which your company can
be held liable for the harassment?
The employee has given notice to the company supervisor, providing
sufficient information to indicate that a hostile work environment
exists.
3) What could your employer do, if anything, to reduce its exposure
for liability for discrimination?
Companies should have a clear set of guidelines regarding hostile
work environments. The EEOC sexual harassment guidelines state that:
The employer should investigate promptly and thoroughly. The
employer should take immediate and appropriate corrective action by
doing whatever is necessary to end the harassment, make the victim
whole by restoring lost employment benefits or opportunities, and
prevent the misconduct from recurring. (Policy Guidance, 1990)
Complaint 2-The employee maintenance personnel and an independent
contractor.
This scenario is based on Hicks v. Sheahan, 2004 U.S. Dist. Lexis
26791 (N.D. Ill. 2004), wherein the employer argued that it could not be
liable for the actions of a person who is employed by an independent
contractor. The U.S. Supreme Court has thrown into question whether an
employer can be vicariously liable for I.K. harassment because of the
lack of agency relationship but the court in Hicks dodged the issue by
holding that courts have applied the EEOC standard of negligence
liability to situations involving harassment by a non-employee and
distinguished this case from a vicarious liability agency theory to one
involving negligence by the employer in failing to address the sexual
harassment by Wilson. The court said, "Even assuming that the
employer is correct that it did not have the authority to control an
Aramark employee, Defendant has offered no reason that it should not
have at least tried to address the problem when "Sam" was
repeatedly complaining of the harassment. The employer could have
notified Aramark of Sam's allegations and asked it to investigate
so Wilson's status as a non-employee does not preclude liability by
the employer if it is otherwise negligent.
1) Do the actions detailed in this complaint constitute
environmental sexual harassment, that is, is this scenario sufficiently
severe or pervasive to alter the terms and conditions of your
employee's employment and create an abusive working environment?
Yes. The courts look to the frequency and severity of the
harassment to determine whether it is sufficiently severe or pervasive
to alter the terms of the worker's employment. Here, the acts of
the independent contractor were subjectively and objectively frequent
and severe because of the overt sexual content and because the worker
perceived the acts to be unwelcome and offensive.
2) Does your employee express a basis upon which your company can
be held liable for the harassment?
Yes. The key to the employer's liability here is that the
worker repeatedly reported the harassment and the employer was negligent
in responding to his complaints.
3) What could your employer do, if anything, to reduce its exposure
for liability for discrimination?
The company SHOULD have fully investigated the claims, and
contacted Aramark about the harassment.
Complaint 3-Employee receptionist encounters a supplier.
This case was inspired by Fulmore v. Home Depot, 2006 U.S. Dist.
Lexis 22906 (S.D. Ind, 2006). The court reasoned that no matter how
severe this conduct the incident did not support a hostile environment claim because the conduct could not be attributed to Home Depot. The
EEOC Guidelines regulating sexual harassment state that an employer may
be responsible for harassment by an non-employee where the employer
knows (or should have known) of the conduct and fails to take immediate
and appropriate corrective action, depending on the control and other
legal responsibility the employer may have over the non-employee.
Several courts have held that discriminatory harassment by a customer or
patron can be evidence of a hostile environment claim where the employer
ratified or condoned the conduct by failing to investigate and remedy it
after learning of the conduct. Under circumstances where an employer
ratifies or otherwise condones discriminatory conduct there can be a
basis for employer liability. Here, however, no reasonable jury could
find that Home Depot ratified the conduct, ignored the complaint of
abuse or otherwise forced Mary to endure discrimination by suppliers.
Home Depot had no control over this supplier with whom it had no
business or other relationship and where the harassing behavior had
ceased Mary has failed to raise an issue as to whether Home Depot had
either the ability or the duty to do anything further. This court has
not imposed upon employers the obligation to reprimand or otherwise
punish persons over whom they have no control for harassing behavior
when the employee is no longer being subjected to the harassment.
1) Do the actions detailed in this complaint constitute
environmental sexual harassment, that is, is this scenario sufficiently
severe or pervasive to alter the terms and conditions of your
employee's employment and create an abusive working environment?
This is a very close question and the answer is mixed. Usually one
incident of harassment will not be deemed sufficiently severe or
pervasive to affect the conditions of the worker's employment. The
single remark of one of the salesmen will not be sufficient to create an
abusive working environment. However, a single incident of an offensive
and un-consented touching can constitute a basis for environmental
sexual harassment. A single incident of harassment must be exceedingly
severe to be actionable and the act of touching the worker's breast
just once will probably not constitute environmental sexual harassment.
2) Does your employee express a basis upon which your company can
be held liable for the harassment?
No. The general rule is that an employer may be liable for
discriminatory harassment by a non-employee where the employer ratified
or condoned the conduct by failing to investigate and remedy it after
learning of the conduct. Here, however, there is no evidence that the
employer ratified the conduct, ignored complaints of abusive treatment
or otherwise forced the employee to endure discrimination by third
parties in the reception area. The employer had no control over the
conduct of the visitors and where the harassing behavior had ceased
there was no evidence that the employer had the ability to do anything.
The courts have not imposed upon an employer an obligation to reprimand
or otherwise punish third parties over whom they have no control from
harassing behavior when the employee is on longer being subjected to the
harassment.
3) What could your employer do, if anything, to reduce its exposure
for liability for discrimination?
Nothing. The harassment having ceased and the third parties having
no relationship to the employer then the employer is under no duty to
act.
Complaint 4-Public Relations Employee Raped by Client.
The facts for this case were derived from Little v. Windermere
Relocation, 301 F.3d 958 (9th Cir. 2001). The issue in the case was not
whether the employer created a hostile work environment but whether the
employer's reaction to the rape created environmental sexual
harassment. Here, the employer's actions after the rape were
insufficient and negligent. The employer's failure to take
immediate and effective corrective action allowed the effects of the
rape to permeate the Public Relations employee's work environment
and alter it irrevocably.
1) Do the actions detailed in this complaint constitute
environmental sexual harassment, that is, is this scenario sufficiently
severe or pervasive to alter the terms and conditions of your
employee's employment and create an abusive working environment?
Yes. Rape is unquestionably among the most severe forms of sexual
harassment and being raped by a business associate while on the job
irrevocably alters the conditions of the employee's work
environment.
2) Does your employee express a basis upon which your company can
be held liable for the harassment?
Yes. An employer's reaction to a single serious episode may
form the basis for an environmental sexual harassment claim. Again, an
employer can be liable for harassing conduct by non-employees where the
employer either ratifies or acquiesces in the harassment by not taking
immediate and corrective actions when it knew or should have known of
the conduct.
3) What could your employer do, if anything, to reduce its exposure
for liability for discrimination?
Make an unequivocal response to the complaint and the wrongful
behavior. Here, the employer's reaction to the rape was equivocal at best. The employee was encouraged to get the account; when she
reported the incident she was not effectively removed from the account
and when she finally reported the incident to the President she was
demoted. The employer failed to prevent contact between the employee and
Guerrero such as effectively removing the employee from the account or
informing Starbucks that it must replace the contact it used with the
employer. In short, the employer failed to take appropriate remedial
measures so that its inaction can be deemed to be a ratification or
acquiescence in the rape such that it is liable for creating an abusive
and hostile work environment.
REFERENCES
Allen v. Tyson Foods, 121 f.3d 642 (11th Cir. 1997).
Berry v. Delta Airlines, 260 F.3d 803 (7th Cir. 2001).
Breda v. Wolf Camera & Video, 222 F.3d 886 (11th Cir. 2000).
Burlington Industries, Inc. v. Ellerth, 524 U.S. 742 (1998).
EEOC Sexual Harassment Guidelines (2006). Retrieved June 28, 2006,
from www.eeoc.gov/types/ sexual_harassment.html
EEOC Policy Guidance on Current Issues of Sexual Harassment (1990).
Retrieved July 3, 2006, www.eeoc.gov/ policy/docs/currentissues.html
Faragher v. City of Boca Raton, 524 U.S. 775 (1998).
Folkerson v. Circus Circus Enterprises, Inc., 107 F.3d 754 (9th
Cir. 1997).
Fulmore v. Home Depot, 2006 U.S. Dist. Lexis 22906 (S.D. Ind,
2006).
Galdamez v. Potter, 415 F.3d 1015 (9th Cir. 2005).
Guidelines on Discrimination Because of Sex, 29 C.F.R. Section
1604.11(a).
Guidelines on Discrimination Because of Sex, 29 C.F.R. Section
1604.11(e).
Harris v. Forklift Systems, Inc., 510 U.S. 17 (1993).
Hicks v. Sheahan, 2004 U.S. Dist. Lexis 26791 (N.D. Ill. 2004).
Johnson v. Booker T. Washington Broadcasting Service, Inc., 234
F.3d 501 (11th Cir. 2000).
Little v. Windermere Relocation, 301 F.3d 958 (9th Cir. 2001).
Lockard v. Pizza Hut, Inc., 162 F.3d 1062 (10th Cir. 1998).
Mendoza v. Borden, Inc., 195 F.3d 1238 (11th Cir. 1999).
Meritor Savings Bank v. Vinson, 477 U.S. 57 (1986).
Oncale v. Sundowner Offshore Servs. Inc., 523 U.S. 75 (1998).
Title VII of the Civil Rights Act of 1964, 42 U.S.C. 2000e-2
(1964).
John Hoft, Columbus State University
Neal F. Thomson, Columbus State University