Best Practices For Preventing Sexual Harassment Claims

This month, we are going to tackle a sensitive subject: sexual harassment. If your community doesn't already have written policies and procedures to deal with sexual harassment, you may wonder why you need them. Perhaps you believe it could never happen in your community, and that by raising the issue, you'll only encourage residents or applicants to file questionable complaints. Or perhaps you are simply confused about how to address sexual harassment complaints in your community, particularly since such cases often boil down to a “he said, she said” dispute between a staff member and a resident—and you may not know how to determine who's telling the truth.

Nevertheless, you need written policies and procedures to prevent sexual harassment—which is considered a form of discrimination based on sex—just as you would need for any other form of discrimination prohibited under fair housing law. As the owner of a rental community, you are potentially liable for sexual harassment against residents or applicants, not only by your employees and agents but also by third parties, such as vendors and other residents. Without policies and procedures for dealing with sexual harassment, your community is vulnerable to a potentially expensive fair housing litigation.

In recent years, the U.S. Department of Justice (DOJ) has stepped up enforcement efforts aimed at dealing with sexual harassment in residential housing. The department notes that women—particularly those who are poor and with limited housing options —often have little recourse but to tolerate sexual harassment or risk having their families and themselves removed from their homes. The agency has come down hard on owners accused of sexual harassment, with the dual goal of providing relief to victims and sending a message that sexual harassment in housing will not be tolerated.

Example: Last summer, the co-owner of a Minnesota community agreed to pay $360,000 in damages and $40,000 in civil penalties to settle a sexual harassment complaint under federal fair housing law. According to the DOJ, the co-owner engaged in unwanted verbal sexual advances and touching, conditioned the terms and conditions of women's tenancy on the granting of sexual favors, and entered the apartments of female tenants without permission or notice. The man also was accused of coercion, intimidation, threats, and interference with female tenants in the use of their apartments.

Without admitting liability, the man agreed not only to pay the $400,000 settlement but also to hire an independent management company to manage his properties [U.S. v. Bathrick, August 2007].

Communities also face potential liability for civil damages and penalties in private lawsuits for sexual harassment under federal, state, or local fair housing laws. If found liable for sexual harassment, your community could even face the loss of the right to participate in federal housing programs.

Example: Last summer, HUD disqualified a Nebraska community owner from the right to do business with the federal government—including the Section 8 housing program—for three years, after he was found liable for sexual harassment under fair housing law. Based on the court's findings that he subjected numerous female tenants and applicants to severe, pervasive, and unwanted verbal and physical sexual advances over a 10-year period, HUD found sufficient grounds for debarment, a process intended to assure HUD that a participant in its programs who has acted irresponsibly is disqualified from continued participation.

HUD contended that the owner used tenancies partly financed by federal payments to take advantage of low-income women, and the department could not be assured that “its funds are being spent properly or that the public is being adequately protected” [U.S. v. Koch].

To help you protect your community from potential liability for sexual harassment claims, this month's issue explains the fundamentals of sexual harassment under fair housing law. You will learn some concrete steps to take to minimize the risk that sexual harassment will occur at your community—and what to do if you ever receive such a complaint. To test what you have learned, you can take the Coach's Quiz at the end of the lesson.

WHAT DOES THE LAW SAY?

The Fair Housing Act (FHA) prohibits discrimination in housing because of race, color, national origin, sex, familial status, disability, or religion.

Sexual harassment is considered a form of discrimination based on sex, under the FHA. But what is sexual harassment in the context of rental housing? The statute itself does not refer to sexual harassment, and though HUD issued proposed regulations for sexual harassment cases in late 2000, the proposed rule was never formally adopted.

In the absence of formal guidance, courts have adapted concepts from workplace sexual harassment cases to resolve sexual harassment claims under fair housing laws. It's not a perfect fit, according to legal scholars, who argue that even stricter standards of liability are needed to protect women in their homes than are needed in their workplaces. At present, however, courts generally apply workplace sexual harassment concepts to housing cases and recognize two forms of sexual harassment:

Conditional tenancy. Known in legal circles as “quid pro quo” (literally, “this for that”) discrimination, this form of sexual harassment occurs when submission to unwelcome sexual advances is made a term or condition of the tenancy. In other words, the resident is pressured to accept unwelcome sexual advances in exchange for something else related to the tenancy. It could be either receiving a benefit—such as reduced rent—or avoiding a detriment—such as being evicted for late payment of rent.

In most cases, a single incident of this type of sexual harassment is enough to amount to a violation of fair housing laws. Current HUD regulations specifically address this type of sexual harassment by making it unlawful to deny or limit services or facilities in connection with the rental of a dwelling “because a person failed or refused to provide sexual favors” [HUD 25 CFR 100.65(a)(5)].

Hostile housing environment. This form of sexual harassment occurs when an owner subjects a resident to severe and pervasive sexual harassment that unreasonably interferes with the use and enjoyment of the premises. For example, a resident may allege a hostile housing environment when she is repeatedly subjected to unwelcome comments, jokes, or advances of a sexual nature.

The conduct may be verbal, physical, or a combination of both, as long as it is sufficiently “severe and pervasive” that a reasonable person would find it offensive. To decide whether the conduct meets that threshold, courts look at the context, nature, severity, scope, frequency, duration, and location of the incidents, as well as the characteristics of the people involved.

In contrast to conditional tenancy claims, a hostile housing environment generally requires a pattern of offensive behavior. In most cases, one incident is not enough to establish a hostile housing environment claim, because “isolated or sporadic” sexually inappropriate conduct is not sufficiently pervasive or severe enough to interfere with the resident's tenancy.

Nevertheless, it isn't impossible for a resident to bring a claim based on a single incident in an extreme case: At least one court refused to rule that a single incident of harassment will never support an actionable claim [DiCenso v. Cisneros, September 1996].

LIABILITY FOR SEXUAL HARASSMENT

Aside from liability for their own misconduct, owners face potential liability for sexual harassment by other people—employees, agents, and vendors—even other residents.

In general, owners are liable for conduct of their employees or agents, who are authorized to act on the owners' behalf. The law generally holds people responsible for actions of their employees or agents who are acting within the scope of their duties. Courts look at factors such as the nature of the employee's duties and his level of authority, to decide whether he was acting within the scope of his duties.

For the most part, courts have rejected the argument that sexual misconduct should never be considered within the scope of anyone's duties—for example, that a property manager's job is to manage the community (collect rents, oversee repairs, and the like)—not to sexually harass residents. The courts generally don't look at it that way, reasoning that when an owner gives a property manager the authority to control the details of the tenancy and access to the unit, the owner may be responsible if the property manager misuses that authority to sexually harass the resident.

When it comes to sexual harassment by third parties, such as outside vendors or another resident, owners may be liable if the owner knew or should have known about it and did nothing to stop it.

COACH'S TIP: Many people think that the law protects only female residents or applicants from sexual harassment, but the law also recognizes that men may be victims of sexual harassment. Fair housing law prohibits discrimination on the basis of sex, so it prohibits both opposite-sex and same-sex sexual harassment if the misconduct occurred because of the victim's sex.

For example, a New York court ruled that an owner was liable for $10,000 in damages under state law for same-sex sexual harassment of a resident. According to the resident, the owner subjected him to a hostile housing environment due to his lack of interest in having a sexual relationship with the owner. Upholding the damage award, the court found that the owner engaged in a continuous course of unwelcome, sexually offensive behavior toward the resident, which altered the terms of his tenancy [Matter of State Division of Human Rights v. Stoute, November 2006].

7 RULES TO PREVENT SEXUAL HARASSMENT CLAIMS

Rule #1: Establish Sexual Harassment Policy

The first step to protect your community from liability is to establish a sexual harassment policy, advises fair housing expert Nanette Cavarretta.

Though the law is not settled on this subject, having a sexual harassment policy may provide you with a defense to a sexual harassment complaint under fair housing law. In workplace harassment cases, the law recognizes a defense when an employer has a reasonable anti-harassment policy and the employee unreasonably failed to take advantage of it. In any event, a written policy will reinforce your community's zero-tolerance policy toward sexual harassment by banning sexual harassment and warning that you will take prompt disciplinary action against anyone violating it.

Fair housing attorney Avery Friedman agrees. “It is imperative to have a clear, written, distributed policy with meaningful consequences if one engages in sexual harassment,” he says.

Cavarretta recommends that you have your attorney write up the policy for your community. If you choose to write it up yourself, she says, make sure your attorney looks it over before distributing it.

At a minimum, the policy should state that your community does not allow discrimination under federal, state, or local law, and that sexual harassment of any kind will not be tolerated in your community, Cavarretta says.

The policy should encourage anyone who believes they have been subjected to sexual harassment to file a complaint, and it should identify to whom the complaint should be addressed. The policy should spell out how sexual harassment complaints will be handled, such as where they go, how they are investigated, and how they are to be resolved. It should also state that sexual harassment by employees will not be tolerated and is grounds for discipline, including dismissal.

COACH'S TIP: Review your community's other policies and procedures to reduce the risk of sexual harassment claims. For example, you may be vulnerable to sexual harassment complaints related to your maintenance staff because they provide services and have access to residents' homes. To reduce the risk of improper conduct—or false accusations of improper conduct—by your maintenance staff, maintain and follow written policies on how maintenance requests are handled. In addition, consider adopting a written code of conduct for maintenance workers, with guidelines such as:

• Enter units only for repairs or maintenance, or in case of emergency;

• Give reasonable notice before repair or maintenance visits;

• If the resident is home, don't enter the unit unless the resident lets you in;

• Treat all residents the same;

• Don't fraternize with residents;

• Respect residents' privacy; and

• Don't allow yourself to be in a compromising position.

Rule #2: Distribute Sexual Harassment Policy

It's in your best interests to make sure that applicants, residents, your employees, and outside vendors are advised of your sexual harassment policy. It puts everyone on notice that you treat the subject seriously and will take action to address any complaints.

Post your policy in the rental office and distribute it to applicants as part of the lease packet, advises Cavarretta, who also recommends including it as an addendum to leases.

Distribute the policy to all current residents, to give them notice of your policies and procedures for dealing with sexual harassment. Doing so will help your defense against liability for any claims of sexual harassment filed by one resident against another.

Give a copy of the policy to your employees and have them sign an acknowledgment that they received it, says Cavarretta. Attach the policy to your employee handbook, and revise your community's employment practices and procedures to specifically state that sexual harassment will not be tolerated and is grounds for discipline, including discharge. Your employee policy should offer examples of prohibited conduct, such as:

• Explicitly or implicitly suggesting sex in return for living in the community, receipt of services, or otherwise related to the terms and conditions of the tenancy;

• Suggesting or implying that failure to accept a date or sex would adversely affect the resident's tenancy;

• Unwanted physical contact, such as touching, grabbing, or pinching;

• Oral or written sexually suggestive or obscene comments, jokes, or propositions;

• Displaying sexually suggestive objects, pictures, or magazines; and

• Expressions of sexual or social interaction after an indication that such interest is undesired.

COACH'S TIP: Outside vendors hired to provide services such as carpet cleaning, painting, landscaping, and pool maintenance for your community are a frequent source of sexual harassment complaints, according to Friedman and Cavarretta. To protect yourself from liability for sexual harassment by outside vendors or their employees, Cavarretta recommends that you attach your sexual harassment policy as an addendum to their contracts. Get help from your attorney for the specific language, but the gist of the addendum should be that your community has a policy prohibiting sexual harassment and that a violation of the policy is grounds for termination of the contract.

Rule #3: Provide Sexual Harassment Training

To put your policy in action—and reinforce your commitment to prevent sexual harassment in your community—training is a must. Friedman stresses the importance of a clear, understandable, instructional component for staff and vendors (to the extent you can get their cooperation) by someone knowledgeable, given at periodic staff meetings and trainings.

Friedman emphasizes that the training must be meaningful. In addition to explaining the basics of what sexual harassment is, the training should offer examples of prohibited conduct and strategies on how to avoid potentially risky situations. According to Friedman, the bottom line is the message: “Don't say anything to female coworkers or residents that you wouldn't say to your mom or your daughter.”

Keep written records of the training. Friedman recommends preparing a document that confirms the place and date of the training, prepared in duplicate, both signed by the employee (one kept by the office).

Rule #4: Investigate Sexual Harassment Complaints

Respond to sexual harassment complaints by investigating and resolving the problem quickly and fairly. Such investigations may be time-consuming and difficult, Cavarretta observes, but it's important to invest the time to perform a through investigation.

Your sexual harassment policy should identify who will handle sexual harassment complaints. Cavarretta suggests that it could be the resident manager, the human resources manager, or, in small companies, the owner. Friedman recommends having a fair-housing coordinator who has the requisite training and experience to be accountable for handling sexual harassment and other fair housing complaints properly.

If you receive a sexual harassment complaint, Cavarretta says you should call your attorney and respond to the resident to acknowledge receipt of the complaint.

The next step is to plan your investigation, advises Cavarretta. When investigating a sexual harassment complaint, interview the person making the complaint, the person accused of sexual harassment, and any witnesses. Reassure the person making the complaint that she took the appropriate action in coming forward and that no retaliation will be tolerated as a result of her statements. Tell the person accused of sexual harassment about the complaint and ask him not to discuss it with coworkers.

When talking to the accuser and the accused, explain your sexual harassment policy and that the investigation will be fair and impartial. Listen carefully, be respectful, and take detailed notes.

COACH'S TIP: If you witness sexual harassment or questionable conduct by employees or others, don't ignore it. Sexual harassment often goes unreported, so you should look into the matter even in the absence of a formal complaint.

Rule #5: Take Disciplinary Action Against Offenders

After completing your investigation, analyze all the information received, and consult your community's human resources department, if one exists, to decide whether sexual harassment occurred, says Cavarretta. Also, contact your attorney for advice.

If you find that a sexual harassment complaint is justified, address it immediately. If it involves misconduct by an employee, take appropriate disciplinary action as provided in your employment policies. Depending on the severity of the misconduct, such disciplinary action may involve a reprimand, suspension, or even termination—whatever level of discipline you reasonably believe will be effective in stopping the misconduct.

COACH'S TIP: Don't ignore complaints against outside vendors or other residents. Investigating them may be a bit more complicated, but it's necessary to do so promptly. Owners are generally held liable for such misconduct if they learn about such a complaint but do nothing to stop the sexual harassment. Contact your attorney for advice.

Rule #6: Communicate Results to Resident

The final step to resolving a sexual harassment complaint is to communicate the results of your investigation to the resident, in writing.

Get your attorney's help to write the letter. You don't necessarily need to go into specific details, but you must give the resident enough information to let her know you took the complaint seriously, you investigated the complaint, and you took action to remedy any problems discovered.

COACH'S TIP: If your community receives a sexual harassment complaint, Cavarretta says that retraining your staff should be an integral part of your response procedures.

Rule #7: Keep Records of Complaints and Responses

Keep complete and accurate documentation of any sexual harassment complaints, notes from your investigation, and your response.

If a resident is dissatisfied with your response to a complaint and files a sexual harassment case against you, you will have the documentation you need to establish a defense. The files will show that you took the complaint seriously, conducted a full and impartial investigation, and took reasonable steps to prevent it from happening again.

COACH'S TIP: If the complaint involves an employee, Cavarretta advises you to keep paperwork in a separate file, as opposed to keeping it with the employee's personnel records.

Fair Housing Act: 42 USC § 3601 et seq.

Fair Housing Act Regulations Amendments Standards Governing Sexual Harassment Cases (proposed rule, Nov. 13, 2000): available at www.fairhousing.com/include/media/pdf/sex har.pdf

Coach Sources

Nanette Cavarretta, CAPS, CAM: Property Management Education Institute; Winter Springs, FL

Avery Friedman, Esq.: Chief Counsel, Fair Housing Council; Cleveland, OH