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Companies, Hit With Suits, Find Customer Isn’t Always Right

Dec. 14, 2018, 11:16 AM

Nicholas Drayton-Hamilton worked for two years at a Capital One branch in Rockaway Park, N.Y., and says customers called him a gorilla, used racial slurs including the N-word, and told him he didn’t belong there because he’s black.

“When these things would happen, I would report it,” Hamilton told Bloomberg Law, but “nothing was ever done.” Hamilton was fired, he said, after one customer visited the branch three times in one week, escalating his verbal racial attacks, until Hamilton stepped outside to stop the behavior.

He sued Capital One late last month, alleging that he was racially harassed by customers, and his branch manager and the bank did nothing to stop it.

Hamilton’s account of harassment by a customer is just one of many popping up in federal discrimination lawsuits throughout the country, as workers in industries ranging from banking and retail to restaurants and nursing homes challenge the oft-repeated motto of “the customer is always right.”

“In the wake of the #MeToo movement, employers may be more attuned to it than in the past, but I still think there are a lot of employers that don’t understand they may be liable for this,” Aliaksandra Ramanenka, a plaintiff’s attorney in the New York office of Outten & Golden, told Bloomberg Law.

Companies have been losing customer harassment cases in court.

Costco Wholesale Wholesale Corp. was ordered to pay a $250,000 jury verdict in September after a federal appeals court found that the company didn’t do enough to stop a customer from stalking a female employee. Adverse court rulings have also hit Urban Outfitters Inc.—which privately settled in May, days before trial, allegations that it didn’t stop a customer from taking pictures up a worker’s skirt—and a Mississippi assisted living facility that allegedly failed to act on a mentally ill patient’s repeated sexual harassment of staffers.

Workers are demanding employers find solutions to protect them from customers who behave badly. Some industries—particularly hotels and restaurants—are heeding that call. Marriott International Inc., for example, has given panic buttons to its employees, while at least one eatery has developed a color-coded system to shield its servers.

“You can’t fire a customer, but there are other actions you can take,” Michelle Phillips, a management-side attorney in Jackson Lewis P.C.'s White Plains, N.Y., office, told Bloomberg Law. Those actions can include contacting the customer’s employer, if known, banning the customer, or filing a police report, she said.

“If a company becomes aware of a harassment by a customer, then the company has an obligation to take prompt and remedial action to prevent the harassment,” Phillips said.

A Capital One spokesperson said the company doesn’t comment on pending litigation.

Color Coding ‘Creepiness’

One industry that’s tackling the issue of customer harassment head-on: restaurants.

Servers at San Francisco-area restaurant Homeroom came forward with complaints of rampant customer harassment in 2014, Erin Wade, co-founder and CEO of the restaurant, told Bloomberg Law. “I got a flood of emails from our servers and hosts saying they were experiencing issues and requested a meeting.”

From that meeting stemmed the idea to create a system that codes customer behavior by color. Yellow means a server has experienced a “creepy vibe” from a customer, orange communicates a creepy vibe plus an ambiguous comment, and red means an overtly sexual comment or touching has occurred, Wade said. At any stage, the server is able to stop interacting with the customer and a manager will take over. A code red results in the customer leaving at management’s request.

“It’s really helped dramatically curb the red instances that were occurring,” to only about one a year, Wade said. “When you change the power dynamic at the lower level of harassment, it reduces escalation to a more threatening or harassing action.”

The National Restaurant Association published guidance this year for servers and managers with recommendations for asking staff about harassment and how to take action.

“Our industry—like so many others—is confronting this challenge as our collective awareness has increased about this problem in society,” Dawn Sweeney, president and CEO of the organization, said in a statement provided to Bloomberg Law. “That is why we have instituted improved training programs for our members to help prevent and respond to this behavior in the workplace.”

Panic Button Protections

The hospitality industry also is finding that technology may hold the key to protecting employees who work alone and could be vulnerable to harassment or assault.

Marriott International announced in September it would be ramping up worker use of panic buttons for housekeepers and other workers so they can “discretely summon help if they feel harassed in any way.”

The worker safety initiative will be in more than 5,000 hotels in the U.S. and Canada, according to the company.

Voters also are supporting this solution. Oakland, Calif., residents in November approved a measure to require hotels give workers panic buttons, following a similar mandate in Chicago that took effect in July.

“As we’re in this #MeToo, #Time’sUp time, there’s an increased scrutiny and emphasis on sexual harassment and a hyper vigilance on actions against employees,” Phillips said. “It’s not enough to just react. You have to be proactive.”

To contact the reporter on this story: Genevieve Douglas in Washington at

To contact the editor responsible for this story: Jay-Anne B. Casuga at