Brewers Beware: You May Be Liable for Customer Sexual Harassment

It is not an uncommon occurrence. A customer or patron makes an inappropriate sexual comment to a server or, even worse, engages in some inappropriate touching. Whenever alcohol is involved—as is the case in most brewery-customer interactions—the risks of unfortunate patron conduct increase. While, as the employer, you may feel that such customer conduct may be part of the job and it is up to the employee to handle appropriately, you need to be aware that the failure of an employer to respond or take action could lead to a lawsuit.

When you hear the word “sexual harassment,” I am sure that you instantly envision circumstances where a supervisor—or a co-worker—engages in inappropriate conduct toward a subordinate or another employee. Employers, however, may also be liable for the sexual harassment committed by third-parties, such as customers or patrons. An employer may be liable for the harassing conduct of a third-party if the employer failed to provide a reasonable avenue for complaint or that it knew, or in the exercise of reasonable care should have known, about the harassment yet failed to take appropriate remedial action. Stated more simply, an employer must have a policy or procedure in place to allow employees to complain about customer harassment and, if an employee complains, the employer must take steps to end the harassment.

The failure of an employer to respond to an employee’s complaint of patron or customer harassment could have consequences. For example, in Equal Employment Opportunity Commission v. Costco Wholesale Group, Case No. 14 C 6553 (N.D. Ill.), the retail giant is going to have to defend itself at trial over its actions with respect to allegations of customer/employee harassment. In Costco, the employee—who worked with customers with respect to purchases and returning merchandise—was subject to a year of periodic harassment by a particular customer, including inappropriate comments and touching and videotaping her without permission. While Costco apparently took some steps to end the purported harassment, including banning the customer from all of its stores, the trial court found that there was an issue of fact requiring a trial whether Costco took prompt and appropriate remedial action to end the harassment perpetrated by the store’s customer.

This issue is especially important for small craft breweries in New York. Generally, for an employer to be covered under the New York State Human Rights Law (which is the New York law prohibiting discrimination and harassment in the workplace) it has to have at least four employees. In light of recent legislation, the prohibition against sexual harassment has been extended to all employers, not only companies with four or more employees. Accordingly, a craft brewery with as few as one employee could potentially be liable for sexual harassment committed by customers or patrons.

The takeaway: always provide an avenue of complaint for your employees and, if someone complains or you otherwise become aware of inappropriate customer conduct, take prompt remedial action.

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Christopher Gegwich