The Case Behind the New Employer Liability Standard

What allegedly happened during the customer visit

Dorothy Bivens worked as a territory sales representative for Zep, Inc., a manufacturer and distributor of cleaning products. Her position required her to visit customers in the Detroit area, sell products, and maintain business relationships.

During a sales visit to a motel, Bivens entered the manager’s office. According to the court’s account, the manager locked the door, stared at her, and asked whether the two of them could date. Bivens declined, explained that she was married, and asked to leave. The manager then unlocked the door.

Bivens reported the encounter to her supervisor. The supervisor responded by transferring the customer to another sales team, removing Bivens from further contact with the motel manager. The complaint was not escalated to the company’s human resources department because the supervisor considered the matter resolved through reassignment.

The later reduction in force

Around the same period, Zep was reducing costs following changes in business performance during the COVID-19 era. Its president identified sales positions associated with smaller territories for elimination. Twenty-three positions were ultimately cut, including Bivens’s position. Her territory reportedly projected less than $100,000 in annual revenue, well below the company’s stated $240,000 benchmark for the reduction.

Bivens sued, alleging a hostile work environment, retaliation for reporting the customer’s conduct, and race discrimination under Title VII and Michigan law. A federal district court granted summary judgment to Zep, and the Sixth Circuit affirmed that result on August 8, 2025.

What the Sixth Circuit Actually Held

The most important part of Bivens v. Zep concerns the circumstances under which an employer may be responsible for harassment committed by a person who is not its employee or agent.

The Sixth Circuit held that an employer is not liable under Title VII for a nonemployee’s harassment merely because the employer knew or should have known about the misconduct and failed to respond reasonably. Instead, the employee must show that the employer itself intended the discriminatory working conditions.

Intent may exist when the employer:

• Desired the harassment to occur; or
• Was substantially certain that harassment would result from its actions.

That is a much higher bar than ordinary negligence. Proving that a manager responded slowly, overlooked warning signs, or should have predicted trouble may not be enough by itself. The evidence must support the conclusion that the employer deliberately exposed the employee to discriminatory conditions or acted while substantially certain those conditions would result.

Why the court focused on agency law

Title VII applies to employers, but organizations operate through people. Courts therefore use agency principles to determine when an individual’s conduct may legally be attributed to the company.

A supervisor may act with authority supplied by the employer, especially when the supervisor can hire, fire, demote, discipline, or alter compensation. Coworkers are also employees subject to the company’s control. Depending on the circumstances, established agency rules can make the organization responsible for harassment by those internal actors.

A typical customer is different. A customer does not ordinarily agree to act on the company’s behalf and is not controlled by the company in the same way an employee is. The Sixth Circuit therefore concluded that the customer’s discriminatory intent could not simply be transferred to Zep.

Without an agency relationship, the court said Zep could be held responsible only for its own intentional conduct. Because there was no evidence that Zep wanted the motel manager to harass Bivens or knew harassment was substantially certain to happen, the hostile work environment claim failed.

How the Decision Conflicts With the EEOC’s Approach

The EEOC has long stated that an employer may be liable for harassment by a customer or another nonemployee when the employer knew or should have known about the conduct and failed to take prompt, appropriate corrective action. That approach resembles the negligence standard commonly applied to coworker harassment.

The First, Second, Eighth, Ninth, Tenth, and Eleventh Circuits have applied versions of this negligence-based rule to third-party harassment. Decisions within the Seventh Circuit have not been entirely uniform.

The Sixth Circuit declined to follow the majority approach. It reasoned that EEOC harassment guidelines do not control judicial interpretation of Title VII. Citing the Supreme Court’s 2024 decision in Loper Bright Enterprises v. Raimondo, the panel emphasized that courts must independently determine the best interpretation of federal statutes rather than automatically deferring to an agency’s view.

The result is a genuine circuit split. A hotel worker, delivery driver, health care employee, restaurant server, or traveling salesperson could face a different legal standard depending on where the case is litigated. Federal employment law is supposed to be national, but geography has once again entered the chat.

The Supreme Court leaves the split unresolved

Bivens asked the U.S. Supreme Court to review the decision. On April 20, 2026, the Court denied the petition for certiorari. A denial of review does not mean the justices endorsed the Sixth Circuit’s reasoning. It simply left the ruling intact and allowed the conflicting regional standards to continue.

The High Bar Is Not an Automatic Shield

The intent requirement is demanding, but it is not impossible to satisfy. The Sixth Circuit explained that intent can include substantial certainty, not merely an executive writing “Please harass our staff” in the annual business plan. Fortunately, most companies do not have such a department.

Evidence could potentially support employer liability when management repeatedly sends an employee into a predictably abusive situation after receiving detailed reports of earlier incidents. Liability may also become plausible if a company encourages employees to tolerate sexual behavior, uses their appearance to please a particular client, or deliberately sacrifices employee safety to protect an account.

The court discussed earlier cases in which employers knew certain third parties repeatedly targeted women but continued requiring female employees to interact with them. In one example, management allegedly instructed young female workers to be especially cordial and keep a troublesome client satisfied. In another, a hospital continued assigning women to a patient known to engage in repeated sexual touching. Facts like those could permit a jury to find that harassment was substantially certain to continue.

The practical distinction is between an unexpected incident and an employer-created pattern. A business may not be responsible under the Sixth Circuit’s rule for a customer’s unforeseen misconduct. The picture changes when management knows the movie’s ending, keeps pressing replay, and sends the same employee back into the theater.

Why Zep Prevailed on the Other Claims

The retaliation claim

Bivens also alleged that her position was eliminated because she reported the motel manager. To prove retaliation, an employee generally must connect protected activity to the adverse employment decision.

The record did not establish that the executive who selected Bivens’s territory for elimination knew about her complaint. Her supervisor had reassigned the customer but had not escalated the incident. Without evidence that the decision-maker knew about the protected report, the court found no reasonable basis for concluding that the report caused the termination.

This part of the decision contains an important documentation lesson. Employers should be able to explain who made a termination decision, what information that person possessed, and which objective criteria were used. A reduction in force supported by contemporaneous financial records is much easier to defend than one reconstructed months later from memory and optimistic shrugging.

The race discrimination claim

The court also rejected Bivens’s race discrimination theory. Because the termination occurred during a reduction in force, she needed evidence suggesting that Zep singled her out because of race. The Sixth Circuit found the statistical and comparative evidence insufficient. Nineteen of the twenty-three eliminated positions were held by white employees, and the record did not establish that the company’s stated territory-size rationale concealed racial bias.

What the Ruling Means for Employers

Employers operating only within the Sixth Circuit now possess a stronger defense to federal claims arising from customer or vendor harassment. That does not make a minimalist response strategy wise.

Maintain a policy covering third parties

An anti-harassment policy should expressly cover conduct by customers, vendors, contractors, patients, visitors, delivery personnel, and business partners. Employees should not have to solve a legal riddle before deciding whether they are allowed to report someone who does not appear on the payroll.

Investigate reports promptly

Management should document what happened, identify witnesses, review messages or surveillance footage where appropriate, and determine whether the accused person has been the subject of earlier complaints. A response that appears reasonable after the first report may look very different after the fifth.

Use practical corrective measures

An employer may be unable to discipline a customer, but it is rarely powerless. Options may include transferring an account, changing schedules, requiring two employees to attend meetings, prohibiting private meetings, contacting the customer’s management, restricting site access, or ending the business relationship.

Apply the stricter standard across multistate operations

Companies operating beyond Kentucky, Michigan, Ohio, and Tennessee should not build a national policy around the Sixth Circuit’s intent rule. Most other jurisdictions continue to use a negligence standard. A uniform response based on prompt investigation and corrective action is generally safer than handing managers a complicated map and asking them to remember which appellate circuit they entered before lunch.

Do not overlook state and local law

Bivens resolved the parallel Michigan claim on the record and arguments presented in that case. State civil rights statutes, local ordinances, contractual obligations, and common-law claims can differ. A favorable federal standard does not automatically erase every other source of potential responsibility.

Practical Experience: What Organizations Learn After a Complaint

Workplace investigations repeatedly show that the first report is rarely the moment when a problem becomes expensive. The real trouble often starts when the report reaches a manager who treats a paying customer as untouchable. Employees remember the misconduct, but they remember the company’s response even more clearly.

Consider a composite sales scenario. A representative reports that a client repeatedly comments on her appearance and insists that meetings take place after hours. Her manager laughs, calls the client “old-fashioned,” and sends her back because the account generates significant revenue. A second incident follows, then a third. Under the Sixth Circuit’s standard, those repeated assignments could create evidence that the employer was substantially certain the discriminatory conditions would continue. Under the negligence rule used elsewhere, the company may face liability much earlier because it knew of the conduct and failed to take reasonable corrective action.

A better response begins with listening. Managers should avoid debating whether the customer “meant anything by it.” Intentions inside the customer’s head are not the first operational question. The immediate questions are whether the employee is safe, whether further contact should stop, whether anyone else has reported similar conduct, and what records can confirm the account.

Another common experience involves incomplete escalation. A supervisor may believe that switching an account quietly solves everything. Reassignment can be effective, as it was in the factual record described in Bivens, but the organization still benefits from documenting the report. Without centralized records, three different managers may each believe they handled a customer’s “first” incident. The customer, meanwhile, may be assembling a greatest-hits collection across several departments.

Good documentation does not require a novel. A concise record should identify when the report was made, what conduct was described, who received the complaint, what immediate protections were offered, what investigation occurred, and why the selected remedy was considered effective. The file should also record follow-up with the employee. “We reassigned the account and never asked again” is less reassuring than “We reassigned the account, checked in after one week, and confirmed there was no further contact.”

Experience also teaches that retaliation concerns often arise through ordinary workplace decisions. A complainant may later receive a poor evaluation, lose a territory, or be included in a layoff. Even when the decision is legitimate, unexplained timing creates suspicion. Employers should preserve objective criteria, identify the actual decision-makers, and confirm whether those individuals knew about the complaint. Managers should never modify records after litigation begins; courts are not famous for enjoying surprise renovations to the paperwork.

Employees can help create a clear record by reporting specific facts rather than labels alone. Dates, locations, witnesses, exact statements, earlier incidents, and requested protections provide management with something it can investigate. Employees should also preserve lawful copies of relevant communications and promptly report any suspected retaliation.

The broad lesson is that legal minimums and healthy workplace practices are not identical. The Sixth Circuit may require proof of intent for a Title VII claim involving a nonagent, but an organization that responds only when liability becomes nearly certain is operating with the enthusiasm of a smoke alarm that waits for the roof to disappear. Prompt action protects employees, preserves customer relationships when possible, and produces the evidence needed to defend the company when allegations are disputed.

Conclusion

Bivens v. Zep, Inc. establishes one of the nation’s most employer-friendly standards for third-party harassment claims. Within the Sixth Circuit, an employee generally must show that the employer desired the harassment or was substantially certain its conduct would produce harassment. Mere negligence is not enough under the panel’s interpretation of Title VII.

The ruling is narrow but significant. It concerns harassment by nonemployees who are not agents of the employer; it does not replace the established rules governing supervisors and coworkers. It also does not prevent claims under other statutes or state laws.

For responsible employers, the practical playbook remains familiar: invite reports, investigate promptly, separate employees from known harassers, document decisions, and prevent retaliation. A higher litigation threshold is useful. A workplace that never needs to test that threshold is better.