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Built on Relationships and Integrity

Why businesses can be liable for employee harassment by customers

As a business owner, you are proud that you've established a workplace where discrimination and harassment (including sexual harassment) are not tolerated. Your employees at all levels know that it's unacceptable and that if they report it, they'll be taken seriously.

However, you have far less control over customers than you have over your employees. Often, customers are the ones who instigate workplace harassment. What happens if an employee reports that they were sexually harassed by a valuable client when they went to their office? What if a waitress at your restaurant reports that a customer who spends thousands of dollars there every month directed a racial slur at her? Would you treat those allegations the same way you would if they involved another employee?

As an employer, you're obligated under the law to maintain a workplace free of harassment based on gender, race and other characteristics. That workplace environment extends to behavior by customers.

You might lose a customer who brings in a lot of money if you confront them about the allegation. However, if you don't investigate your employee's allegation and deal with the issue, if you confirm there is one, you could find yourself facing a lawsuit for allowing a hostile work environment. Employers have been held legally responsible for the actions of a non-employee if they occur in the workplace or while an employee was doing their job (perhaps making a delivery or attending an off-site meeting).

It's crucial not to minimize a customer's behavior. It may be tempting to assure your employee that the customer meant no harm -- that they're just from a different generation or can't handle their liquor. However, by brushing off such behavior -- especially if you don't take steps to stop it -- you're essentially telling that employee and others that you value your customers more than them.

Remember that saying you didn't know about the harassment doesn't free you from liability if you should have known. Were there regular complaints about a customer? Did your employee feel like they couldn't tell you about the harassment? Did observers report the behavior even if the victim didn't? These things can be considered factors if the matter ends up in court.

If you're dealing with a case of alleged harassment of an employee by a customer, it's wise to talk with your attorney to make sure that you're taking the appropriate steps.

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