Can my business be liable if a customer harasses one of my employees?

What this assumes

• The workplace is in California and the employer is subject to the Fair Employment and Housing Act.

• The person harassing is not an employee, which is what brings section 12940(j)(1) into play rather than the ordinary harassment provisions [1].

• You are asking about the employer's exposure rather than about the harasser's own liability.

What changes the answer

• What you knew and when. The provision turns on knowledge, actual or constructive, held by the employer or its agents or supervisors [1].

• What you did after you knew. The question is whether immediate and appropriate corrective action followed [1].

• How much control you had over the nonemployee, which the statute directs be considered along with any other legal responsibility you have for their conduct [1].

• Whether the person harassed was an employee, an applicant, an unpaid intern or volunteer, or someone providing services under a contract, all of whom are named [1].

• Whether reasonable preventive steps were in place at all, which is a separate unlawful practice under section 12940(k) [1].

Where it varies by state, form, carrier, or fact

• This is the California provision. Other states and federal law approach third party harassment differently, and an employer operating in several states is not meeting one standard.

• Whether particular conduct amounts to harassment, and whether a particular response was immediate and appropriate, are questions of fact and law for a tribunal rather than matters this record can settle.

• Insurance for this exposure is commonly sold as a third party extension to an employment practices policy, but those forms are proprietary and vary, so whether any given policy responds is a question about that policy.

Next actions

1. Make sure complaints about nonemployees reach a supervisor by the same route as complaints about staff, because the provision attaches on what the employer or its agents or supervisors knew or should have known [1].

2. Record what was reported, when, and what was done in response. The statute turns on the response, so the contemporaneous note is the evidence [1].

3. Review whether reasonable preventive steps exist and are documented, since failing to take them is separately unlawful [1].

4. Confirm the harassment prevention training obligation is being met, which in California attaches at five or more employees [2].

5. If you carry employment practices cover, ask your broker specifically whether third party claims are within it and on what terms, rather than assuming the extension is present.

Source ledger

2 sources. Every citation number above resolves to a record below. Nothing here sits behind an account.

1. [1]

   California Government Code section 12940 (unlawful employment practices under the Fair Employment and Housing Act)(opens the original record on California Legislative Counsel (leginfo.legislature.ca.gov))

   California Legislative Counsel (leginfo.legislature.ca.gov)Primary lawPrimaryJurisdiction CALast checked September 6, 2026Updates: Amended frequently by the California Legislature; the list of protected characteristics in subdivision (a) has been extended repeatedly, so confirm the current text on leginfo before relying on it.ID ca-gov-code-12940

   What this source supports (5)

   • Section 12940(a) makes it an unlawful employment practice, unless based upon a bona fide occupational qualification, for an employer to refuse to hire or employ a person because of that person's race, religious creed, color, national origin, ancestry, physical disability, mental disability, reproductive health decisionmaking, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, sexual orientation, or veteran or military status.
   • Section 12940(h) makes it an unlawful employment practice for any employer, labor organization, employment agency, or person to discharge, expel, or otherwise discriminate against any person because the person has opposed any practices forbidden under the part, or because the person has filed a complaint, testified, or assisted in any proceeding under the part.
   • Section 12940(j)(1) provides that an employer may also be responsible for the acts of nonemployees, with respect to harassment of employees, applicants, unpaid interns or volunteers, or persons providing services pursuant to a contract in the workplace, if the employer or its agents or supervisors knows or should have known of the conduct and fails to take immediate and appropriate corrective action.
   • Section 12940(j)(1) provides that in reviewing cases involving the acts of nonemployees, the extent of the employer's control and any other legal responsibility that the employer may have with respect to the conduct of those nonemployees shall be considered.
   • Section 12940(k) makes it an unlawful employment practice for an employer, labor organization, employment agency, apprenticeship training program, or any training program leading to employment, to fail to take all reasonable steps necessary to prevent discrimination and harassment from occurring.

   Subdivision (j)(1) is the provision that makes third party employment practices exposure a real thing rather than a marketing category: an employer can be responsible for harassment of its employees by people it does not employ, including customers and contractors, where it knew or should have known and failed to act. Subdivision (k) is a separate unlawful practice in its own right, so a failure to take reasonable preventive steps is actionable independently of whether any underlying discrimination is proved. Read subdivision (a) as a list that grows: characteristics have been added by amendment many times and the record here is the list as read on the access date.

   Active
2. [2]

   California Government Code section 12950.1 - sexual harassment prevention training(opens the original record on California Legislative Information (California Legislative Counsel))

   California Legislative Information (California Legislative Counsel)Primary lawPrimaryJurisdiction CALast checked August 31, 2026Updates: Reviewed at least every 180 days.ID ca-gov-12950-1

   What this source supports (6)

   • An employer having five or more employees shall provide sexual harassment prevention training.
   • Supervisory employees must receive at least two hours of classroom or other effective interactive training.
   • Nonsupervisory employees must receive at least one hour of classroom or other effective interactive training.
   • Each employer covered by the section shall provide the training to each employee in California once every two years.
   • New nonsupervisory employees shall be provided training within six months of hire.
   • New supervisory employees shall be provided training within six months of the assumption of a supervisory position.

   Active

Related questions