Don't make the mistake of thinking that because sexual harassment isn't happening within the walls of your firm, you're off the liability hook. According to Title VII of the Civil Rights Act of 1964, employers are liable for any un-welcome conduct of a sexual nature that occurs within the work environment. This means no matter where your employees are, they must not be subjected to crude comments, suggestions or implications of a sexual nature, nor may they be touched inappropriately, forced into committing sexual acts or be subjected to viewing sexually explicit objects, posters, photos or materials. If this happens, and one or more of your employees finds it offensive and complains, guess what? You're responsible.
"The employer is not strictly liable as they are when a manager harasses a subordinate. But the standard is going to be if they knew or should have known that [harassment] was going on, [they are liable]" says Susan Crawford, a partner with the Palo Alto, California offices of Holtzmann, Wise & Shepard, who specializes in sexual harassment legalities. Third-party sexual harassment cases are always difficult situations, says Crawford. "They present difficult issues for the employer to deal with because it's their client or customer, but they have the same legal obligation to remedy it," she adds.
For example, in one case of third-party sexual harassment, a waitress was harassed in a sexually explicit way by a male customer who frequented the restaurant where she worked. One particular evening, four men (including the regular customer) came into the restaurant, and while they were waiting to be served, loudly directed sexually explicit jokes and comments at the waitress. The regular customer remarked that he'd like to engage in a particular sexual activity with the waitress, which he described in explicit terms. When the waitress approached the men to take their order, one man made grabbing gestures toward the waitress's breasts. The same customer then slid his hand under her uniform and squeezed her buttocks. She recoiled in shock and anger and refused to wait on them again.
Although the waitress complained to her boss (the restaurant owner) when he arrived at the restaurant later, he failed to take corrective action against the harasser who was also his friend. She informed her boss that she had been previously subject to sexual harassment by the same man on other occasions, but had chosen not to say anything before because she feared for her job. The incident that particular evening, she told him, exceeded the boundaries of behavior that she could attempt to dismiss with the good humor required of a waitress.
Not only did the boss not tell the harasser to stop his behavior, he also didn't request that another server wait on the customer. He also failed to inform his other servers that he didn't condone sexual harassment in the workplace. In addition, the owner subsequently fired the waitress after she had complained about the harassment.
The court decided that because the evidence showed that immediate and appropriate corrective action was within the employer's control, and because he failed to take any action when his employee first complained or soon thereafter, the restaurant owner was responsible under Title VII for the sexual harassment that the waitress endured while on the job.
Specifically, sexual harassment by third parties may be a violation of Title VII, as amended, which defines harassment as: Unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature when 1) submission to such conduct is made either explicitly or implicitly a term or condition of an individual's employment; 2) submission to or rejection of such conduct by an individual is used as the basis for employment decisions affecting the individual, or 3) such conduct has the purpose or effect of unreasonably interfering with an individual's work performance or creating an intimidating, hostile or offensive working environment.
Pay particular attention to point #3 above, because that's how most third-party sexual harassment will insidiously make its way into your organization. Most third-party sexual harassment, like harassment between two employees, isn't overt. It's environmental and, therefore, can be difficult for supervisors and managers to detect. For instance, it may be those certain glances that customers give your employees when they call on them. It may be sexually suggestive posters or artwork that decorate the offices they visit. It may be those requests employees get to "stand a little closer" to clients while they make their presentations. All these may add up to an uncomfortable working relationship for your employees. And you'll want to know about them.
Harassers can be a photocopier repair person, an external accountant, a supervisor at an outsource-services company or your next-door business neighbor. They even can be the family, friends or acquaintances of your employees. If any of these individuals engage in behavior or conversations that are offensive to your employees while they're on the job, your company is liable and you must take action to stop it immediately.
You will need your employees' full attention and support to track down and eliminate this kind of discriminatory work environment. The way to get your workers' attention is by having a written policy that lets every employee know you won't tolerate sexual harassment from other employees, or from anyone with whom they come into contact during the daily performance of their jobs.
How to curb incidents of third-party sexual harassment.
First, have a policy that takes an unwavering stand against sexual harassment at your workplace. In every state, if you employ 15 or more people, the law requires that you have such a policy or address sexual harassment in some way. Don't let any worker get too much farther than your front door before you hand them a copy. That goes for new employees, temporary employees, contingent workers and independent contractors. State in your policy that you won't tolerate sexual-harassment by insiders or outsiders.
For example, New York City-based Price Waterhouse's sexual harassment policy explicitly states that: "Sexual harassment of any Price Waterhouse staff member by a partner, another staff member or client, or other non-Price Waterhouse employee will not be tolerated."
Avon Products, Inc., in New York City, words it this way: "This policy applies to conduct in the workplace, at company functions, and in all employment relationships, and protects employees at all levels and positions within the company." Ron Shane, manager of HR policy and practices for Avon, adds: "We also point out that in terms of sexual harassment, it doesn't mean it happens on the premises. If an Avon associate is traveling abroad or traveling on business someplace, the same policy applies as well."
And New York City-based Corning Incorporated's guidelines tell employees that: "[Sexual harassment] can occur between co-workers, subordinate and supervisor, outside vendor and employee, etc." Corning's guidelines further say that, "...sexual harassment will not be tolerated in any form, whether committed by supervisors, other employees or non-employees. Any individual found violating this policy can be subject to disciplinary action up to and including termination, and possibly prosecution by the victim."
Next, reinforce the policy by training your employees about sexual harassment. "[Employers] need to train their supervisors and managers to make sure that the company is responsible for protecting its employees from third-party harassment, or from keeping its employees from harassing third parties," says Crawford.
For example, E.I. DuPont de Nemours and Company based in Wilmington, Delaware, trains its employees about third-party sexual harassment during its sexual-harassment workshops. The training involves a series of seven, three-minute videotaped vignettes interspersed with question-and-answer sessions after each tape. The scenarios are based on actual events that have happened to DuPont employees. Two of the vignettes deal with third-party harassment. The first shows Joyce, a DuPont sales rep, dealing with Michael, a vendor. The two have spent a considerable amount of time trying to work out a business deal. Michael comes on to Joyce and says things such as, "You want my business, don't you?" inferring that Joyce should sleep with him to close the deal.
This example shows not only a third-party harassment situation, but also demonstrates quid pro quo harassment, ("this for that"). Quid pro quo sexual harassment bases the condition of employment or a business deal on whether or not one person submits to performing sexual favors for another person.
Bob Hamilton, diversity consultant for DuPont, says this particular scenario usually sparks at least a 20-minute discussion. "It's very important that [employees] understand how their management feels about these issues, what kind of support they have, and know that we don't do business that way," says Hamilton. And, he adds, they need to know this before they're confronted with the situation. "[They need to know that] we don't need to use sex or the inference of sex to sell a product. If it's dependent on that," he quips, "then we need to do more work on the product."
During training, be particularly careful to alert managers to the fact that they can be held personally liable for any third-party sexual harassment that happens under their supervision. "If you're an agent of the corporation," says Hamilton, "it's deemed that you have a higher level of responsibility, and therefore a higher level of expectations around behavior." The law says that if you know or should have known about sexual harassment, you have an obligation to do something about it. "It's not clear in the law what you have to do, but you have to take action," he adds. Hamilton recalls one legal battle at a Minnesota trade school in which a human resources director and the dean ended up with a higher personal liability than the perpetrator. Although the harassee reported the sexual harassment to senior officials, they chose to do nothing about it. The courts deemed the company's neglect as gross misconduct and duly punished the organization for it.
Employees are often surprised to learn their company is liable for sexual harassment by people outside their organizations. "One reason that we don't have more complaints of this type yet is because some employees aren't aware that that is prohibited harassment," says Marcia Haight, a sexual harassment expert and president of Haight Consulting in Pacific Palisades, California. "They think it has to be harassment by another employee." Indeed, most employers haven't focused on outsider sexual harassment in their training programs, but are beginning to do so with more and more frequency. "The more training and awareness there is, the more employees understand what isn't acceptable, the more complaints of this type you'll see," adds Haight. Getting more complaints, say the experts, isn't necessarily a bad thing. If employees are talking with you, it gives you the chance to remedy the situation—hopefully before they take action outside, such as filing a complaint with the Equal Employment Opportunity Commission (EEOC).
The EEOC, which is responsible for tracking sexual-harassment complaints, doesn't track third-party harassment cases, although it investigates and prosecutes them. So, there's no telling how many cases among the 12,537 complaints it received in 1993 (twice as many as in 1990) are because of third parties. Yet, companies and sexual-harassment experts say that harassment by outsiders is a pressing and constant problem that is not often discussed—but should be.
Sexual harassment is also a corporate resources drain. According to Boston-based sexual-harassment consultant Freda Klein, sexual harassment costs a typical Fortune 500 company $6.7 million a year ($282.53 per employee) in legal costs and other employee-related expenses, including loss of productivity and absenteeism. DuPont's Hamilton says an investigation alone can cost $20,000 to $30,000. "So it's really a green issue, a money issue," he says.
Of course, training costs money, too. With so many demands on organizations to conduct many types of training to ensure that their staffs are well-equipped to operate in the global marketplace, why are companies placing so much importance on sexual-harassment training? Quite simply, because sexual harassment is such a sensitive topic. "It's much more personal than, say, business ethics, where somebody finds a voucher and embezzles money from the corporation," says Hamilton. He explains that with sexual harassment, the impact upon the employee is more personal and usually affects someone rather than something. "If someone steals a computer, there isn't personal harm done to another employee," he says. "But if somebody harasses someone else, they're doing a whole lot of things." It causes workers to produce less, get sick more often, call in sick more and change their demeanor. If people can't respect each other in the workplace, including those from outside their company, it becomes very tough to get any work done.
Here are the first steps in handling outsider sexual harassment.
Even when you have an explicit policy against third-party sexual harassment and an effective training program, employees still may be harassed by people over whom you have no control—namely, outsiders. So you need to establish a procedure to follow when you find out about an incident.
First, just as you do with harassment problems between employees, give workers options about whom to report sexually harassing activity from people outside the organization. For example, DuPont has a sexual-harassment hotline available to every employee 24 hours a day, 365 days a year, just like an employee assistance program. "[The hotline] started out as a rape-prevention hotline," explains Hamilton. "Many times, people need to have a place where they can talk and vent and get some support and counseling without going directly to their manager. So that really generated a lot of confidentiality around this." The hotline provides employees with a confidential way to speak with professionally trained, caring people who will talk them through questions and concerns, and who will give them information about where to report incidents of sexual harassment, including third-party harassment.
Sometimes, employees don't want to talk about the problem in concrete terms such as identifying who's harassing them. "When that happens, your hands are tied [because] you don't know who it is and you don't know what's happening," says Hamilton. "It becomes very hard to resolve it." That's why, in addition to its help line, DuPont also has 100 facilitators in the corporation whose job it is to meet with employees who want to talk about their sexual-harassment concerns and support those employees if they want to go to their managers or human resources representatives to formally report the problems.
Reporting can be a tricky question in cases of third-party harassment. Another vignette in DuPont's sexual-harassment training deals with this problem. It shows an employee who's working for an outside contractor and who is harassed on the job by an employee of that organization. The dilemma in resolving this situation is that the harassed employee, in a sense, has two bosses. So who does he report the harassment to? The employee is encouraged to report the problem either to his onsite boss or to his DuPont supervisor or another DuPont representative.
Once employees report, what's next? If possible, have the employee say something directly to the person who's harassing him or her. Have them explain their company's policy against sexual harassment, and tell the harasser that their actions are against the law. Also have them explain that they find certain language, behavior or objects personally offensive, and that they do not want to see, hear or experience it again.
Advise workers, however, that people who offend their sexual sensibilities may not realize what they have done. "We try to get people to understand that they're dealing with a person, and everyone has the right to be made aware when they're doing something that's inappropriate," says Hamilton. That person should have the opportunity to correct his or her behavior. In fact, Hamilton says that what most people who are harassed want is simply for the harassment to stop and for behavior to change. They don't want retribution. They just want to work in a harassment-free environment.
Realize, however, that it may be difficult for some employees to speak out against harassment. Kit Goldman, managing partner for Live Action Training, a sexual harassment training organization based in San Diego, says that the hospitality industry is a perfect example of a group of people who are trained to be accommodating and service-oriented, and who may feel that such dialogue directly conflicts with their service training. However, because they have high guest-contact jobs, they have plenty of opportunity to be subjected to harassment. "They may feel that they are being rude if they tell someone not to say certain things or to engage in certain behaviors," says Goldman. "So we try to give them positive ways, non-confrontational ways, to say something. But not everybody is that assertive, so we say if you feel threatened or you just can't bring yourself to [confront the person], then please let someone know." Because from the supervisor's point of view, if they don't have an opportunity to deal with it, that person becomes a walking time bomb. "They could leave the company two months from now and file a lawsuit and nobody could do anything about it," she adds.
If employees can't or won't say something to harassment perpetrators themselves, you need to ask them what they would like to see happen next, and explain their options. Do they want you to speak to the employee's supervisor at the other company? Would they speak out if a manager or human resources professional went along with them on their next sales call? Do they want you to be there the next time the harasser comes into the office? Do they want you to draft a letter to the person? Do they want to file formal charges?
"[Employers] obviously aren't in a position to discipline the harasser, as they are when it's their own employee, so the types of remedies that are available are going to be somewhat narrow," says Crawford. She explains that remedies run the gamut from kicking a customer out of a bar and telling him not to come back to telling a sales employee that the next time he or she is scheduled to meet with a client who has harassed him or her in the past, a manager will go along and will make it clear to the harasser that that kind of behavior is unacceptable and won't be tolerated.
Avon takes this approach. "If a third party is guilty of harassing one of Avon's associates, we want the associate to come forward and report those complaints to us. We, in turn, will deal with the third party," says Shane. "For example, let's say that it's one of our vendors. We'd go back to that vendor or the vendor's president, and maybe have that salesperson taken off our account."
Whatever the decision, take immediate action and do everything possible to respect the privacy and the dignity of the individuals involved. For example, if you go with a sales employee to discuss a sexual harassment problem with an outside client, meet in a room where you can discuss the matter in private. You may consider bringing two tape recorders and taping the conversation. At the end of the conversation, date it. Keep one and hand one to the other person to take with them. It will be a reminder of the meeting and will help document that you have put the other person on notice.
One of the smartest strategies is the one taken by Texas Instruments' HR professionals. They've learned that some problems can't be taken care of simply by having employees speak to their offenders, such as asking them not to tell any more dirty jokes or not to display a sexually suggestive poster in their public work area. "If the harasser is the employee of a third party, we get in touch with their HR people to let them know what the situation is, and then we partner with them to try to find out the facts," says Dee Hunter, diversity manager for Texas Instruments' semiconductor group in Dallas.
Whenever Texas Instruments, which has 35,000 employees in the United States, has had to approach another organization about a sexual impropriety, Hunter says his HR counterparts at the other firm are always willing to get to the heart of the matter and get it resolved. "I think it's critical for us to partner with other companies, because we have to have an environment where people feel like they're valued, and [partnering] helps us to win," says Hunter. And, if another company comes to you with complaints of harassment by one of your employees, you should cooperate fully in their investigation of the incident or incidents.
New York City-based Ernst & Young LLP has found that other companies appreciate knowing about their concern regarding these types of problems and cooperate from the start. "If [another company has] a person on their staff whose behavior may be inappropriate, he or she probably has conducted themselves inappropriately internally [within their own companies] also," says Rosemarie Meschi, diversity director for Ernst & Young's national human resources group. "The [company's] usually appreciative of the fact that we have brought it to their attention and done so in a discreet manner that allows them to let their own internal policies carry through."
Cut the ties that bind.
Despite the aggressive tactics mentioned above, some companies must take even harsher action. One of the most effective strategies that companies use to get another company's attention on a sexual-harassment problem is to establish a procedure of "kicking it upstairs," says Haight. "Call the president of the [other] company and say, 'I'm calling you because I want to handle this in the very best way. What do you think would be the best approach?'" she says. Most times, as you can imagine, this gets the ball rolling immediately.
If this doesn't work, you may be forced to cut the cord completely. Says DuPont's Hamilton, "We have refused to deal with [certain companies] again. We say that if that's the way that you're going to do business, we do not want to do business with you in the future." Period. End of relationship. It not only sends a strong message to the client, it also reinforces the policy with your employees and builds respect for the way you do business.
Under no circumstances should you attempt to kid yourself into thinking that your employees might not be facing situations of sexual harassment. It can happen to companies of any size. For example, a sales employee at a small company talks about an ongoing sexual-harassment problem that she has had with a client. Her employer has yet to help her eliminate the problem. "I see this certain client at trade shows twice a year. He's the president of the company and is an older man. He always puts his arms around me and wants a kiss and a big hug. I always know that it's going to happen, so I go call on him the first day of the trade show so that I get it over with and don't have to think about it anymore. I don't think he really knows what he's doing, but I really hate it. It's awful, but I'm reluctant to say anything because he's a good client."
This example highlights perhaps the stickiest, and potentially the most damaging, kind of third-party sexual harassment situations—when a senior executive of a client company sexually harasses one of your employees. It's like paying for a date and expecting physical intimacy afterward. Just because a client spends money with your company doesn't give them the right to take advantage of your company's representatives. "Many times, harassment is as much a power issue as it is a sexual issue," says Hamilton.
"Often, compliance with these laws and policies are in conflict with economic and political realities," says Goldman. It hurts to cut ties with customers who spend large amounts of money with you. However, million-dollar sexual-harassment lawsuits aren't worth the trouble of figuring out who's the more powerful. And, ultimately, your company must decide whether its reputation is worth the cost of any customer's contract.
"The thorny issues in this area of third-party harassment arise when the offending party is your lifeblood, your best customer," says Crawford. "By no means can you say [to your employees], 'This is an important client. Play along with it.'" She adds: "Most people will not fire their customer easily, but it's an option they should keep available in their bag of tricks."
Ernst & Young does. According to Meschi, the firm will sever relationships if a reasonable solution to sexual harassment can't be worked out with another firm whose employee has committed sexually harassing behavior. With 75% of its work force consistently out in the field serving clients' needs, Ernst & Young has a tremendous potential for third-party sexual-harassment problems. Although it has had a zero-tolerance policy on sexual harassment for many years, the professional services firm trained its entire 20,000-employee U.S. work force last year on sexual harassment because it's trying to prevent all types of sexual harassment, including third-party harassment.
With harassment problems, there never is one strategy that works in every case. You have to look at your alternatives and know what your objectives are—which is to immediately stop the harassment, but also to try to preserve the relationship, if possible.
If you already have a policy on third-party sexual harassment, you're ahead of the crowd. But if you don't, you may consider learning from your colleagues who have one. Although your company may be one of the lucky ones that's never had to deal with sexual harassment from outsiders, or that's never had to discipline one of your employees who has committed this crime, it probably isn't a chance you'll want to take. It's certainly better to be penny wise, than pound foolish.
Personnel Journal, July 1995, Vol. 74, No. 7, pp. 42-53.