Here is a common situation. Imagine you work as a server at a busy restaurant. One regular customer makes comments about your body every time he comes in. He stands too close. He touches your back when you walk past. You tell your manager. Your manager says the man is a good tipper and tells you to handle it yourself.
Nothing changes. The customer keeps coming in and keeps doing it. You start dreading your shifts. You ask to be moved off his section, and instead your hours get cut. A lot of workers think nothing can be done here, because the person doing the harassing does not work for the company. That is not what California law says.
Under California's Fair Employment and Housing Act, an employer may be responsible for harassment by people who do not work for it — customers, clients, vendors, and other people who do not work for the employer — when the harassment is because of sex or another characteristic protected by law. The employer is on the hook if it, or its agents or supervisors, knew or should have known about the conduct and failed to take immediate and appropriate corrective action. (Gov. Code § 12940(j)(1).)
Also, this protection doesn’t cover only typical employees on payroll. Section 12940(j)(1) covers employees, job applicants, unpaid interns, volunteers, and people providing services under a contract. Also, it is unlawful for an employers to retaliate against employees who complain about the harassment. For example, by termination or pay and shift reductions. The point is simple: once a manager knows a customer is harassing a worker, "he's just a customer" is not an appropriate answer under California law.
This is a made-up example used to explain the law. It is not based on any real case, company, or person.
Source (statute): https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=12940.&lawCode=GOV