In Hewitt v. BS Transportation of Illinois, Civ. No. 18-712 (E.D. Pa. Jan. 11, 2019), a district court addressed an unsettled issue in the Third Circuit: The extent to which an employer may be held liable for a hostile work environment created by a non-employee. The district court held that an employer could be held liable for its failure to investigate and remediate its employee's complaint. In so holding, it imposed a standard similar to that which exists under New Jersey law.

Facts of 'Hewitt'

Plaintiff, Carl Hewitt, worked as a freight driver for Defendant BS Transportation. His job responsibilities included loading oil at Sunoco's refinery on a weekly basis. Hewitt alleged that, over the course of a two-and-a-half-year period, defendant Sunoco's employee, Anthony Perillo, subjected him to sexual advances “at least once or twice a week.” On one occasion, Perillo grabbed Hewitt “by the buttocks with one hand,” shoved him into his trailer's freight car with the other and “leaned” into him, asking, “Do you like that?”

Hewitt alleged that Perillo's supervisor Mark Frederick was aware of Perillo's sexual harassment. He further claimed that, on at least one occasion, he had reported the harassment and the assault to Sunoco. On Aug. 10, 2016, BS Transportation's owner, Bruce Schunke, informed Hewitt that he had spoken to Frederick and would “handle the matter.” However, both Schunke and Frederick failed to investigate Hewitt's complaints, and Perillo remained a Sunoco employee. Perillo subsequently resumed his sexual harassment of Hewitt and, after learning that the latter had lodged a complaint, “threatened to bring his gun into the blend plant and kill everyone there.”

In September 2016, Hewitt informed BS Transportation's owner, Schunke, that Perillo “had resumed 'making inappropriate sexual comments and gestures,'” but Schunke failed to inform Sunoco of Hewitt's complaints. Hewitt alleged that he had been subject to a hostile work environment and retaliation in violation of Title VII of the Civil Rights Act of 1964 as well as Pennsylvania state law.

Court's Analysis

As noted by the court, in asserting a claim against BS Transportation, Hewitt sought “to hold an employer liable for the harassment of its employee by a nonemployee.” The court noted that the Third Circuit had not addressed this question but that, in the case of Johnson-Harris v. AmQuip Cranes Rental, No. 14-767, 2015 WL 4113542, 2015 U.S. Dist. LEXIS 88736 (E.D. Pa. July 8, 2015), another district court in the Third Circuit and “other circuit courts” had imposed such liability. Although the court did not specifically state to which other “circuit opinions” it was referring, the court in Johnson-Harris cited to Pryor v. United Air Lines, 791 F.3d 488 (4th Cir. 2015); Crist v. Focus Homes, 122 F.3d 1107 (8th Cir. 1997); Galdamez v. Potter, 415 F.3d 1015 (9th Cir. 2005); and Turnbull v. Topeka State Hosp., 255 F.3d 1238 (10th Cir. 2001).

In determining that Hewitt could maintain such a claim, the court provided a fairly terse analysis. In its two paragraphs on this topic, the court noted that, although he had informed “Schunke, a management-level employee” of BS Transportation of the harassment, and the latter had “assured Plaintiff that he would take care of it” and requested that Hewitt not say anything further, Schunke failed to do so. The court noted further that Schunke had not notified Sunoco of Hewitt's September 2016 “complaints of continued harassment.” The court concluded that, “at this stage in the litigation, plaintiff's allegations that Schunke failed to investigate his complaints of sexual harassment by Perillo or notify Sunoco of his continued complaints [we]re sufficient to withstand a motion to dismiss.”

Standard Under New Jersey Law

Almost 23 years earlier, the New Jersey Appellate Division in Woods-Pirozzi v. Nabisco Foods, 290 N.J. Super. 252 (App. Div. 1996), used a very similar analytical framework to find that an employer may be liable for sexual harassment committed by its independents contractors. Like the court in Hewitt, the Woods-Pirozzi court held that an employer could be held liable for its negligence in failing to address harassment by a third party.

In Woods-Pirozzi, the plaintiff was a head nurse/medical supervisor employed by Nabisco at its Fair Lawn, New Jersey, facility. During her employment, she was subjected to multiple incidents of sexually charged comments by Dr. Ferraro, who provided medical services for employees at the Fair Lawn facility. Dr. Ferraro was not an employee of Nabisco but rather was an independent contractor. For a period of one year, the plaintiff made several complaints of discrimination and harassment against Dr. Ferraro to her supervisors as well as to Nabisco's EEO coordinator. The company neither investigated Ms. Pirozzi's complaints nor took any remedial measures to ensure that the harassment ended. In fact, the plaintiff claimed that when she informed the employee relations manager of Dr. Ferraro's comment that she was having a sexual affair with Nabisco's orthopedic consultant, the manager just laughed and asked Ms. Pirozzi if she was having such an affair. No action was taken by the company.

Ultimately, Dr. Ferraro's contract was terminated, in part because of a sexually harassing comment Dr. Ferraro made in a meeting with the employee relations manager and his boss, the personnel panager. However, Ms. Pirozzi was dissatisfied with Nabisco's actions and filed a Charge of Discrimination with the New Jersey Division on Civil Rights (NJDCR) as well as the Equal Employment Opportunity Commission (EEOC).  Eventually, Ms. Pirozzi left Nabisco, claiming that she had been constructively discharged

Although the trial court granted Nabisco summary judgment, the Appellate Division reversed.  In so doing, the court adopted the standard in 29 C.F.R. §1604.11(e), which sets forth when an employer may be responsible for the acts of non-employees. Specifically, this provision states that, where a non-employee sexually harasses its employees, an employer may be responsible where the employer, or its agents or supervisory employees, knows or should have known of the conduct and fails to take immediate and appropriate corrective action. The court in Woods-Pirozzi found that a rational juror could conclude that Nabisco was negligent when it took no action in response to the plaintiff's complaints about Dr. Ferraro. Specifically, the court noted that “[w]hile Nabisco did eventually fire Dr. Ferraro, it took no action in response to several incidents… .” The court also found that, although Nabisco did conduct an investigation into Dr. Ferraro's sexually harassing comment during the subject meeting, it took Nabisco three months after the meeting to terminate him, which was a “long time for Pirozzi to continue to work with him after everything he has said.”

Implications of 'Hewitt' and 'Woods-Pirozzi'

The lesson employers can learn from these cases is that they should promptly investigate all employee complaints that allege discrimination or harassment, even when they involve non-employees. In addition, they should inform the latter's employers of any such complaints.

However, investigating and remediating such complaints are potentially more difficult. First, a non-employee such as the individual in Hewitt is typically not required to cooperate with such an investigation. Moreover, an employer does not have the power to discipline or terminate a non-employee. One possibility employers may want to consider is to address this issue in their contracts, either with customers, as in the case of Hewitt, or independent contractors, as in the case of Woods-Pirozzi.

From a practitioner's standpoint, Hewitt and Woods-Pirozzi impose a negligence theory of liability. Accordingly, a practitioner who seeks to hold an employer liable for the harassment of its employee by a nonemployee should describe in what respect the employer failed to take appropriate measures and set forth the precise manner in which the employer deviated from its duty to exercise due care.

Heidi Weintraub is a partner with Javerbaum Wurgaft Hicks Kahn Wikstrom & Sinins in Mount Laurel. She is a civil trial lawyer who specializes in employment law and professional malpractice. Andrew Moskowitz is of counsel in the firm's Springfield office. He focuses his employment law practice on disability, discrimination, harassment and whistleblower claims.