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When Independent Contractors Harass, Are You Liable?

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in Case In Point

Don’t you have enough to worry about with employees sexually harassing each other? But wait. There’s more. As a new ruling shows, employers can also be held liable for the behavior of third-party independent contractors in the workplace—even though they are NOT employees. Now, do we need an extra set of eyes and ears? Yes, indeedy it seems we do!

Case in Point: Hospital employee Odalys Rosa Santos claimed she was harassed by two doctors who were working as independent contractors at the hospital. Santos alleged that an orthopedic surgeon often proposition her for sex and would spank her in passing. The other physician, an anesthesiologist, allegedly made offensive sexual remarks to Santos on a number of occasions and touched her inappropriately.

Santos complained about the contractors’ behavior to the hospital's personnel director. Soon after, Santos alleged that high-ranking hospital workers stopped talking to her after she made the complaints. In addition, the hospital changed her work schedule, refused to allow her lunch breaks and assigned her duties outside of her job description. Santos eventually resigned.

She sued both doctors and the hospital, asserting hostile work environment, sexual harassment and retaliation under Title VII. The hospital argued that it could not be held liable for the alleged harassment because the doctors were independent contractors, not employees.

While a lower court dismissed the claims, an appeals court sided with Santos and sent the case to trial. The court said an employer “may indeed be liable for a non-employee's acts of harassment under Title VII if it knows or should have known of the conduct and fails to take immediate and appropriate action.” (Santos v. Puerto Rico Children's Hosp., D.P.R., 9/28/12)

The hospital also could not avoid liability based on the Faragher/Ellerth doctrine by arguing Santos failed to use the hospital's complaint procedure. The court ruled the defense applies only to harassment committed by an employee's supervisor and does not extend to that by a third party, even if the harasser has a certain amount of control over the employee's work.

Even if, as the employer claimed, Santos verbal complaint was not in accordance with the hospital's written procedure for reporting harassment, it was enough to establish the hospital's knowledge of the situation. The court warned, “It is not true that an employee only acts reasonably if the employee follows the employer's formal procedure, and ... the employer is entitled to ignore any notice of harassment that is outside of the procedure.”

3 Lessons Learned … Without Going to Court

1. Keep your eyes open. Keep a vigilant watch of who is working on your premises, including nonemployees. Make sure they get a copy of your organization’s harassment, discrimination and retaliation policies before stepping foot into your workplace. Consider sending the policy out along with the signed contract. These are the “house rules” and now everybody needs to know about them, including independent contractors.

2. Keep your ears open. “Notice” is “notice,” even if it wasn’t correctly reported up through the designated channels. Once an employer is on notice, it must take immediate action to stop the misconduct. It’s not a legal defense to claim the employee didn’t tell you the “right way.”

3. Keep your wallet open. If you don’t follow numbers 1 & 2 above, be ready to pass out the cash, even over contractors.

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