We asked journalist Elizabeth MacBride to explore what sexual harassment means in the world of small business. The names and identifying details of the people she spoke with have been changed. Continue the story with Part 1 and Part 3.

The dinner was electric. Grace and her client had developed a healthy relationship over the years, and lively dinners were a typical way to cap off big days. The wine was flowing, and both were having a good time.

He was 25 years older than she was. There’d never been a hint of anything more than work in their attorney-client relationship.

“He whispered, ‘Can I kiss you?’”

Grace excused herself, went to the bathroom, and decided to pretend it never happened. While she got back to her seat, he had composed himself and acted like nothing happened too. They never brought it up again.

What to do when you—or your employee—is being harassed by a client.

Business owners are 70 percent more worried about sexual harassment impacting their workplaces this year. But what happens when the source of that harassment is a client, customer, or vendor?

Many business owners have encountered clients who recognize their power and enjoy using it as a tool to harass people they feel are smaller than them. “In a client context, you can be at their mercy,” says Grace, a Washington, D.C. attorney in her 50s who has faced perhaps a half-dozen sexual harassers in her career.

At a big company, you could report the incident to human resources, and ask to be reassigned.

But this can be harder at a small business with limited resources.

Here are two powerful ways to handle harassment from a client or customer—as explained by people who’ve been there.

1. Call harassment out right when you see it.

Seventy-five percent of harassment goes unreported, says the Equal Employment Opportunity Commission (EEOC). Harassment often goes unreported because of fears of retaliation.

For small business owners and entrepreneurs, the risks of retaliation are particularly high. When a customer acts threatening, letting go of their business could mean a significant impact on the bottom line.

Yet, calling out offensive behavior right when you see it might actually be better in the long run.

The Feminist Majority Foundation lays out a list of actions people can take to stop sexual harassment right when it occurs, written by Martha Langelan. Among the possible responses is naming the behavior and telling the perpetrator to stop. When confronting the perpetrator, Langelan advises avoiding smiles or timid body language, all of which can weaken a strong reaction.

According to Langelan, “Hold the harasser accountable for [their] actions. Don’t make excuses for [them]; don’t pretend it didn’t really happen. Take charge of the encounter.”

When dealing with a client, there are ways to hold the perpetrator accountable without necessarily embarrassing them.

Take what happened to Anna, a high-level IT consultant. At an industry conference, a client suggested they step into a coat closet. It was clearly offensive; he was hovering over her, and she felt threatened.

But Anna didn’t want to make a scene, so she played it off–as coolly as she could.

“I don’t even have two minutes to spare for you,” she remembers saying.

“It’d be the best two minutes of your life,” the client responded.

“I’m sure,” Anna said sarcastically. “Let’s move on.”

That business account is still hers. 

2. Develop your own rulebook for taking action.

Women in the corporate world are pushing for a new rule: No tolerance.

Yet that same black-and-white thinking may not always work in the small business world because of smaller margins and higher pressures.

The female entrepreneurs I spoke with said they sometimes write off the first infraction as a lapse in judgment. “However, if it persists, I don’t let it sit a second time. Twice is too much,” says Grace, the attorney.

Ultimately It’s important to craft a method that works best for you. Having a mental framework about when and how you choose to respond will give you a reference point for dealing with individual instances.

Sometimes, following your own rules might sometimes that you lose the business.

“I had one client who came up behind me, grabbed me around the waist, and massaged my shoulders. I called him on it, moved out of the way, and did everything short of slapping him,” Grace remembers.

The client never stopped making moves on her. The quid pro quo was clear: Sex was an expected part of the package.

“Eventually, I lost the work,” Grace says.

Over time, Grace developed other clients to cover the lost income. It became a good reminder that as a small business owner, it’s important to never to rely too heavily on one account. You should always be the one in control.

Anna is still at her IT firm, having recently earned a big promotion. Grace is now in the middle of starting a boutique firm with four principals—herself, two other women, and a man.

Each knows that when one of the team members sets a boundary with a client, it’s never up for discussion. “We have one rule,” says Grace, “Support each other. Because the client is not always right.”

Elizabeth MacBride Elizabeth MacBride is a journalist and communications consultant whose work has been published in outlets including Quartz, CNBC, Forbes.com, HBR.com, Advertising Age, Crain's New York, Newsweek, Atlantic.com, and many others.
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