I manage a number of small retail outlet stores. At her request, I transferred one of my best sales people to another location. Unfortunately, her experience at the new location has been very distressing for her. This young lady is from India and speaks English with an accent. This was not a problem at the prior store but, for whatever reason, she is experiencing hostility from customers at the new store and this is affecting her commission wages. I am going to offer to transfer her back to the prior store but am concerned about the company’s liability in case she doesn’t want to transfer back and the hostile treatment continues. Can an employer be held liable for the harassment of employees by its customers?


Yes, an employer can be held liable for harassment of employee by customers and community members. The Ninth Circuit United States Court of Appeals held in Galdamez v. Potter that an employer could indeed be held liable under Title VII of the 1964 Civil Rights Act for racial and national origin harassment of an employee by customers and community members if the employer knew or should have known about the harassment, and if the employer failed to take steps reasonably calculated to end and/or deter the harassment.

In Galdamez, the Court found sufficient evidence that a postmaster, who was born in Honduras, endured hostile comments over a three-year period from customers and local residents because of her race, accent, and national origin. Several customers, including the mayor of the community, had expressed displeasure with having a Hispanic postmaster, and had criticized her accented English. The postmaster had also received threats to her life and her safety, including an anonymous letter promising to “get rid of you foreigner,” threats that referenced killing her, and allusions to potential mob violence. The postmaster’s car was even vandalized in the post office parking lot, and other postal service employees expressed their belief that the postmaster’s difficulties stemmed from community prejudice. The postmaster testified that she had informed her superiors at the post office about the harassment she was suffering due to her accent and national origin. However, these same supervisors claimed that they did not know whether they had any specific obligation to look into racial harassment, or to develop special procedures for confronting it, as they did in the context of sexual harassment. As a result, the post office did not conduct an investigation into the allegations of racial harassment made by the postmaster, who eventually sued her employer.

The Court held that once the employer actually knew (or reasonably should have known) that the employee was being harassed, the employer was required to undertake remedial measures reasonably calculated to end the harassment. The Court also stated that the “reasonableness” of the measures would depend upon the employer’s ability to stop the harassment and to deter potential harassers, as well as the promptness of the response.

This case demonstrates that employers must promptly investigate all allegations of discrimination and/or harassment in the workplace, even if the conduct being complained about originated with customers or community members. Employers must also take appropriate remedial measures to end the discrimination and/or harassment once they have reason to believe that one of their employees is being victimized in this manner.
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