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Employers Risk Liability if Customers Discriminate in Workplaces

Sept. 19, 2022, 9:00 AM

Employers may lean toward taking a hands-off approach when customers or other third parties exhibit discriminatory behavior in a workplace, but the US Equal Employment Opportunity Commission takes a dim view of laissez-faire attitudes and will sue.

Case in point: A recent lawsuit the EEOC filed against a Vermont nursing home that it said allowed mostly White patients to subject Black nurses to racial harassment. The agency said the long-term care facility in Burlington, Vt., had allowed the patients to use racial slurs, among other harassing behavior.

“I do think there is an obligation to have policies in place for how you’re going to deal with the issue when it arises because you’ve got to know that it’s going to arise,” said Maxine Neuhauser, an attorney at Epstein Becker & Green PC. “Any employer should know that its employees are entitled to not be abused in the workplace.”

It’s not uncommon for employers to take a hands-off approach to third-party discrimination, according to Aliaksandra Ramanenka, a New York-based plaintiff’s attorney at Outten & Golden.

“I don’t think a lot of employers realize they might be liable to their employees for the conduct of a third party,” she said. “That is a common thread in the cases I’ve dealt with.”

Not addressing the discrimination at the nursing home violated Title VII of the 1964 Civil Rights Act, the EEOC said, noting that it’s an employer’s responsibility to take “prompt and effective remedial action” to prevent discrimination in the workplace.

No ‘One-Size-Fits-All’ Remedy

Neuhauser said general harassment complaint protocols could be useful for employers in addressing worker abuse by third parties.

Bigger employers with large human resources departments, legal teams, and employee handbooks likely have the tools in place to address such complaints of harassment, said Eric Meyer, a partner with FisherBroyles.

Complaints from nurses at the Vermont nursing home were ignored, according to the agency, with one manager allegedly telling a victim they should be used to being the target of racial slurs because they’re “from the South.” Not making sure managers know how to handle those types of complaints is one of the biggest mistakes an employer can make, Meyer said.

“That is worse than doing nothing,” he said. “That is basically saying to your employees that they have to suck it up, and that doesn’t work as a response.”

The law is vague when it comes to what exactly employers should do when a third party discriminates against their employees, Ramanenka said.

“It can be different, it’s not one size fits all,” she said. “It depends mostly on the level of control the company exercises over the customer, client, or patient.”

At a construction site, for example, a company could communicate with a third-party contractor to discipline an employee harassing other workers on the job. In a bar or restaurant, management could kick out a patron who is disrespecting employees.

Health-Care Conundrum

A health-care setting—particularly those treating mentally impaired patients—is unique in that employers need to balance their obligation to provide care with their obligation to protect workers from harassment.

“What the law tasks the employer to do once they’re on notice of this type of behavior is to take steps that are reasonably designed to end the behavior,” Meyer said. “So what’s reasonable on a construction site may be different than what’s reasonable in a home health setting, which may be different than a school setting.”

In 2013, Hurley Medical Center in Michigan entered a $200,000 settlement with the EEOC in a similar case that claimed the hospital discriminated against a nurse when it complied with a father’s request to not let her treat an infant because she is Black.

Julie Gafkay, a Michigan attorney who represented the nurse, said this third-party bias issue has particularly persisted in the health-care industry. While employers often find it easiest to grant a patient’s race-based request, that “gives the prejudice power” and not the employee, she said.

“Patients make unreasonable requests all the time,” Gafkay said. “That doesn’t mean the facility has to grant every request, and in fact, unreasonable requests are denied all the time. Why is it being entertained?”

A proper way an employer could handle that type of request would be to deny it, inform the worker the request was made, then let them choose whether they wish to continue serving the patient, she said. In scenarios involving patients who may be impaired—such as in a nursing home—employers should lean on protocols already in place for aggressive patients.

“It’s a difficult balance but a way to handle it would be to take away race in the equation. I’m sure there are circumstances where patients become hostile and it has nothing to do with race,” Gafkay said. “How does the facility handle that?”

To contact the reporter on this story: J. Edward Moreno in Washington at jmorenodelangel@bloombergindustry.com

To contact the editor responsible for this story: Martha Mueller Neff at mmuellerneff@bloomberglaw.com;
Rebekah Mintzer at rmintzer@bloombergindustry.com