Most employers understand their obligation to address harassment by supervisors and coworkers. Fewer appreciate the risk posed by people who do not work for the organization at all, including customers, vendors, contractors, patients, clients, and members of the public.

Claims involving third-party harassment are receiving increased attention, particularly as federal courts continue to grapple with when employers should be liable for misconduct committed by non-employees. California employers should proceed carefully. Federal uncertainty does not reduce risk under California law.

Under California’s Fair Employment and Housing Act (FEHA), employers may be liable for harassment by non-employees if the employer, or its agents or supervisors, knew or should have known of the conduct and failed to take immediate and appropriate corrective action.

The alleged harasser’s employment status is often less important than the employer’s response.

What is Third-Party Harassment?

Third-party harassment occurs when someone outside the employer’s workforce engages in unlawful conduct directed at an employee. Common examples include:

• Customers making sexual comments to employees
• Vendors engaging in racist or discriminatory behavior
• Patients harassing healthcare workers
• Clients making repeated inappropriate advances
• Contractors targeting employees based on protected characteristics

In these situations, employers may argue they lacked direct control over the individual, but that argument has limits.

California law does not require employers to control every third party. However, it does require reasonable action when problems arise.

The Employer’s Response Often Determines Risk

Courts evaluating harassment claims frequently examine what the employer did after learning of the conduct.

Questions may include:

• Was the complaint taken seriously?
• Was there a prompt investigation?
• Were steps taken to stop or reduce exposure to the behavior?
• Was the employee protected from continued mistreatment?
• Did managers minimize concerns because the individual was an important customer, client, or business partner?

Employers rarely face criticism for investigating complaints. Risk grows when concerns are ignored, delayed, or treated informally.

Although Control is Limited, Responsibility is Not.

Third-party harassment presents practical challenges. Employers cannot terminate customers, discipline members of the public, or always remove difficult clients or patients. That fact does not eliminate responsibility, though.

Reasonable corrective action may include:

• Reassigning work or limiting contact
• Issuing warnings to vendors or customers
• Changing reporting structures or schedules
• Ending business relationships where appropriate
• Documenting complaints and responses
• Training managers to identify and escalate concerns

The appropriate response depends on the circumstances. Doing nothing is often the greater risk.

Frontline Leaders Remain a Common Failure Point

Employees do not always report concerns to HR. Complaints often begin with supervisors, leads, or managers perceived as having authority.

When those concerns are dismissed, minimized, or never escalated, employers lose valuable opportunities to intervene before a workplace issue becomes a legal claim.

Training leaders to recognize potential harassment complaints and respond appropriately remains one of the most effective prevention tools available.

The Bottom Line

Workplaces increasingly involve interactions with non-employees: vendors, staffing agencies, customers, contractors, patients, and the public. As those interactions expand, so does an employer’s potential exposure.

For California employers, the better question is often not whether a legal duty exists in a particular situation. Instead, it is whether the organization responded as a reasonable employer would under the circumstances.

At Shaw Law Group, we help employers investigate complaints, train leaders, and respond to workplace issues before they become litigation. We Solve Workplace Problems.®