BlogLine

Intent over negligence: Sixth Circuit redefines employer liability for customer harassment

8/27/25

By: Sunshine R. Fellows

In a decision that could reshape how employers respond to harassment by non-employees, the Sixth Circuit in Bivens v. Zep, Inc. held that liability under Title VII requires more than negligence—it demands intent or near-certainty. This ruling diverges sharply from long-standing EEOC guidance and the approach taken by most other federal appellate courts.

What happened in Bivens

Dorothy Bivens worked as a sales representative for Zep, Inc. During a visit to a client site, she experienced inappropriate behavior from a motel manager. She reported the incident, and Zep reassigned the account to prevent further contact. Later, her position was eliminated as part of a company-wide reduction in force. Bivens sued, alleging a hostile work environment, retaliation and racial discrimination. The trial court ruled in favor of Zep, and the Sixth Circuit affirmed.

The Sixth Circuit’s standard: Intent or certainty

The court emphasized that Title VII is designed to address intentional discrimination. Since the motel manager was not employed by Zep, his conduct could not be automatically attributed to the company. Instead, the court held that Zep could only be liable if it either intended the harassment to occur or made decisions that made harassment virtually inevitable.

This marks a significant departure from the more common “knew or should have known” negligence standard. The court found no evidence that Zep acted with intent or substantial certainty, especially since the company reassigned the account after the incident and the executive responsible for the workforce reduction was unaware of Bivens’s complaint.

How this differs from other jurisdictions

The EEOC and most federal circuits, including the First, Second, Eighth, Ninth, Tenth and Eleventh, have long applied a negligence-based rule. Under that framework, employers can be held liable if they fail to take reasonable steps to prevent or correct harassment by third parties. The Sixth Circuit rejected this approach, arguing that Title VII’s language and underlying principles require a higher threshold.

Practical guidance for employers

• Higher threshold in the Sixth Circuit: Employers in Kentucky, Michigan, Ohio and Tennessee now face a more favorable standard in third-party harassment cases.
• Proactive steps still matter: Reassigning clients, documenting complaints and taking swift action remain essential to showing lack of intent.
• Multi-state compliance is key: Employers operating in multiple jurisdictions must continue to meet the lower negligence standard outside the Sixth Circuit.
• Retaliation claims require clarity: Keeping detailed records of who made employment decisions and when can help defeat retaliation allegations.

What this means for EPLI claims professionals

For employment practices liability insurers, the Bivens decision may reduce exposure in the Sixth Circuit. Claims involving customer harassment should now be evaluated through the lens of employer intent or certainty, which may justify lower reserves. However, because most jurisdictions still apply the negligence standard, multi-state claims should be assessed conservatively to avoid under-reserving.

Adjusters should also anticipate that plaintiffs in Sixth Circuit cases will tailor their arguments to meet the new standard, focusing on employer decision-making and intent. Early discovery into internal communications and personnel actions will be critical in shaping defense strategy and settlement posture.

Will the Supreme Court step in?

The Sixth Circuit’s break from both agency guidance and the majority of federal courts creates a split that could invite Supreme Court review. Until then, employers and insurers must navigate a divided legal landscape, one where liability for third-party harassment hinges on geography as much as conduct.

For more information, please contact Sunshine Fellows at sunshine.fellows@fmglaw.com or your local FMG attorney. 

Information conveyed herein should not be construed as legal advice or represent any specific or binding policy or procedure of any organization. Information provided is for educational purposes only. These materials are written in a general format and not intended to be advice applicable to any specific circumstance. Legal opinions may vary when based on subtle factual distinctions. All rights reserved. No part of this presentation may be reproduced, published or posted without the written permission of Freeman Mathis & Gary, LLP.