In Bivens v. ZEP, Inc., the Sixth Circuit held that an employer is not liable under Title VII of the Civil Rights Act of 1964, as amended (Title VII), for harassment by a customer unless the employer intended the harassment to happen or was substantially certain it would. This holding represents a clear break from the EEOC and most other circuits that use a negligence, “knew or should have known,” standard, which applies to coworker-on-coworker and superior-on-subordinate harassment within the workplace.
The Difference Between Harassment by a Coworker/Superior and a Customer
It is important to note that this holding does not impact co-worker-on-co-worker harassment or supervisor-on-subordinate harassment, as an employer has more disciplinary tools in its arsenal to address such issues within its workplace, such as suspension, demotion, transfer, and termination.
Rather, the Bivens' holdings seem to take into account that employers face a distinct set of challenges when harassment comes from customers rather than coworkers. In the employee-to-employee context, the employer controls the workplace and the actors. It can investigate, discipline, and remove offenders. With customers, however, control is limited as the employer cannot simply terminate a customer, and options often come in the form of warnings, refusing service, banning the individual, calling security or law enforcement, adjusting staffing, or reassigning the employee, all while protecting the employee from retaliation and preserving lawful business relationships.
The Bivens' court took on the issue of whether there is a different standard for employers to act in response to third-party harassment v. internal harassment, and decided that, indeed, there is.
Background
Bivens, a female Detroit‑area sales representative, reported to her supervisor that a customer's manager had locked her inside a room and asked her out. In response to her complaint, her supervisor reassigned the account. Weeks later, the company eliminated Bivens' position in a reduction in force, and Bivens sued for hostile environment based on the customer's conduct and retaliation. The district court granted summary judgment for the employer, and the Sixth Circuit affirmed.
What the Sixth Circuit held
The Sixth Circuit made a number of notable holdings. First, the court determined that because a customer is not the employer's “agent,” there is no vicarious or negligence-based liability for customer harassment. In doing so, the court rejected the EEOC's regulation that imposes liability when an employer knows or should know about a non-employee's harassment and fails to act. Instead, Title VII liability in this setting requires direct employer intent; the employer must have desired the harassment or been substantially certain it would result from its own actions.
The Sixth Circuit also expressly declined to follow the EEOC's view and noted that at least the First, Second, Eighth, Ninth, Tenth, and Eleventh Circuits apply some version of a negligence standard for customer harassment. The Seventh Circuit's cases are mixed.
The court also tacked the holding onto Bivens' state law harassment claims, brought under Michigan's Elliot-Larsen Civil Rights Act, finding that they “rise and fall together”. The other states within the Sixth Circuit follow the same precedent, so the Bivens' holding will apply to state claims as well.
The court also sided with the employer on Bivens' retaliation claims based on a lack of proof, given that the person responsible for deciding to terminate Bivens had no prior knowledge of the complaint.
Why does this matter for employers in Kentucky, Michigan, Ohio, and Tennessee?
The holding requires employees to pass a much higher bar in order to trigger protection under federal and state harassment laws for customer harassment. In some respects, the holding does make sense as the employer usually has little it can do to combat customer conduct given it has no disciplinary tools, such as write-up, suspension, or termination. Further, customers are the bread and butter of most businesses, and ensuring smooth sailing in such interactions is paramount to keeping those business relationships and the business afloat. The Sixth Circuit's decision appears to recognize the conundrum employers face and take into account how little control they have regarding customer behavior.
Bivens should not be interpreted as a green light for employers to ignore employee complaints about harassment. Even within the Sixth Circuit, treating customer complaints like coworker complaints is still the safest play. Treat customer misconduct as you would internal misconduct.
How this differs from other jurisdictions
Employers with multi-jurisdiction operations must continue to meet the highest applicable standard, which is the negligence standard discussed above for most. Specifically, the 1st, 2d, 8th, 9th, 10th, and 11th Circuits generally apply a negligence standard for customer harassment (liability if the employer knew/should have known and failed to act). The Sixth Circuit now requires intent for federal Title VII claims involving non-employees.
Practical next steps for businesses (inside and outside the Sixth Circuit)
- Keep and enforce a “No Customer Harassment” rule. Spell out that customer, vendor, and contractor misconduct is prohibited and will result in account reassignment, removal from premises, or contract termination. Train managers to act on this fast. The Sixth Circuit viewed the employer's decision to reassign Bivens' favorably.
- Build it into contracts. Add Code of Conduct and removal clauses to customer and vendor agreements so you can bar offending individuals and exit relationships that refuse to curb misconduct.
- Give employees “stop‑work authority.” Allow employees to end a sales call/service call if harassed, with no penalty for stepping away, and require immediate reporting.
- Centralize intake and tracking. Use a single system to log third-party misconduct, responses, and outcomes. This is essential in negligence jurisdictions, and valuable evidence is still everywhere.
- Train with scenarios. Not only train supervisors on this issue, but rather than a one-dimensional PowerPoint, use real-world role‑plays based on your specific industry, e.g., hotel, healthcare, retail, field sales, so supervisors know exactly how to intervene and what documentation to create.
- Audit reduction in force (RIF) decisions. If harassment complaints and RIFs are in the same timeframe, wall off decision‑makers from complaint information where possible, and document the RIF criteria and data. The employer in Bivens won on retaliation because the decision‑maker had no knowledge of the complaint.
Key Takeaways
- The holding is significant for all customer-facing businesses operating in Kentucky, Michigan, Ohio, and Tennessee (the states within the Sixth Circuit). However, employers cannot treat this decision like a free pass to ignore employee complaints about customers because there is still a bar, and because other states outside the Sixth Circuit's footprint still follow the negligence approach.
- Within the Sixth Circuit, federal customer‑harassment claims now require proof that the employer intended the harassment or was substantially sure it would occur, not mere negligence. This is a circuit split and a direct contrast to the EEOC's regulation. This means that we can expect to see petitions for rehearing en banc or for Supreme Court certiorari.
- Multi-state employers should continue to follow negligence-based best practices because many jurisdictions still impose them.
- The Sixth Circuit's directive is narrow. Intent governs federal liability for customer harassment in its four states. An employer's obligation to keep people safe and to manage risk across jurisdictions has not changed. When faced with any third-party harassment of an employee, employers must act as they would in any other harassment.
- The legal duty remains to take prompt, effective action once on notice, but what constitutes “effective” reasonably reflects the tools available in a public-facing setting and the employer's legitimate operational limits. The balance is delicate as over-correcting can harm revenue or escalate conflict, and under-correcting risks legal liability, safety issues, and morale damage.
- Practical compliance means clear reporting channels, manager training on de-escalation and documentation, posted customer conduct rules, a playbook for repeat offenders (trespass), and careful use of reassignment that does not penalize the complainant. In short, the law expects real, good-faith responses to third-party misconduct, a high hurdle, not a trip wire, designed for the employer's actual control.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
