HR Management & Compliance

Sexual Harassment By Customers: A 4-Point Plan To Protect Your Organization And Your Employees


Has an employee ever complained about offensive conduct by a salesperson, customer or vendor? If that behavior veers toward sexual harassment, you may have to step in and stop it. But how you handle the situation may make the difference between resolving the problem, losing a good customer, or worse-being sued.

Employee Assaults Customer

A recent case involved Kelbi Folkerson, a mime hired by the hotel-casino Circus Circus in Las Vegas to entertain its guests. Her job was to stroll through the casino complex, acting like a life-sized children’s windup toy. Folkerson had complained several times to management that because she proved so convincing, some customers tried to touch her while she performed to see if she was “real.”

In response, Circus Circus provided Folkerson with a sign that said “Stop. Don’t Touch” to wear on her back. A male employee was also assigned to accompany her when she performed to protect her. He also asked other employees who worked nearby to remind people not to touch her.

These precautions failed to prevent one customer from trying to embrace Folkerson. When the customer put his hand on her shoulder, she punched him in the face. After watching a videotape of the incident, the hotel’s entertainment director decided she had overreacted, and fired her.

Mime Says Employer Responsible

Folkerson claimed she hit the customer to protest sexual harassment on the job and Circus Circus fired her in retaliation for her “protest.” She relied on the federal anti-discrimination laws that make it unlawful to terminate an employee for complaining about or opposing an illegal employment practice, such as sexual harassment.

But the federal Ninth Circuit Court of Appeal, which covers California, rejected Folkerson’s case. The court noted that you can be liable for the harassment of your employees by outsiders if you don’t take steps to stop it. However, in this case there was no evidence that Circus Circus approved or condoned the conduct. Plus it had made reasonable efforts to ensure the employee’s safety.

4-Point Action Plan

Although Circus Circus did enough to protect its employee, not every situation is so cut-and-dried. And when the harasser is someone from outside your company, things can get awkward.

Even though you have an obligation to protect your employees from sexual harassment, you also don’t want to alienate customers. Here are specific ways to maintain that delicate balance:

  1. Act immediately on complaints. When Folkerson complained, Circus Circus immediately took action to stop people from touching her. Had it ignored the problem, Folkerson’s case would have been much stronger.
  2. Train employees. Get to the bottom of the problem by finding out as many details as possible. Then look for professional, diplomatic ways employees can respond to the offensive behavior-ideally without hurting the business relationship. But there may be times when you do have to sacrifice that relationship-or face a harassment lawsuit.
  3. Exercise control if possible. Short of eliminating Folkerson’s job, Circus Circus could not completely prevent its customers from being offensive. And you probably can’t always stop your customers, particularly members of the public, from crossing the line, either. But you do have options if an employee is being harassed by an important customer. For example, you could distribute a brief policy statement to new customers or vendors outlining the ethical practices you expect to govern your relationship, including a statement specifically prohibiting sexual, racial or other harassment.
  4. Use caution if you decide to complain to a customer’s employer. This can be another risky area if you’re not careful. In one case, a manager filed a defamation lawsuit after a sexual harassment complaint from another company damaged his career. His case was thrown out because the complaining company had thoroughly documented and verified all the problems that had occurred. (See CEA March 1994.)

One approach is to write a letter (reviewed by your lawyer first) to a high-ranking company official explaining the facts that you verified in your investigation. Putting your complaint in writing gives you concrete proof of exactly what you said if it is ever challenged.

Caution Your Own Employees

Note that California has a special law holding you liable for sexual harassment of your customers when there is a “business, service, or professional relationship” between the victim and your employee or company. (See CEA November 1994.) So it’s just as important to be sensitive to inappropriate behavior coming from within your organization as it is to protect your employees from outsiders.


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