A Publication of WTVP

In the past, the extent of employers’ liability for the actions of others mostly was limited to the actions of its employees. Control over the employees was the major legal basis for employer’s liability—often referred to as “respondeat superior.” No more, says the Seventh Circuit. As a far reaching development in employment law, the Seventh Circuit recently ruled in Dunn v. Washington that prohibitions against a hostile work environment extend to an employer’s obligation to remedy harassment by employees, vendors, independent contractors, and even customers. In other words, employers have a federal statutory obligation, under the Civil Rights Act of 1964, to ensure a harassment-free workplace without regard to the identity of the person engaged in the harassment.

In Dunn, the plaintiff was a hospital nurse who complained of sexual harassment created by the head of the hospital’s obstetric and emergency services. The physician wasn’t an employee of the hospital, but the physician had special hospital privileges, and his relationship to the defendant hospital is best described as that of an independent contractor. In addition to the plaintiff, many nurses also complained of similar treatment. Although the hospital enticed the nurses to give statements with promises that what they said would remain confidential, not long thereafter, the doctor in question had copies. He proceeded to attempt to coerce the women who’d spoken against him into recanting their stories. He even went so far as to push the plaintiff against a cabinet, pinning her against it, and tapping her on her cheek with a closed fist.

As inexcusable and appalling as the manner of the physician’s harassment of the plaintiff, it wasn’t the basis for the hospital’s vicarious liability. This was irrelevant in the court’s eyes. Rather, it was the hospital’s inaction, upon notice of the physician’s harassment, which gave rise to its vicarious liability. In this case, the hospital administration investigated the plaintiff’s allegations, going so far as to take statements from other female nurses. Despite that obvious warning, the hospital administration did nothing to stop the physician.

Under traditional employee/employer vicarious liability rules of law, an employer couldn’t be liable for the actions of those not under its control. Control traditionally has been one of the elements of proving an employer/employee relationship. This distinction, under the court’s analysis, is irrelevant for a sexual harassment analysis under Title VII. Under Title VII, an employer’s liability is “direct” and not solely “derivative” from the acts of its employees. For this reason, the “ability to ‘control’ the (misbehaving) actor plays no role.”

What’s crucial and determinative is that the employer, upon receiving notice of the misbehaving actor’s conduct, invoke and reasonably utilize the certain mechanisms available to it to end the offensive conduct. The court also stated: “Employees are not puppets on strings; employers have an arsenal of incentives and sanctions (including discharge) that can be applied to affect conduct. It is the use of (or failure to use) these options that makes an employer responsible—and in this respect independent contractors are no different from employees.”

This decision reinforces the fact that employers must be prepared to hold not just employees to appropriate standards of behavior, but also contractors, visitors, and others brought into the workplace. Employer anti-discrimination policies should make clear that discrimination and harassment won’t be tolerated by employees—or independent contractors—and that employees should be encouraged to report any suspected unlawful discrimination.

This decision also makes clear that employers must respond promptly and appropriately when employees make a claim of harassment. In any such event, it isn’t a defense in the Seventh Circuit for the employer to claim that because it had no authority to control the conduct of its invitee, its employees had no recourse when subjected to the invitee’s harassment.

Employers also should be prepared to act—or use the available “arsenal of incentives and sanctions”—when faced with allegations of unlawful harassment against contractors. The Dunn case serves as a reminder for all employers to remain proactive in eliminating harassment, regardless of the source. IBI