Hostile work environment claims under Title VII & Michigan’s Elliott-Larsen Civil Rights Act (ELCRA); Whether plaintiff was subject to a hostile work environment because of a client’s sexual harassment; When or whether an employer can be vicariously liable for harassment by a non-employee; EEOC v Costco Wholesale Corp (7th Cir); An employer’s direct liability for intending for the harassment to occur; Dunn v Washington Cnty Hosp (7th Cir); Retaliation; Racial discrimination; Forfeited issue as to the denial of a motion to compel discovery; Reduction-in-force (RIF)

[This appeal was from the ED-MI.] In this case under Title VII and the ELCRA, the court held that under agency principles and the text of the statutes, defendant-employer (Zep) could not be held vicariously liable for its former employee’s (plaintiff-Bivens) alleged sexual harassment by a customer. After Zep terminated her employment as a sales representative, Bivens sued for hostile work environment harassment, retaliation, and discrimination under Title VII and Michigan's ELCRA. She claimed that she was fired because she complained that a client had sexually harassed her or because she is black. Zep argued that she was fired as part of an RIF targeting representatives with a territory that had a projected annual revenue below a certain amount. The district court granted Zep summary judgment. On appeal, the court focused on whether an employer can be vicariously liable for the harassment of an employee by a non-employee. It reviewed agency principles and the Title VII text. In an agency context, “employer liability is imputed … only due to the agency relationship between the perpetrator (an employee) and the employer.” This was critical here, “as the client who harassed Bivens was not Zep’s agent.” The Seventh Circuit held in Costco that “‘an employer is not vicariously liable for the sexual harassment of its employee by a customer.’” As to whether Zep was directly liable, the question was whether it made an “intentional 'decision to expose women to [discriminatory] working conditions’ that would give rise to direct liability of the employer.” Applying this intent standard, the court considered the incident as described by the district court. “A client asked Bivens to meet him at the client’s office (ostensibly to discuss a sale). Bivens arrived and entered the office. The client then locked the door, started staring at Bivens, and asked (seemingly twice) if the two could date. The encounter ended when Bivens refused the client’s invitation. None of this would allow a jury to conclude that Zep ‘desired’ such an interaction to occur or was ‘substantially certain’ that it would.” The court concluded “no jury could find that the company violated Title VII by ‘intentionally treat[ing]’ Bivens ‘worse based on sex.’” The same reasoning applied to Michigan’s ELCRA. Her retaliation claim also failed where she could not establish “that ‘her protected activity’—complaining about a customer who sexually harassed her—'was known to those who made th[e] decision’ to lay her off as part of the” RIF. The court further determined that she did not offer “‘additional direct, circumstantial, or statistical evidence tending to indicate that [Zep] singled [her] out . . . for discharge’ because of her race.” Affirmed.