Employer Liability for Non-Employee Discrimination

IntroductionDespite the fact that Title VII of the Civil Rights Act of 1964 expressly forbids only employers (and, by extension, employees) from discriminating against employees,1 courts have long interpreted the statute as also prohibit ing employers from allowing third parties to discriminate against employees.2 Employers who fail to adequately protect their employees from nonemployee discrimination face serious repercussions. For example, a Kansas City-area jury recently awarded over $2.5 million to an AutoZone cashier, who claimed the auto parts retailer failed to take action after customers inappropriately touched her, asked her about her "cup size," and made sexual advances toward her on multiple occasions.3 Likewise, retail supermarket chain Fred Meyer paid out nearly half a million dollars to settle a group of female employees' claims that a customer "continually made lewd comments to [them], in addition to grabbing [them], cornering them, touching their breasts, and pulling one employee onto his lap."4 Non-employee discrimination is not limited to incidents of harassment. For instance, Michigan-based Hurley Medical Center recently paid almost $200,000 to three black nurses who were prohibited from caring for a white baby after the baby's father showed a hospital supervisor his swastika tattoo and insisted that no black nurses treat his child.5Employer liability for non-employee discrimination dates back at least four decades.6 Yet despite its persistence, this form of discrimination has received little attention from courts,7 the Equal Employment Opportunity Commission ("EEOC"),8 and legal scholars.9 This dearth of attention is not necessarily surprising, given the tendency in the law to treat discrimination by non-employees and discrimination by employees as one and the same. Indeed, courts have long assumed-without much analysis-that employers should be equally liable for discrimination that comes from employees and non-employees.10 Consequently, there has been little incentive to explore how these forms of discrimination differ and whether such differences call for different treatment under the law.11This Article seeks to shed much-needed light on non-employee discrimination. I argue that discrimination by non-employees differs from discrimination committed by employees in ways that matter for employer-liability purposes. The most glaring difference is that employers typically cannot exercise the same level of control over non-employees as they do over their own employees when it comes to employment discrimination.12 Employers have a variety of tools at their disposal to prevent, detect, and address employee-on-employee discrimination. Indeed, many employers provide annual antidiscrimination training to employees, establish strict handbook policies and workplace rules against discrimination, and implement mandatory discrimination-reporting requirements. They also have the power to punish employees who violate such policies, whether through formal warnings, suspensions, demotions, or termination. By contrast, employers generally have much less control over non-employees' behavior toward employees.13 Aside from posting a code of conduct, which third parties may or may not read,14 and perhaps banning flagrant offenders from their premises, employers have comparatively few options for effectively combatting discrimination by non-employees. The fact that it is often harder to control non-employees' behavior should not absolve employers from liability for non-employee discrimination-but it should factor into the analysis. To this end, I propose replacing the extant framework, which fails to recognize any difference between employee and non-employee discrimination, with a new approach that ties an employer's liability to its actual or constructive knowledge of and response to non-employee discrimination. Under this two-pronged approach, an employer's liability would depend on (1) whether it knew or should have reasonably known about the non-employee discrimination and (2) whether it acted reasonably in response to the discrimination. …