The U.S. Court of Appeals for the Seventh Circuit confirmed recently that an employer can be liable under Title VII of the Civil Rights Act of 1964 (Title VII) for the harassment of an employee committed by a third party non-employee, even in a case where the employer had no direct knowledge of the harassment, if it should have known and failed to act.

In overturning a federal trial court, the Seventh Circuit ruled in Nischan v. Stratosphere Quality, LLC, No. 16-3464 (7th Cir. August 2, 2017), that the evidence supported the plaintiff’s argument that her employer was on constructive notice of relentless harassment by a client’s employee because a company supervisor witnessed the harassment and failed to report it, even though company policy required it.

Accordingly, the appeals court sent the claim back to the trial court to determine if the employer was negligent in discovering or remedying the harassment committed by the client’s employee, i.e., knew or should have known of the harassing conduct but failed to act.

The Seventh Circuit’s ruling serves as a reminder that an employer can be liable under Title VII even when the unlawful conduct is committed by a non-employee and even when the employer has no direct knowledge of the conduct, if it can be shown that the employer was put on constructive notice.

A copy of the Seventh Circuit’s opinion in Nischan is available here.

Members of the Center for Workplace Compliance (CWC) can read more here.