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Situation Clearly Abusive
Employer "Knew" About Harassment, Should Have Taken Action
Supervisors Must Act or the Employer Pays
You probably know that employers can
be liable for
harassment
by their employees. But, did you know that
they could be responsible for
harassment by nonemployees and
customers, too? This case shows just how expensive that liability
can be.
[Creating HR Policies or Employee Handbook?]
A lot has been written and said about
an employer’s liability for
sexual harassment
by its own employees.
However, employers also can be liable when a nonemployee harasses
one of their employees. A recent decision by the Tenth Circuit Court
of Appeals demonstrates that an employer must prevent and respond to
a hostile work environment caused by nonemployees, such as
customers, or face legal liability for it. In Lockard v. Pizza Hut,
Inc., et al., No. 97-7078 (12/14/98), the Tenth Circuit upheld a
jury verdict of $200,000 in compensatory damages against an Oklahoma
Pizza Hut franchisee for allowing a hostile work environment created
by two customers who harassed a waitress.
Situation Clearly Abusive
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Prior to the incident that lead to the legal action, a waitress
claimed that two male customers had made sexually offensive comments
to her on several occasions. She told her supervisor she did not
like waiting on them, but did not mention the nature of their
comments. When the men returned to the restaurant, she asked
permission not to wait on them. Her supervisor refused, despite her
previous complaint. The men again made offensive comments, and one
grabbed her by the hair. She reported the incident to her supervisor
and asked to be relieved from waiting on the men, but was required
to continue serving them. When she returned to their table, one of
the customers again pulled her hair, then grabbed her breast and
placed his mouth on it. In response, the waitress refused to
continue working, left the premises, and quit. She filed the
harassment suit and claimed that her emotional condition
deteriorated to the point that she feared going out in public and
could not continue to work.
In her harassment suit, the
waitress made a number of claims under both state and federal law.
Some of the claims were either thrown out at the district court
level or overturned by the Tenth Circuit (i.e., a finding of
liability against the parent company). However, the Tenth Circuit
upheld the most important claim against the Pizza Hut franchisee. It
affirmed the jury’s determination that the franchisee was liable for
the hostile work environment, the abusive and sexually harassing
actions of the customers, and the $200,000 award.
Employer "Knew" About Harassment, Should Have Taken Action
In upholding the decision for the employee, the Tenth Circuit first
addressed whether the incidents complained of created a hostile work
environment. The court relied on prior Supreme Court decisions that
provide guidance on the factors to be considered in determining the
existence of an illegal hostile work environment, including: the
conduct’s frequency, the conduct’s severity, any physical threat or
humiliation (as opposed to merely offensive remarks), and the
conduct’s unreasonable interference with the employee’s work
performance. The Tenth Circuit found that the physical contact by
the customer was clearly threatening and humiliating and, while
limited to one incident, was severe enough to create an illegal
hostile work environment.
Next, the court addressed whether
an employer should be liable for the actions of nonemployees. The
court looked first to regulations issued by the Equal Employment
Opportunity Commission (EEOC) which state that employers are
responsible for the harassing conduct of nonemployees and have a
duty to prevent and remedy it when they know or should have known
about the harassment. The Tenth Circuit adopted the EEOC’s position
and agreed with three other Circuit Courts of Appeals (the First,
Eighth, and Ninth) when it ruled that an employer is liable for a
hostile environment regardless of whether it "was created by a
co-employee or a nonemployee." The court found that the waitress’s
supervisor clearly knew about the problems and had the means and
authority to avoid what was an abusive and potentially dangerous
situation. According to the employer’s policy, he could have
directed a male waiter to serve the men, served them himself, or
asked them to leave the restaurant. When the supervisor did not take
any remedial action, the employer was then liable for the harassing
conduct by the customers because a management-level employee knew
about the harassment and did nothing about it.
Supervisors Must
Act or the Employer Pays
The Tenth Circuit’s decision in this case demonstrates the judicial
trend towards finding employers liable for hostile work environment
misconduct by nonemployees, such as customers. Dealing with
harassing customers can be difficult, though, especially when you
feel as if you must choose between your employee and the source of
your business in-come. It is clear from this case, however, that you
have an obligation to protect your employees from harassment, even
if it is not convenient or good for business.
Two points in the case drive home
how easy it is to be liable for
nonemployee harassment. First, the
employer was liable after only one incident, because the supervisor
did not take the appropriate action to stop the misconduct. Second,
it was liable even though it had a policy directing supervisors to
either reassign an employee in this situation or ask the abusive
customers to leave. Where the employer failed, it appears, is in
making sure its supervisory employees followed its policy. Thus,
employers should train supervisors in their sexual harassment
policies and reinforce the policies through periodic reviews to
ensure that supervisors understand their obligation to prevent all
forms of harassment. |
Personnel
Policy Service, Inc.
