Your employee is accused of harassing a customer – now what?

Handling workplace harassment is always complex, but the challenge may intensify when an employee harasses a customer or client.  

Two recent tribunal decisions highlight the consequences for businesses that fail to act. In one case, the Law Society Tribunal in Ontario ruled that a lawyer engaged in professional misconduct by sexually harassing a client through inappropriate messages and unwelcome physical contact.  

In another, the Human Rights Tribunal of Ontario found an employer was vicariously liable after a kickboxing instructor sexually harassed a student, ordering $10,000 in damages.  

Unlike traditional workplace investigations that may involve two employees, cases involving third parties introduce legal grey areas, confidentiality concerns and reputational risks, according to two lawyers speaking with Canadian HR Reporter. 

Investigating a customer complaint of harassment 

The definition of workplace harassment and sexual harassment can differ by jurisdiction, so the obligations aren’t entirely clear when it comes to investigating a complaint by a customer, says Kyle Lambert, a partner at McMillan in Ottawa. 

“For example, in Ontario, workplace sexual harassment refers to engaging in a course of conduct against a worker, so the obligations that arise in respect of workplace harassment or workplace sexual harassment under the OHSA do not apply to the alleged harassment of a third party.” 

But even if there isn’t an immediate obligation to investigate, that doesn’t mean an investigation wouldn't have value to the employer, he says, “if only to better confirm whether or not the conduct amounts to something that's worthy of discipline.” 

While workplace harassment laws often focus on protecting employees, there is an obligation to investigate a complaint from a customer or client, according to Andrew Carricato, associate counsel at Roper Greyell in Vancouver. while any jurisdictional issue comes up at the end of the process. 

“For the employer to do their due diligence and to minimize any liability or risk that could flow from the complaint, that's where that duty to investigate comes from. It would behoove them to do that or risk a cause an action or a complaint under one of several legal issues.” 

Legal considerations for harassment by employees 

An employer may also be vicariously liable for their employee’s conduct if the employer is found to be negligent; for example, if they knew of the employee's bad or questionable behavior and didn't do anything about it, he says. 

Carricato notes that harassment of customers could also trigger human rights claims, civil liability or even criminal consequences. 

"If an employee treats a client or customer differently on any of the protected grounds in the provision of goods, services, facilities or accommodation, in that part of the provincial human rights codes that is customarily available to the public, that may constitute discrimination.” 

There could also be a financial liability, such as costs, legal fees or general damages for a proven or substantiated claim of discrimination, he says, “not to mention the reputational risk to the business." 

On the criminal side, the employer may end up reporting the issue to law enforcement after their own investigation, and regulatory bodies may also become involved, depending on the industry, says Carricato. Professions such as law, healthcare and engineering, for example, have strict codes of conduct that could lead to disciplinary action beyond workplace penalties. 

“Any behaviour may be found to be a breach of those standards and could also trigger the duty to report the impugned behaviour to those professional bodies as well,” he says. 

Confidentiality challenges in investigations 

Adding to the challenges of handling customer or client complaints is confidentiality. A major concern in any harassment investigation, it becomes particularly complex when a third party is involved. 

There’s a notable lack of control when a customer or client is involved, says Lambert. 

"An employer could require its employees — and should require its employees — that are part of an investigation to keep everything confidential. And there wouldn't necessarily be an obligation on the employer to disclose the identity of the complainant to the responding employee or accused employee,” he says. 

“But an employer won’t have control over what a third party does. And employers, while they may try to speak with the third party to understand what happened, they can’t compel a third party to speak with them, and they can’t compel a third party to keep it quiet.” 

Carricato agrees, saying the confidentiality of the complainant is more difficult “because they are not bound or restricted by anything, really, and can speak about it." 

This creates a delicate balance for employers, who must protect employee privacy while also demonstrating that complaints are taken seriously. He emphasizes the importance of managing expectations early. 

"It’s important for investigators to front-load as much as possible this conversation about privacy and confidentiality from the get-go, so that you're managing the expectations from the very first meeting with that individual, so they understand the process,” says Carricato, and that would include the fact that the employer may not be able to share the details of any sort of discipline imposed on the employee if it's found they've breached a law or policy. 

Disciplinary considerations after misconduct 

When an investigation confirms harassment by employees, HR must then determine the appropriate disciplinary action. And the response will depend on factors such as the severity of the conduct, whether it was a first offence, the employee’s length of service and if it’s a unionized workplace, says Carricato. 

"There are lots of factors that could affect the outcome for the person,” he says. 

In extreme cases, harassment of a customer may justify termination for cause, but Lambert notes that this is not automatic. 

"Assuming you find that there is some kind of misconduct, then discipline will range depending on the nature of the misconduct. Where something involves harassment, even if it doesn’t qualify under applicable workplace legislation, the employer might have cause to terminate. It will all depend on whether or not there has been that — per McKinley — irreparable harm done to the employment relationship." 

There’s no black-and-white rule as to whether something like this would amount to cause for termination, he says.  

"That’s the case for harassment between employees in the workplace, and I would say it’s the same with respect to third parties." 

Overall, employers must ensure that their response is consistent with workplace policies, says Carricato. 

"If there’s a policy, and there’s appropriate training and knowledge of that policy, that can hopefully help to mitigate or reduce the likelihood of that kind of behaviour," he says. "It also grounds the basis for a complaint and any disciplinary action that follows." 

Proactive steps to combat harassment of customers 

To prevent incidents of employee harassment against customers, employers should implement clear policies and training programs, say the two lawyers. This not only sets expectations but also protects the organization in case of a legal dispute. 

A policy that governs employees’ conduct can be as simple as saying, “expectations with respect to the prevention of workplace harassment would apply equally to interactions with third parties, even if the procedures are different,” says Lambert.  

“You want people conducting themselves appropriately, especially if it's on behalf of the business or the employer.” 

It’s about making sure that the standards of service that employees are providing are of a certain quality or at a certain level, says Caricatto, and “setting out what's appropriate and what's not appropriate when dealing with clients or customers and members of the public.” 

The training is equally important, so employees know what’s expected of them, says Lambert. 

“If ever there is a dispute over an employee's conduct, then it's always helpful for the employer to make very clear that training is in place, policies are in place, and there are no surprises." 

When challenged, employees may claim it’s the kind of workplace where people speak “off the cuff” and they’re “old school,” he says, so the best defence for the employer is to show that policies and training are in place with clear expectations. 

A signed acknowledgment of training is also advisable, says Carricato. 

"It’s always best practice to have that acknowledgment as an employer, because then you can prove that they did the training… they received it, they understood it," he says. "If those standards are not respected, the stronger the case [the employer has] to say, ‘We did our part, and you knew of it, and you still failed to respect our standards of conduct.’" 

Beyond compliance, these measures can also enhance customer trust and reinforce a company’s commitment to a respectful environment, says Carricato. 

"From a public relations perspective, it can message to the customers and clients that this particular business takes this matter seriously and has a policy and provides training. It goes to show those proactive steps that they’ve taken.”