A recent decision by the Missouri Court of Appeals reiterated the circumstances under which an employer may be held liable for sexual harassment. In Delise Diaz v. AutoZoners, LLC, et al., the plaintiff filed suit under the Missouri Human Rights Act (“MHRA”) against her employer alleging, in part, that sexually harassing conduct engaged in by two customers of the AutoZone store where Diaz worked created a hostile work environment. A jury found in favor of Diaz on her hostile work environment claim, and the employer appealed.woman pushing man away in work setting

On appeal, the Missouri appellate court noted that there are two different legal theories under which an employer may be held liable when an employee is subjected to sexual harassment in the workplace: (1) vicarious liability when the harasser is a supervisor of the plaintiff, or (2) direct liability premised on negligence when the harasser is a third party (e.g., co-employee, customer, etc.) if the employer knew or should have known of the harassment and failed to remedy it. An employer knew or should have known of sexual harassment if information about the harassment came to the attention of someone who either (a) has under the terms of his employment, or (b) is reasonably believed to have, a duty to pass on the information to someone within the company who has the power to do something about it.

In Diaz, the court found there was sufficient evidence to support a finding that Diaz timely informed her employer of the harassing conduct as it occurred. Diaz reported harassment to a fellow commercial sales manager soon after the conduct began, and she thereafter continued to report every incident of unwanted physical contact. Notably, the employer’s regional human resources manager at the time of the conduct testified that employees were told that they could report harassment to “anyone in management,” which included “commercial sales managers.” This was important to the Missouri appellate court, which stated that if the employer has structured its organization such that a given individual has the authority to accept notice of a harassment problem, then notice to that individual is sufficient to hold the employer liable. Diaz also reported the harassment to the store manager immediately following the first inappropriate physical touching, and following each event thereafter.

In its decision, the court emphasized that the sales manager did nothing to help prevent the unwanted harassment, and in fact there is evidence that he sometimes encouraged it. In addition, the store manager did not report anything to human resources for approximately three months after he learned of the sexual harassment. Even then, the store manager only told human resources that some customers had made “rude” comments. Furthermore, after Diaz took it upon herself to contact human resources, it took multiple contacts, and months, before an investigation was initiated. From these facts, the Missouri Court of Appeals found that the jury reasonably could have concluded that the employer did not take proper remedial action. 20.

In finding the employer liable for sexual harassment, the court noted that where the claim alleges a discriminatory hostile work environment caused by a third party, an employer’s liability is not based on an application of respondeat superior. Rather, liability is imposed when the employer knew or should have known of the harassment and failed to take prompt remedial action reasonably calculated to end the harassment. In other words, liability is imposed where the employer has violated its own, independent duty under the MHRA to maintain a work environment free from discrimination based upon any of its employees’ protected classifications.

A complete copy of the opinion can be found here.