Later, Zep terminated Bivens as part of a planned reduction in headcount, citing her territory’s lower projected revenue. Bivens sued, claiming she was fired in retaliation for complaining about the client’s conduct or because she was Black, alleging violations of Title VII of the Civil Rights Act, including hostile work environment, retaliation, and discrimination.
The district court dismissed her claims, and the 6th Circuit Court of Appeals affirmed. The court held that because the alleged harasser was a client, not a company employee, Zep could only be held liable if it intended for the harassment to occur.
Departure from EEOC Guidance
This ruling diverges from the U.S. Equal Employment Opportunity Commission’s (EEOC) 2023 harassment guidance, which states that employers may be liable for harassment by nonemployees (such as customers or vendors) if the employer was negligent in preventing or addressing the conduct (i.e., knew or should have known of the harassing conduct and failed to take appropriate action to address the conduct.)
So far, the 6th Circuit (covering Kentucky, Michigan, Ohio, and Tennessee) joins the 7th Circuit (covering Illinois, Indiana, and Wisconsin) in rejecting the EEOC’s approach.
The Loper Bright Effect
This decision reflects a broader shift in how courts approach agency interpretations following the U.S. Supreme Court’s 2024 decision in Loper Bright Enterprises v. Raimondo. In Loper Bright, the Court overturned the Chevron doctrine, which had required courts to defer to federal agencies’ interpretations of ambiguous statutes they administer.
The Court ruled that under the Administrative Procedure Act (APA), it is the judiciary, not administrative agencies, that resolves statutory ambiguities. This means:
- Courts have more freedom to reject agency interpretations.
- Agency guidance, like the EEOC’s harassment standards, will face more legal scrutiny.
- Employers may have more success challenging agency positions.
Why Should Employers Pay Attention?
Because federal courts are no longer bound to defer to EEOC interpretations, employers must track how their Circuit Court views agency rules. This ruling narrows liability for client harassment in the 6thCircuit, but other circuits may still follow the EEOC’s negligence standard.
Inconsistent rulings mean multi-state employers could face different legal obligations depending on where they operate. Staying informed is essential.
