Harassment from other employees or customers will result in liability if not promptly addressed, and simply telling an employee to hide in the breakroom to avoid a harassing customer isn’t going to cut it.

A recent ruling from the 9th U.S. Circuit Court of Appeals involving a bank from Vancouver provides a textbook example of management’s failure to take action against a customer who became too familiar and extremely inappropriate toward an employee.

After opening a checking account, the male customer began visiting the branch and leaving notes for the female employee telling her she was “the most beautiful girl he’[d] seen” and he “would like to go on a date” with her. The lead supervisor was made aware of this unwanted communication and instead of immediately addressing it with the customer, told the female employee to “watch out, you know, that it doesn’t escalate.”

The employee rejected the customer’s offer for a date, but his behavior continued. The customer sent her a long letter stating she “was the most beautiful woman he’s ever seen, that … [she] was his dream girl, that [they] were meant to be together, [and] that he wanted to be with [her].”

The employee, of course, found the letter disturbing because, she said, it was “affectionate and personal.” She showed the letter to several colleagues, including her manager.

Instead of immediately taking steps to stop the unwanted communications, the employee was again warned by management and colleagues to be careful.

The customer also went to other bank locations asking about this particular female employee and talking about dating her. Coworkers described his conduct as “getting creepy” and suggested the employee contact the police because his conduct was potentially “extremely dangerous.”

On Valentine’s Day, the customer sent the employee flowers and a card, saying the two were “soulmates” and “meant to be together.”

Although the employee’s manager finally promised that the customer would not return to the bank, the manager never informed the customer of this decision. Instead, the manager asked the employee to call the customer and tell him it was inappropriate to send her flowers. The employee felt uncomfortable but complied.

The customer agreed to stop the behaviors, but his conduct continued. The branch eventually closed the customer’s account because he was “wasting their time[,]” “badgering them constantly[,]” and “didn’t have any money.”

Shortly thereafter at a charity event where the employee was volunteering on behalf of the bank, she noticed the customer staring and felt threatened.

A few days later, the customer returned to the branch and reopened his account. The manager instructed the employee to open the account for the customer, to which she objected. The customer later sat in the lobby for an hour staring at her, and she was filled with fear and anxiety.

Instead of addressing the customer directly, her manager told the employee to hide in the breakroom if the customer came to the bank.

The bank finally closed the customer’s account and told him not to return, and temporarily transferred the employee to another branch. The employee resigned shortly thereafter and brought action against the bank for sexual harassment and retaliation.

The federal district court granted the bank’s motion for summary judgment and dismissed the case.

But the appellate court reversed that decision, stating that a reasonable juror could conclude that the conduct was sufficiently severe or pervasive to alter her working conditions, and that the employer was liable because it failed to stop the behavior after being put on notice.

The court noted that the employee was “terrorized not only by the customer’s bizarre and erratic behavior in and of itself but also by its unknown potential to escalate.”

Employers are liable for harassment toward employees by coworkers and by third parties, “where the employer either ratifies or acquiesces in the harassment by not taking immediate and/or corrective actions when it knew or should have known of the conduct.”

The bank failed to take any action to end the harassment, adding that “inaction” is not a remedy likely to end the harassment.

The bank argued that it took “action” by directing the employee to contact the customer. To that, the court said, “[W]e refuse to accept the notion that a victim’s own actions immunize her employer from liability for ongoing harassment.” Furthermore, the “action” of having the employee call the customer “could be deemed ineffective” since the customer’s conduct continued.

This case is a shocking reminder that managers need to be trained to properly respond to employee concerns. Employers have an affirmative duty to create a workplace free from fear and intimidation caused by coworkers and customers.

Too often leaders falsely assume that no manager could be this inept. However, here we are again.

Avoiding these outcomes is simple. Implement effective policies. Train your managers. Act immediately upon being on notice. Protect your employees from a hostile work environment.