Employer Liable for Harassment of Employee by an Employee of a Distributor

You may have read this title and thought this blog article was some ill-timed April Fool’s joke. Well, you would be wrong.

In yet another blow to American businesses, the 4th Circuit Court of Appeals ruled that a defendant-tile-manufacturing company could be liable to one of its employees for alleged sexual harassment of that employee by the employee of a third-party distributor. In essence, the takeaway for business owners here is that you are responsible for another business’ employee’s conduct if that person harasses your employee. We can all wax nostalgic for the days when employers were only liable for sexual harassment committed by their OWN employees!

The Case

In Freeman v. Dal-Tile, Corp., the plaintiff, a black woman, worked as a customer service representative for Dal-Tile Corp’s defendant-employer. Through her position as a customer service representative, the plaintiff came into regular contact with Timothy Koester, a sales representative for (and employee of) one of Dal-Tile’s distributors.

During their encounters, Koester allegedly showed Freeman pictures of naked women on his cellphone and used racial and sexual epithets, including referring to black women as “black b*****s” and using the “n” word.

Freeman repeatedly discussed Koester’s conduct with her supervisor, who also witnessed some of the offensive incidents. The supervisor expressed disapproval of Koester’s actions but failed to take any concrete steps to address them.

After three years of enduring Koester’s behavior, Freeman complained to Dal-Tile’s HR department. In response, Dal-Tile initially banned Koester from its facility. But later, Koester was allowed to return with the condition that he must not communicate with Freeman and coordinate his on-site meetings through Freeman’s supervisor.

After taking a two-month medical leave of absence for anxiety and depression, Freeman resigned from Dal-Tile. Freeman later filed suit in U.S. District Court for the Eastern District of North Carolina, alleging, in part, that Dal-Tile violated Title VII of the Civil Rights Act of 1964 by tolerating a racially and sexually hostile work environment created by Koester’s actions.

Please get in touch with The Jacobs Law, LLC if your business needs assistance in defending claims such as this one.