The Sixth Circuit’s recent decision in Bivens v. Zep, Inc. set forth a significant departure from circuit precedent regarding employer liability for third-party harassment and signaled a potential opening for other courts to challenge the authority of the U.S. Equal Employment Opportunity Commission’s (EEOC) guidance in this area. On August 8, 2025, the Sixth Circuit in Bivens held that to be liable for third-party harassment under Title VII of the Civil Rights Act of 1964, an employer must intend for a client or customer to harass an employee. This holding creates a split within the federal courts of appeals, with other circuits following the EEOC’s guidance which provides for liability based on an employer’s negligence, not its intent.

In Bivens, a former employee of Zep, Inc. sued her former employer under Title VII of the Civil Rights Act of 1964 and Michigan state law. The former employee claimed that while employed by Zep, one of its clients locked her in his office and made forward comments that the two should date. The Sixth Circuit, in affirming the trial court’s decision to grant the employer’s motion for summary judgment, concluded there was no evidence that Zep intended for the client to harass the employee, or that Zep was substantially certain that the employee would be harassed if she met with the client.

The Sixth Circuit’s holding in Bivens breaks from existing EEOC guidance and the law in six sister circuits. The current negligence-based approach adopted by the EEOC and followed in those other circuits requires only that the employer have known or should have known about the third-party harassment directed at an employee and the employer failed to take action to stop it. In declining to follow the EEOC’s guidance, the Sixth Circuit relied on the U.S. Supreme Court’s 2024 decision in Loper Bright Enterprises v. Raimondo which eliminated the deference typically afforded by courts to agency interpretation of laws those agencies enforce, and emphasized that even if the EEOC has authority to interpret Title VII, the court remains obligated to “independently interpret the statute.”

In so doing, the Sixth Circuit reasoned that the negligence standard applies to harassment by co-workers and supervisors, both of whom are “agents of the employer, meaning their intent may be imputed to the employer through agency law.” In explaining why the same negligence standard did not apply to third-party clients or customers, the court explained that third-party clients and customers are not agents of the employer, and there is “no legal mechanism for imputing unlawful intent of a customer to a business he frequents.” Therefore, for client-based harassment, the court concluded that an employee must show more than an employer’s mere negligence.

Although the Sixth Circuit’s Bivens decision provides employers with a stronger defense against employee third-party based liability claims, it is important to remember that the holding only establishes binding precedent for states within the Sixth Circuit – Michigan, Ohio, Kentucky, and Tennessee. However, the holding could set the stage for challenges to deference given to the EEOC’s guidance on employer liability for third-party harassment in other circuits as well. Employers within the Sixth Circuit and beyond should remain cognizant of further challenges to the deference given to the EEOC on employer liability for third-party harassment and other EEOC guidance under the new Loper Bright standard. We will continue to monitor developments with respect to employer liability under Title VII.