Quid Pro Quo and Hostile Environment HUD Proposed Rule, October 21, 2015
person
A.J. Johnson
today
10/26/2015
HUD has published a proposed rule in the October 21, 2015 Federal Register titled, "Quid Pro Quo and Hostile Environment Harassment and Liability for Discriminatory Housing Practices Under the Fair Housing Act." This proposed rule will formalize standards for use in investigating and adjudicating alleged harassment on the basis of race, color, religion, national origin, sex, familial status or disability under the Fair Housing Act.
The comment due date for the proposed rule is December 21, 2015.
While Title VII of the Civil Rights Act prohibits illegal harassment in employment, no standards have been formalized for assessing claims of harassment under the Fair Housing Act. Courts have often applied standards first adopted under Title VII to evaluate claims of harassment under the Fair Housing Act (FHA), but such standards are not always the most suitable for assessing claims of harassment in housing discrimination cases given the differences between harassment in the workplace and harassment in or around one’s home. As described in the proposed rule, "One’s home is a place of privacy, security, and refuge (or should be), and harassment that occurs in or around one’s home can be far more intrusive, violative, and threatening than harassment in the more public environment of one’s workplace. The Supreme Court has historically recognized that individuals have heightened rights within the home for privacy and freedom from unwelcome speech, among other things.
In addition to formalizing standards for assessing claims of harassment under the FHA, the regulation is intended to clarify when housing providers and other covered entities or individuals may be held directly or vicariously liable under the Act for illegal harassment or other discriminatory housing practices.
The rule defines "quid pro quo" and "hostile environment harassment" as conduct prohibited under the FHA, and describes the type of conduct that may establish a claim.
The Proposed Rule
The proposed rule would amend 24 CFR part 100 to establish a new subpart H, entitled, "Quid Pro Quo and Hostile Environment Harassment."
Quid Pro Quo & Hostile Environment Harassment
Any person who claims to have been injured or believes such person will be injured by prohibited harassment is an aggrieved person under the FHA, even if that person is not directly targeted by the harassment. For example, a property manager awards an apartment to an applicant in exchange for sexual favors. Other applicants, who were denied the apartment due to the manager’s provision of the apartment based on sexual favors, are aggrieved persons.
Quid Pro Quo Harassment
Quid pro quo ("this for that") harassment occurs when a person is subjected to an unwelcome request or demand because of race, color, religion, national origin, sex, familial status or disability, and submission to the request or the demand is, either explicitly or implicitly, made a condition related to his or her housing.
The theory has most typically been associated with sex. For example, quid pro quo harassment occurs when a housing provider conditions a tenant’s continued housing on the tenant’s submission to unwelcome requests for sexual favors. A person’s conduct may constitute quid pro quo harassment even when the victim acquiesces or submits to the unwelcome request or demand.
Hostile Environment Harassment
Hostile environment harassment occurs when unwelcome conduct is sufficiently severe or pervasive as to create an environment that unreasonably interferes with the availability, sale, rental, use or enjoyment of a dwelling, the provision or enjoyment of facilities or services relating to the housing, or the availability or terms of residential real estate-related transactions. Claims of hostile environment harassment should be evaluated from the perspective of a reasonable person in the aggrieved person’s position.
Establishing hostile environment harassment requires a showing that: A person was subjected to unwelcome spoken, written or physical conduct; the conduct was because of a protected characteristic; and the conduct was, considering the totality of circumstances, sufficiently severe or pervasive that it unreasonably interfered with or deprived the victim of his or her right to use and enjoy the housing or to exercise other rights protected by the FHA.
Totality of the Circumstances
Factors to be considered in determining whether a hostile environment exists include, but are not limited to:
The nature of the conduct;
The context in which the conduct occurred;
Will consider factors such as whether the harassment was in or around the home;
Whether the harassment was accomplished by use of a special privilege of the perpetrator (e.g., using a passkey or gaining entry by reason of the landlord-tenant relationship);
Whether a threat was involved; and
Whether the conduct was likely to or did cause anxiety, fear or hardship.
The severity, scope, frequency, duration, and location of the incident(s); and
The relationship of the persons involved.
It is particularly important to consider the place where the conduct occurred. In a case decided under the Equal Protection Clause of the Constitution, the Supreme Court described the sanctity of the home as follows: "Preserving the sanctity of the home, the one retreat to which men and women can repair to escape from the tribulations of their daily pursuits, is surely an important value." "The State’s interest in protecting the well-being, tranquility, and privacy of the home is certainly of the highest order in a free and civilized society."
When harassment occurs in and around the home, the victim has little opportunity to escape it short of moving or staying away from the home - neither of which should be required. As one court noted in a sexual harassment case under the FHA, the home is a "place where one is entitled to feel safe and secure and need not flee." (Quigley v. Winter, 8th Cir. 2010). Because of the importance of the home, the proposed rule states that "the same or similar conduct may result in a violation of the Fair Housing Act even though it may not violate Title VII." This indicates HUD intent to establish a lower threshold to show hostile environment under the FHA that that required for employment.
The proposed rule provides that the absence of psychological or physical harm is not required in determining whether hostile environment harassment has occurred. However, the severity of psychological or physical harm may be considered in determining the proper amount of any damages to which an aggrieved person may be entitled.
Type of Conduct
Prohibited quid pro quo harassment and hostile environment harassment require unwelcome conduct. Such conduct may be written, verbal or other conduct and does not require physical contact. Examples include threatening imagery (e.g., cross burning or swastika), damaging property, physical assault, threatening physical harm, or impeding the physical access of a person with a mobility impairment. Unwelcome conduct can be spoken or written, such as requests for sexual favors. It may include gestures, signs, and images directed at the aggrieved persons. It may include the use of racial, religious or ethnic epithets, derogatory statements or expressions of a sexual nature, taunting or teasing related to a person’s disability, or threatening statements. The unwelcome conduct may involve the use of email, text messages or social media.
An individual violates the Act so long as the quid pro quo or hostile environment harassment is because of a protected characteristic, even if he or she shares the same protected characteristic as the targeted person.
With respect to sexual harassment, harassing conduct need not be motivated by sexual desire in order to support a finding of illegal discrimination. Sexually harassing conduct must occur "because of sex." For example, conduct motivated by hostility toward persons of one sex; conduct that occurs because a person acts in a manner that conflicts with gender-based stereotypes of how persons of a particular sex should act; or conduct motivated by sexual desire or control.
Number of Incidents
A single incident can constitute an illegal quid pro quo, or, if sufficiently severe, a hostile environment. In Quiqley v. Winter, the court cited as a quid pro quo violation the implication by a landlord that the return of a security deposit depended on seeing the plaintiff’s nude body or receiving a sexual favor. The court also stated that touching of an intimate area of a plaintiff’s body is conduct that can be sufficiently severe to create a hostile housing environment - even if it was an isolated incident.
Establishing Liability for Discriminatory Housing PracticesDirect Liability
A person is directly liable for failing to take prompt action to correct and end a discriminatory housing practice by that person’s employee or agent where the knew or should have known of the discriminatory conduct. The proposed rule also states that a person is directly liable for failing to fulfill a duty to take prompt action to correct and end a discriminatory housing practice by a third party (i.e., a non-agent) when the person knew or should have known of the discriminatory conduct.
With respect to a person’s direct liability for the actions of an agent, the law recognizes that a principal who knows or should have known that his or her agent has engaged in or is engaging in unlawful conduct and permits it to continue is complicit in or has approved the discrimination. With regard to direct liability for the conduct of a non-agent, the traditional principle of liability that a person is directly liable under the Act for harassment perpetrated by non-agents if the person knew or should have known of the harassment, had a duty to take prompt action to correct and end the harassment, and failed to do so or took action that he or she knew or should have known would be unsuccessful in ending the harassment. For example, an owner may be liable for acts of tenants and management’s children after failing to respond to a tenant’s complaints of harassment (see Neudecker v. Boisclair Corp., 8th Cir. 2003). This indicates that management will be held liable for tenant-on-tenant harassment if they know of the harassment and fail to take action. It is important to note however, that not every quarrel among neighbors amounts to a violation of the FHA.
Corrective actions appropriate for a housing provider to use to stop tenant-on-tenant harassment might include verbal and written warnings; enforcing lease provisions to move, evict or otherwise sanction tenants who harass or permit guests to harass; issuing no trespass orders or reporting conduct to the police; and establishing an anti-harassment policy and complaint procedure. When the perpetrator is an employee of the housing provider, corrective actions might include training, warnings, or reprimands; termination or other sanctions; and reports to the police. The housing provider should follow up with the victim of the harassment after the corrective action is taken to ensure that it was effective.
The "knew or should have known" concept of liability is well established in civil rights and tort law. A principal "should have known" about the illegal discrimination of the principal’s agent when the principal is found to have had knowledge from which a reasonable person would conclude that the agent was discriminating. For example, if a housing provider’s male maintenance worker enters female tenants’ units without notice using a passkey, and enters their bedrooms or bathrooms while they are changing or showering and exposes himself, and the tenants complain about this conduct to the manager, the manager has reason to know that unlawful discrimination may have occurred. If the manager conveys this information to the owner, neither the owner nor the manager takes any corrective action, they are both liable for violating the FHA. In such as case, the principal is liable as if the principal had committed the act.
Vicarious Liability
A person is vicariously liable for the discriminatory housing practices of his or her agents or employees based in "agency law." Under agency law, a principal is vicariously liable for the actions of his or her agents taken within the scope of their relationship or employment, as well as for actions committed outside the scope of the relationship or employment when the agent is aided in the commission of such acts by the existence of the agency relationship. Unlike direct liability, someone may be vicariously liable for the acts of an agent regardless of whether the person knew of or intended the wrongful conduct or was negligent in preventing it from occurring. To be vicariously liable, an agency relationship must exist.
Unlike Title VII, the "affirmative defense" against vicarious liability does not apply to fair housing, and no known court case has extended the Title VII affirmative defense to fair housing claims. Under Title VII, an employer may avoid vicarious liability by showing that the employer exercised reasonable care and took corrective action, and that the victim failed to take advantage of administrative options to address the issue. In the housing context, whether the perpetrator is a property manager, mortgage loan officer, a realtor or a management company’s maintenance person, a housing provider’s agent holds an unmistakable position of power and control over the victimized home seeker or resident. For example, a property manager can recommend (or sometimes even initiate) the eviction or a harassment victim or refuse to renew a lease, while a maintenance employee may withhold repairs to a victim’s apartment or may access the victim’s apartment without proper notice or justification.
This proposed rule is the first comprehensive guidance from HUD regarding the issue of harassment, and will have a significant impact on fair housing harassment cases in the future - especially those relating to sexual harassment. I would expect publication of the Final Rule sometime in the spring or summer of 2016, but even without a Final Rule, the guidance is important and will impact how harassment complaints are dealt with by HUD going forward.