Speak No Evil: Liability for Hostile Customers



Control Issues

The sun rises in the east, and “the customer’s always right.” But if the customer starts hurling racial slurs, or leering inappropriately at a salesperson, does the cliché still apply? It’s no secret that difficult customers can make life miserable for employees on the front lines, but the fact that an employer may be liable for customer behavior can come as a nasty shock.

It’s all about control. When an employer wields extensive power over a work setting and approves of, or allows, customer harassment to continue, it can assume responsibility. Since courts decide these matters on an ad hoc basis, however, it behooves an employer to gain a case-by-case perspective of what’s at stake.

Can I Speak with a Manager?

A recent holding from a federal court in Puerto Rico stands for the principle that a boss can’t dodge liability through a “see no evil, hear no evil” strategy.  If the employer knows, or should know, harassment has taken place, it can still be on the hook if it doesn’t take action—even if an employee never complains. Accordingly, a call center employee, fired from the company Hewitt, can proceed with a hostile work environment claim based on customer jabs like, “your stupid accent makes me sick,” and much worse.  

A “set of regular offenders” isn’t necessary, which helps establish the harassment prong of her case, since she had a one-time interaction with most callers. The second, more onerous prong is imputing liability onto her former employer.

Hewitt asserts that if a customer made her uncomfortable, she could have simply transferred the call. Yet, she was also instructed to “calm down” hostile callers. Noting the mixed messages, the court found: “it is unclear how instructing an employee to try to calm down a caller uttering insulting language is an appropriate response to protect the employee from that language.” What would have happened if she just hung up?

Firing the Customer

A successful pool salesman in Alabama had hung up multiple times on a particular customer, only to have him call back, making comments like, “tell that black [N-Word] he don’t hang up on me.” After facing racial insults for about five years, the salesman was offered the tempting option to “fire” the customer. The catch was that, if he actually did so, he’d have to come up with $250,000 - $300,000 worth of new business in order to “make budget and be eligible for a bonus.” That’s a tough sell.

Harassment cases are rife with tales of employers who think they’ve performed due diligence by distributing an anti-harassment policy and putting employees on notice regarding their rights. But as the court observed, “a jury could conclude that a harassment policy that comes with a $250,000 price tag is no policy at all.” As a result, the salesman can bring his case to trial.

Where There’s Smoke

In a case recently heard by a federal appeals court, an employee took “firing the customer” a step further by literally burning a man with a cigarette when he followed her out of a store making suggestive comments. But contrast her case—which she lost—with the pool salesman’s, and one learns a lot about the subjective versus objective divide in harassment cases. Despite her having been sexually assaulted in the past, and claiming to have felt unsafe, the employee was never physically threatened, and the court excluded evidence of her past assault. Courts don’t have to explore an employee’s background to determine if conduct is objectively severe.

Calling someone the N-Word, on the other hand, is a different story. “Perhaps no single act,” the court observed, “can more quickly alter the conditions of employment and create an abusive environment.”  The objective standard may have cut against the store employee, but one upshot to using an objective standard is that an employer already knows—or should know—the type of conduct that can give rise to a hostile environment, and has an opportunity to prevent it.

The Right Choice

When it comes to customer harassment, every case is different, and there are many more variables at play than discussed here. But if there’s a gem of advice employers can glean from the preceding examples, it’s that their best bet is to avoid “no-win” scenarios, like the call service employee’s, or the pool salesman’s. If an employee is presented a Hobson’s choice between pleasing a customer and putting up with harassment, or losing a job, they might look to a third option: suing their employer.

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