Employers are familiar with the consequences of harassment in the workplace and their obligation to efficiently handle harassment claims when the harassment arises from within, such as when an employee, supervisor, or other member of management is involved in prohibited conduct. However, employers must also be aware that harassment claims may arise from the conduct of a third-party nonemployee and should be similarly handled to protect the safety of the workplace.
On November 18, 2021, the Ninth Circuit Court of Appeals provided an important decision in Fried v. Wynn Las Vegas, which alerts employers that they are required to take appropriate measures to respond to harassment claims arising from a third party’s conduct or risk being held independently liable for sexual harassment and/or creating a hostile work environment.
In Fried, Vincent Fried was a manicurist at a salon in the Wynn Las Vegas Hotel when a customer explicitly and sexually propositioned him, making Fried feel “absolutely horrible” and “uncomfortable.” Fried immediately went to the salon’s front desk and reported the customer’s conduct to Barajas, Fried’s manager. Barajas took no action to stop the customer’s conduct, but rather directed Fried to simply finish the pedicure and “get it over with;” therefore condoning the customer’s conduct and conveying that sexual harassment would be tolerated in the salon without any recourse from the employer. As a result, Fried was subjected to extended personal contact with the customer in order to complete the service.
The Ninth Circuit reasoned that an employer can create a hostile work environment by failing to take immediate and corrective action in response to a coworker or third party’s prohibited harassment or discrimination that the employer knew or should have known about. So, employers may be held liable for sexual harassment committed by nonemployees in the workplace, if the employer knows or should have known of the conduct and fails to take immediate and appropriate corrective action.
Employers should be conscientious in how they respond to a third party’s prohibited conduct in the workplace and should take immediate and effective remedial action or risk liability. Failing to intervene once the employer is aware of the harassing conduct or responding in a manner that exacerbates the hostile work environment can independently subject an employer to liability.