How can employers avoid exposure for "third-party" sexual harassment claims? This is a vexing problem that requires pro-active risk management and loss control.
A small retail business in a mall in Salt Lake City, Utah, hired a developmentally disabled teenager to work in its stock room. He was able to do his job with little to no accommodation, although his supervisor noticed that the employee needed any job instructions to be repeated or written down due to his limited span of attention.
On breaks, the employee typically took his lunch at the malls food court, which was located within a few hundred yards from the employers retail store.
When utilizing the washroom in the food court after eating lunch, the employee was approached by an employee of one of the restaurants in the food court, who made a sexual overture to him and then committed a sexual assault upon him.
A police report was subsequently filed, and the employee also reported this incident to his employer the next business day. The employer called the EPL hotline for assistance on what steps it could take to minimize the exposure of the company to a claim of third-party sexual harassment.
Most risk managers are well aware of the concepts of quid pro quo sexual harassment and hostile environment sexual harassment. However, an emerging exposure also exists for "third-party" sexual harassment. This concerns employer liability for the sexual harassment of employees by third parties, such as customers, suppliers, vendors or employees of other businesses.
The U.S. Equal Employment Opportunity Commission has interpreted Title VII of the Civil Rights Act to make an employer legally responsible for acts of harassment of non-employees in circumstances where the employer knew or should have known of the offending conduct.
By continuing to expose its employees to a situation where sexual harassment has occurred in the past and is likely to occur in the future, an employer is deemed to be legally responsible for its failure to prevent the third partys acts. Similarly, courts have ruled that an employer can be liable under Title VII where its management fails to take corrective measures within its control once it knows, or has reason to know of, the nature of the non-employees harassing conduct.
In the situation involving the assault in the food court washroom, the employer must take reasonable steps to safeguard its employee. This is because it is now on notice of a third-party sexual harassment problem involving its own employee.
There are multiple steps that the employer should undertake to minimize its exposure and protect its employee.
First, the company should advise the employee to refrain from using the washroom where the assault took place.
The employer also should advise the employee to stay away from the restaurant in the food court that employs the alleged harasser. The employer would be well served to document these admonitions, as the employees disability is such that his span of attention makes it more difficult for him to heed oral instructions.
Second, the employer should give the employee a card that contains written instructions and a managers home phone number. The employee should be advised that he needs to alert the company as soon as possible if he should experience any future problems.
Moreover, since the employee in question is developmentally disabled and might not be able to care for himself as would an adult, it might also be reasonable to assign a "buddy" to the employee to accompany him to the food court whenever the employee takes a break. In essence, this is a measure which may be required as a reasonable accommodation under the Americans With Disabilities Act.
Third, the company should contact the employer of the individual who is responsible for the alleged sexual assault upon the companys employee. Given that the police are involved in this situation, criminal exposure for that individual is likely. Nevertheless, the company should take all reasonable steps to put the other business on notice that its employee may have sexually harassed the companys employee.
The company should request the other employer to keep its employee away from the companys employee, to investigate the incident immediately, and to institute remedial measures to prevent any reoccurrence of the problem.
These steps will minimize the employers exposure to a claim of third-party sexual harassment, as well as provide a sound defense to any future claim based on the reasonable measures it took to ensure that there will be no re-occurrence of the problem.
Lisa Bee is director of EPL risk management for Lexington Insurance Company in Boston. Gerald L. Maatman Jr. is a partner with Seyfarth Shaw in Chicago.
Reproduced from National Underwriter Edition, March 10, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved. Copyright in this article as an independent work may be held by the author.
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