Staffing Companies Should Be Wary of Sexual Harassment Claims

In the first week of August 2017, the Seventh Circuit Court of Appeals issued a proverbial warning to staffing companies concerning sexual harassment in the workplace. A panel of three judges determined that a lower court had erred in finding for the employer in a Title VII sexual harassment case. In Nischan v. Stratoshpere Quality, LLC, decided in the United States District Court for the Northern District of Illinois, the plaintiff-employee alleged she was sexually harassed by an employee of the defendant-employer’s client, to whom she had been assigned to work. The appellate court held that the defendant-employer could not be strictly liable under either Title VII or the Illinois Human Right Act for the conduct of its client’s employee. However, the Court also ruled that the defendant-employer could still be liable for harassment committed by its client if it was aware of the client’s harassment and was negligent in remedying the harassment.

In Nischan, the employee did not formally complain about the client’s harassment until after she had been removed from the job site. However, she did allege that the sexual harassment occurred in the presence of two of the defendant-employer’s supervisors, who subsequently did nothing to remedy the situation. In addition, the defendant-employer’s company handbook required supervisors to report any harassment when they became aware of it. Ultimately, these facts could demonstrate that the defendant-employer knew about the harassment and failed to prevent or remedy the situation, such that the employer could be liable.

To reiterate the important takeaway, if an employer is aware of harassment of its employees by a client and is negligent in remedying the harassment, the employer may be found liable in a Title VII sexual harassment case. In sum, employers must keep a watchful eye for harassment in their own workplace but also be mindful if the employer notices harassment of its employees at a client’s workplace – and should take steps to prevent those issues. The attorneys at Rock Fusco & Connelly, LLC, can assist your business in staying in compliance and avoiding issues of liability, whether they be direct or indirect.

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