Sixth Circuit: Limited Liability for Employers for Harassment by Third Parties
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APPLIES TO All Employers with Employees in KY, MI, OH, and TN |
EFFECTIVE August 8, 2025 |
QUESTIONS? Contact HR On-Call |
Quick Look
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Discussion
On August 8, 2025, in Bivens v. Zep, Inc., ruled employers are not liable for harassment that occurs to its employees by third party non-employees unless the employer intended for the harassment to occur. Here, the plaintiff sales representative informed her supervisor that a customer locked her in his office and asked her repeatedly if they could date. The supervisor reassigned the client to another sales team. A few months later, the sales representative was terminated as part of a company-wide reduction in force for employees who did not meet their sales goals. The sales representative sued the defendant for hostile work environment, harassment, retaliation, and discrimination in violation of Title VII of the Civil Rights Act of 1964 and Michigan state law. The district court dismissed all of the plaintiff’s claims, so she appealed her claims to the Sixth Circuit.
The Sixth Circuit upheld the district court’s dismissal, but its rationale for dismissing the harassment claim varied from the standard enforced by the Equal Employment Opportunity Commission (EEOC) and other circuit courts. The standard for determining whether an employer is liable for a third party’s harassment is whether the employer “knows or should have known of the conduct and fails to take immediate and appropriate corrective action.” The Sixth Circuit court found that for the plaintiff to hold her employer liable for hostile work-environment harassment, she must show that the employer intended for unlawful harassment to occur. A plaintiff could show this by providing evidence that the employer wanted to cause the harassment or was “substantially certain” that harassment would result from its actions. The court cited the U.S. Supreme Court’s ruling in Bostock v. Clayton County which required a showing of intentional discrimination for sexual harassment creating a hostile work environment. In addition, the court cited agency law principles which allow for vicarious liability for the acts of employees but not to third party non-employees.
The court acknowledged that its analysis deviated from the standard long set by the EEOC and other circuits. It remains to be seen whether courts outside of the Sixth Circuit will adopt or be persuaded by its analysis to change their interpretation of enforcement of Title VII harassment claims involving third parties in employment situations. Employers should be aware that this ruling does not change their obligation to promptly investigate and address complaints of harassment or discrimination in the employment setting when third parties are involved.
Action Items
- Provide adequate reporting procedures for claims of harassment or discrimination.
- Promptly investigate claims of harassment or discrimination including those alleged against third party non-employees.
- Train appropriate personnel on the requirements.
- Consult with legal counsel regarding risk exposure for alleged harassment or discrimination of employees by third party non-employees.
Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2025 ManagEase