When is the Customer Not Always Right? When they are Harassing your Employees

In this country, companies frequently instruct their managers and employees that the “customer is always right,” particularly in the consumer, entertainment, and hospitality industries. Perhaps for this reason, businesses can be slow to address the unlawful harassment (including sexual harassment) of employees by non-employees, including customers and vendors.

According to the EEOC guidelines on workplace harassment (found at 29 C.F.R. § 1604.11(e)), as well as every court that has addressed the issue, an employer may be held responsible for the acts of non-employees, with respect to the sexual or other unlawful harassment of its employees, when the employer (1) knows or should have known of the conduct, and (2) fails to take immediate and appropriate corrective action.

The EEOC recently filed suit against Costco Wholesale Corporation over its alleged failure to protect a female worker from being stalked by a customer. According to the EEOC, the employee at issue had repeatedly complained to her managers about being pursued by a customer at the store where she worked, but despite her complaints (and the fact that she eventually had to secure a protective order against the customer), the company's managers allegedly failed to take steps to resolve the situation.

Needless to say, dealing with harassment by a non-employee can be difficult, especially when the harasser is a valued customer or vendor. Employers, however, have a legal obligation to protect their employees from unlawful harassment, even if doing so is inconvenient or ultimately could result in the loss of the customer or vendor (and attendant revenue). If you have questions about how to properly address and prevent harassment by non-employees, please contact your Elarbee Thompson attorney, or respond to this email.