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Subcontractor Harassment Creates Liability For Employers

A California general contractor settled a racial harassment lawsuit filed by the Equal Employment Opportunity Commission (EEOC) on behalf of black and Hispanic construction workers.

At one of the contractor's worksites, black and Hispanic workers experienced racial harassment that included offensive remarks and graffiti. The EEOC alleged the contractor did not take appropriate actions to stop the harassing conduct. In the settlement, the employer agreed to pay $725,000 in monetary relief, as well as undertake several steps aimed at preventing harassment in the future. Along with revising its own harassment policies and providing additional employee training, the employer will establish a procedure to make certain its subcontractors have anti-discrimination policies and will create a mechanism through which they can monitor compliance with those policies.

The EEOC will oversee the employer's adherence to the settlement agreement but is pleased the employer is taking steps to improve compliance with federal law at all levels of employment. "Construction Company Hathaway Dinwiddie Settles EEOC Discrimination Lawsuit" (May 13, 2021).


Title VII prohibits discrimination and harassment in the workplace, including racial harassment. Employers who do not address and stop workplace misconduct, including wrongdoing by a third party or subcontractor, expose themselves to discrimination liability risk.

Employers must have a clear policy that prohibits harassment by or against any workplace participant. If your employees regularly interact with third parties, be clear about your protections from third parties, and make sure managers and supervisors understand they have a responsibility to monitor workplace interactions and immediately intervene if harassing behavior occurs. In addition, establish safe and easy procedures for reporting violations of the policy, and promptly investigate all reports. Employers who have ongoing relationships with a third party, like the subcontractors in the above case, need to go further to make sure subcontractors also have anti-discrimination and anti-harassment policies in place. Multiple reporting mechanisms should be available to enable all workplace participants to report wrongdoing.

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