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California employers can face significant legal liability when their employees are harassed by clients, customers, vendors, or other non-employees. In the transportation industry, where employees are routinely working at locations controlled by third parties, the risk is higher than employers realize.
Most employers know they’re legally obligated to protect employees from harassment by coworkers and supervisors. But far fewer realize that same duty doesn’t stop at the company’s front door — it extends to anyone an employee encounters through their job: clients, customers, vendors, contractors, delivery drivers, even the public.
This is third-party harassment, and it’s a blind spot that costs employers dearly. Ignore it, and you’re not just failing to protect your people — you’re leaving the door wide open to serious legal exposure under both state and federal law. Exposure many employers don’t see coming until it’s already too late.
If you operate a transportation or logistics business, where drivers and warehouse workers regularly interact with third parties at locations you don’t control, that risk deserves serious attention.
What is third-party harassment?
When your employee is subjected to a hostile work environment or discriminatory conduct by someone who doesn’t work for your company, that’s third-party harassment.
In the transportation context, examples include:
- a truck driver subjected to racial slurs by warehouse staff at your facility
- a female driver receiving unwanted sexual comments from shipping clerks
- or a dock worker mocked for their religion, disability, or national origin by a visiting vendor.
The harasser’s employment status doesn’t determine your liability. What matters here is whether you knew (or should have known) about the conduct and whether you took prompt and appropriate action to stop it.
The legal framework: California FEHA and federal law
Under the state’s Fair Employment and Housing Act (FEHA), you may be held liable for harassment by non-employees if you knew or should have known about the conduct and failed to take immediate and appropriate corrective action. Since 2019, this protection covers harassment based on all protected characteristics, not just sexual harassment. This includes race, religion, disability, age, national origin, sexual orientation, and gender identity.
FEHA is considered more protective of employees than its federal counterparts. Under federal law, including Title VII, the Americans with Disabilities Act (ADA), and the Age Discrimination in Employment Act (ADEA), similar principles apply. You still have a duty to take prompt corrective action when you become aware of third-party harassment. But California’s standards are higher, and the potential damages are broader, including compensatory damages for emotional distress, lost wages, punitive damages in egregious cases, and attorneys’ fees.
Note: California FEHA includes a separate claim for failure to prevent harassment. Even if the underlying harassment claim doesn’t succeed, your policies, training, or reporting procedures may be deemed inadequate, and you can still face liability.
Why do transportation businesses face heightened risk?
Though the legal principles are the same across industries, the risk to transportation employers is higher.
That’s because of the nature of the work. Truck drivers spend most of their working hours at facilities they don’t control: customer warehouses, shipping and receiving docks, ports, rail yards, etc. If your driver is harassed by warehouse staff, dock supervisors, security personnel, or port employees, you still have a duty to respond. Distance from the incident is no defense.
The same risk runs in the other direction. If you own a warehouse or distribution company and your employees harass visiting drivers, you can face liability even though that driver doesn’t work for you. You’re responsible for maintaining a workplace free of unlawful harassment, and that obligation extends to third parties present at your facility.
A common and costly scenario: Both companies know about the problem. Neither acts. The driver reports harassment at a customer location. Carrier dispatch knows. The customer’s management knows. Deliveries continue unchanged for months. In this situation, the carrier faces exposure for failing to protect its driver, the customer faces exposure for allowing discriminatory conduct at its facility, and retaliation claims may arise if the driver is later penalized for reporting the issue.
What does “appropriate corrective action” look like?
The legal standard is prompt, reasonable action, not perfection. What that looks like in practice depends on the circumstances, but if you’re a transportation employer, it may include:
- Investigating the complaint promptly and documenting the investigation
- Contacting customer or vendor management directly
- Requesting that the offending individual be removed from interactions with the affected employee
- Reassigning deliveries or routes where feasible
- Escalating the issue through contractual channels
- Refusing service or terminating the customer relationship if necessary
What is not appropriate corrective action? Telling your employee to “please deal with it” or “just ignore it.” That opens you to liability.
Steps for transportation employers to take now
Frequently, third-party harassment claims are preventable. The carriers and logistics companies insulated against them are the ones who build the right policies and procedures before a problem arises.
Update your anti-harassment policies: Policies should explicitly address harassment by customers, shippers, receivers, vendors, and contractors, not just coworkers and supervisors. If your current policy doesn’t mention third parties, it needs to be revised.
Create reporting procedures that work for your drivers: Employees who work remotely from your facilities need a clear, accessible way to report third-party harassment. A policy that only contemplates in-person HR reporting doesn’t serve your drivers on the road.
Train your dispatchers, terminal managers, and supervisors: The people most likely to receive a complaint from a driver need to know what to do with it. Training should cover what third-party harassment looks like, how to respond to a complaint, and how to document corrective action.
Add contract provisions with customers and vendors: Agreements with shippers, receivers, and other business partners should include mutual commitments to comply with anti-discrimination laws. This both sets expectations and strengthens your position if a relationship needs to be terminated because of harassment.
Document everything: When a complaint is received and action is taken, document it. The difference between a defensible response and significant liability often comes down to what you can show you did and when.
Protect your business today
In California, the greatest risk from third-party harassment usually arises not because the harasser is a third party, but because the employer failed to take reasonable, prompt steps to stop the conduct once it knew (or should have known) about it. If you’re operating across multiple locations with employees who routinely work in third-party environments, that means building the systems and policies to catch and respond to these situations before they become claims.
Do you have questions about your current policies or want to know how to respond to a third-party harassment claim? Our employment law team is here to help. Give us a call today.
FAQs
Third-party harassment occurs when an employee experiences harassment or discrimination from someone who is not employed by the same company, such as a customer, client, vendor, contractor, or visitor. In California, employers can be held liable if they knew or should have known about the harassment and failed to take prompt, appropriate corrective action. This applies even when the harassment occurs at a customer or vendor location rather than the employee’s own workplace.
Yes. Under the state’s Fair Employment and Housing Act (FEHA), employers may be liable for harassment committed by customers, clients, vendors, contractors, or other third parties if they knew or should have known about the conduct and did not take immediate and appropriate corrective action. Liability can arise even if the harasser is not an employee of the company.
Transportation and logistics employees, including truck drivers and warehouse workers, frequently work at customer facilities, distribution centers, ports, and other locations outside their employer’s control. Because these employees regularly interact with third parties, they face a higher risk of harassment. Employers must still investigate complaints and take reasonable steps to protect employees, even when the misconduct occurs off-site.
Employers should respond promptly by investigating the complaint, documenting their findings, communicating with the third party’s management when appropriate, and taking reasonable corrective action to stop the harassment. Depending on the circumstances, this may include reassigning work, requesting that the offending individual no longer interact with the employee, escalating the issue through contractual channels, or ending the business relationship altogether.
Transportation employers can reduce legal risk by updating anti-harassment policies to address third-party conduct, providing accessible reporting procedures for drivers and remote employees, training supervisors and dispatchers on how to handle complaints, including anti-harassment provisions in customer and vendor contracts, and documenting every complaint and corrective action taken. Proactive policies and training can help prevent claims and demonstrate compliance with California law.
An employer that fails to address known third-party harassment may face claims under the state’s FEHA for both the underlying harassment and failure to prevent harassment. Potential consequences include compensatory damages, emotional distress damages, lost wages, punitive damages, and in some cases, attorneys’ fees and reputational harm. Prompt action and well-documented responses are critical to limiting liability.