Swift v. Realty Executives Nevada’s Choice: Brokerage Liable for Sexual Harassment

A federal appellate court has considered whether Title VII applies to a real estate brokerage for its independent contractor salespeople.

Doris Swift (“Salesperson”) was an independent contractor salesperson associated with Realty Executives Nevada’s Choice (“Brokerage”) from February 1999 through July 2002. When the Brokerage terminated its relationship with the Salesperson because she did not pay her annual dues to the local REALTOR® association, she filed a complaint with the Equal Employment Opportunity Commission (“EEOC”) on August 1, 2002, contending that she had been subjected to sexual harassment by another salesperson associated with the office through his allegedly inappropriate comments. The EEOC reviewed the case and denied her claim, stating that an employer/employee relationship did not exist since she was an independent contractor.

The Salesperson then filed a lawsuit seeking damages for an alleged sexually hostile work environment in violation of Title VII and also for alleged retaliation by the Brokerage because she had complained about sexual harassment. Title VII is a federal statute which bars discrimination in the workplace based on race, color, religion, sex, or national origin. The Brokerage filed a motion to dismiss the Salesperson’s lawsuit, arguing that the Brokerage was not subject to Title VII because it did not have 15 employees and also the Salesperson was an independent contractor, not an employee.

The trial court rejected this motion, finding that the evidence weighed towards finding that the Salesperson qualified as an employee, not an independent contractor. Factors the court found important to its conclusion that the Salesperson was an employee included: she was required to display the Brokerage’s logo in her advertising; she was required to join certain organizations; sales contracts and listing agreements required Brokerage approval; and the Brokerage had the power to assign clients to other salespeople. The case proceeded to a jury, and the jury found in favor of the Salesperson on the sexual harassment claim but denied the retaliation claim. The Brokerage appealed.

In short opinion and without hearing oral argument, the United States Court of Appeals for the Ninth Circuit affirmed the trial court. The issues for the court to consider on appeal was whether the Brokerage was subject to Title VII and also whether the Salesperson could bring a Title VII lawsuit. The appellate court ruled that there was sufficient evidence to support the finding that the Salesperson qualified as an employee of the Brokerage because the Brokerage controlled the most important aspects of her work. Because the Salesperson qualified as an employee, the court ruled that the Title VII requirements for bringing a lawsuit against the Brokerage were satisfied. Therefore, the court affirmed the jury verdict in favor of the Salesperson.

Swift v. Realty Executives Nevada’s Choice,  211 Fed.Appx. 571, (9th Cir. (Nev.)  2006). [This is a citation to a Westlaw document. Westlaw is a subscription, online legal research service. If an official reporter citation should become available for this case, the citation will be updated to reflect this information].

Editor’s Note: NAR and the Nevada Association of REALTORS contributed financial support to the Brokerage’s defense. The Brokerage has filed a petition with the Ninth Circuit seeking a rehearing en banc.

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