On August 8, 2025, the U.S. Court of Appeals for the Sixth Circuit ruled an employer is not liable for harassment of an employee by a third party unless the employer intended for the harassment to occur. This stark departure from other federal appeals court decisions, as well as the EEOC’s reading of Title VII, could potentially prompt the development of new standards for harassment claims involving nonemployees. Whether this means employers can safely ignore complaints of customer misconduct, however, is very doubtful.
What happened?
The plaintiff worked as an outside sales representative. In August 2021, she told her supervisor that a customer brought her into his office, locked the door, and asked her a couple times if they could date. The plaintiff told her supervisor that this made her uncomfortable, and the supervisor reassigned the account to an inside sales team. This eliminated any future contact between the plaintiff and the customer.
Later that fall, the employer reduced its workforce, eliminating outside sales representatives whose territories fell below a certain revenue threshold. Because the plaintiff’s territory fell below that threshold, her position was eliminated along with those of 22 other employees.
The plaintiff sued, alleging a hostile work environment based on the customer’s advances and that her employment was terminated in retaliation for her complaint about the customer’s conduct and because of her race. The trial court summarily dismissed all counts. Bivens v. Zep, Inc., 2024 U.S. Dist. LEXIS 214223 (E.D. Mich. Nov. 22, 2024). Regarding her hostile work environment claim, the court applied the standard recommended by the EEOC and followed by most circuits courts, including the Sixth Circuit at the time, ruling the employer was not liable for the customer’s conduct because (1) there was no evidence the employer knew or should have known the harassment would occur and (2) the employer took prompt remedial action.
The plaintiff appealed to the Sixth Circuit.
Sixth Circuit: employers are not liable for nonemployee harassment unless the employer intended for the harassment to occur.
The Sixth Circuit upheld the trial court’s dismissal of the harassment claim, but for a different reason. It explained, “Title VII would appear to impose liability for sexual harassment only when the employer itself intentionally treats a person worse because of sex.” Bivens v. Zep, Inc., No. 24-2109, 2025 U.S. App. LEXIS 20102 (6th Cir. Aug. 8, 2025). Employer liability for the actions of employees is based on agency principles, so the employer is held directly liable for unlawful harassment by a supervisor and “vicariously” liable where it fails to prevent unlawful harassment by non-supervisors. The Sixth Circuit held, however, because “there is no legal mechanism for imputing unlawful intent of a customer to a business he frequents,” an employer cannot be held liable for the actions of a customer with whom it has no agency relationship. Thus, concluded the Sixth Circuit, Title VII “imposes liability for non-employee harassment only where the employer intends for the harassment to occur.” (Emphasis added).
The decision rejects the EEOC’s position on employer liability for harassment by nonemployees and clarifies the EEOC’s interpretation of Title VII is non-binding.
The EEOC has long taken the position that employers are liable for the unlawful harassment of their employees by non-employees if the employer knew or should have known of the conduct and failed to act. Relying on the Supreme Court opinion Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024), which substantially narrowed judicial deference to executive agency interpretations of laws enacted by Congress, the Sixth Circuit explained:
[T]he EEOC's interpretive authority over Title VII has limited reach, with the agency authorized to issue only procedural regulations setting forth the steps for pursuing a claim under Title VII, not substantive ones interpreting the statutory rights of parties. Thus, EEOC interpretive guidelines have no controlling effects on courts.
The Sixth Circuit concluded that its own conclusion rather than the EEOC’s view is the “best” interpretation of Title VII regarding non-employee harassment.
Recommendations
Whether its limitation on liability for nonemployee harassment remains limited to the Sixth Circuit’s jurisdiction or is followed by other courts of appeal or the EEOC remains to be seen. While an employer in the Sixth Circuit may not be liable to employees for unintended harassment by a nonemployee, this case should not encourage employers to ignore employee complaints about a hostile environment caused by customers. At some point forcing an employee to continue working with an abusive customer is likely to be interpreted even under the new Sixth Circuit standard as crossing the line into intentional conduct by the employer. There is no indication, moreover, that the EEOC or state agencies applying state law standards will adopt the Sixth Circuit’s approach. From an employee relations standpoint, it makes sense to view the new decision as a reminder to employers to implement comprehensive harassment and workplace conduct policies, conduct regular training on those policies, establish multiple and safe reporting channels, and foster a culture of respect for all employees.
