Could You Be Liable If a Customer Harasses Your Employee?
Employers must address sexual harassment by customers in addition to harassment by other employers. Courts can hold employers accountable if they fail to take reasonable actions to prohibit a hostile work environment and protect an employee. While the “customer is always right” is a maxim that people in business try to follow, under these circumstances the customer is not right.
EEOC v. Costco Wholesale Corp.
A case in point is the EEOC v. Costco Wholesale Corp. case. The U.S. Court of Appeals for the Seventh Circuit reviewed the case and in 2018 ruled in favor of the EEOC.
A customer stalked a Costco employee for over a year. The employee reported the stalking to her managers. However, because the managers did not believe the harassment was severely sexual in nature, they did not take stronger actions quickly enough to prevent it. After some time, Costco did tell the customer to leave the employee alone. In fact, Costco eventually banned the customer from the store where the employee worked. However, these actions were taken after constant encounters that lasted over more than a year where the customer repeatedly stalked the employee. He constantly asked her personal questions, touched her on several occasions and then came in disguise to observe her and later on, even took a video of her.
After her third interaction with the customer, the employee filed a police report about the stalking. Subsequently, the police called the Assistant General Manager about the report, and as a result he yelled at the employee and told her to be nice to the customer. The police interviewed the customer but did not charge or arrest him. Even so, a report was filed about the customer’s stalking. More than a year later, after numerous encounters, the employee secured a Stalking No Contact Order against the customer that prohibited him from approaching her at her residence or place of employment for 21 days. When the order expired she renewed it, and the order was in effect for a year.
After more than a year of stalking, the employee went on medical leave, at which point the general manager investigated and sent the customer a notification that they were aware of the employee’s complaints. The general manager directed the customer to shop at a different Costco store, one that was equidistant from his home.
The Appellate Court’s Finding
Under the Illinois Stalking No Contact Order Act, the appellate court concluded that the customer had violated the act through his behavior and had caused “emotional distress” and “significant mental suffering, anxiety or alarm.” The customer had in fact also violated the no-contact order. (Keep in mind that New York also has a stalking law that prohibits stalking.)
Costco did not argue that it failed to take reasonable steps to bring the harassment to an end, and therefore, the court did not address it.
Our attorneys at Stephen Hans & Associates have decades of experience representing employers in work-related issues.