Within a brokerage, sexual harassment claims pose a distinctive challenge. When offensive behavior crosses the line, what can you do?

It’s a fact that people in the workplace don’t always display exemplary behavior toward one another. But at what point do remarks or actions of a sexual nature become legal violations or even crimes?

Lawsuits tell lurid stories of attacks after a holiday party or demeaning behavior at professional conferences, making it clear the problem is not limited to the office. “Sexual harassment can happen anywhere,” says Bruce Aydt, senior vice president and general counsel of Berkshire-Hathaway HomeServices Alliance Real Estate in St. Louis. As a worker safety issue, “it should be taken seriously and thoroughly investigated.”

Even when it doesn’t lead to a court battle, sexual harassment can destroy morale and alienate colleagues, tarnishing the reputation of a brokerage and the professional integrity of a workplace. 

The federal Equal Employment Opportunity Commission references “unwelcome sexual advances” and other conduct in its definition of sexual harassment. However, this standard applies to and protects employees, not independent contractors. As a result, real estate agents who operate as independent contractors might assume they have no recourse. And brokers may think, if an offender is an independent contractor, they are exempt from liability. But the reality of both situations is more complicated and raises important issues, not just from a legal standpoint but as a matter of professionalism.

For brokers, the best course of action is prevention. That starts with making sure everyone in the office knows what constitutes harassment and understands the basics of federal sexual harassment law. According to the EEOC, sexual harassment violates Title VII of the 1964 Civil Rights Act and consists of unwelcome sexual advances or other sexually oriented conduct connected to a victim’s employment or work performance. There are two broad categories:

Quid pro quo harassment, as the name suggests, occurs when someone, usually a supervisor, tries to forcibly turn a business relationship into a romantic one. Submitting to sexual relations with the higher-up is the condition of continued employment or a raise or promotion. It can also result when a romantic relationship sours: The party with the upper hand may force the other person to stay in the relationship with threats or coercion. “Anytime there is no line drawn between professional and casual relationships, peril exists,” says attorney Andrew Lieb of Manhasset, N.Y., who represents and trains real estate professionals.

Quid pro quo harassment is much less common than it was 20 or 30 years ago, says David Schein, a law professor at the University of St. Thomas in Houston and practicing attorney who trains brokers. “I don’t think I’ve seen a case in five years.”

Hostile environment harassment—defined by the Supreme Court as a sexualized atmosphere so severe and pervasive that it “alters the conditions of employment”—is more prevalent, Schein says. The telltale signs are tasteless, raunchy humor; sexual banter; unwanted touching; and pornography in plain view in cubicles or on computer screens. Courts require that the behavior be objectively offensive rather than merely upsetting to the person experiencing it. Hostile environment complaints can also come from those caught in the crossfire of flagrant quid pro quo harassment who feel they’re not competing on a level playing field.

Not every incident that disrupts an office counts as actionable harassment. “Most of what I see are insensitive remarks that weren’t really intended to hurt or create a sexually charged environment,” observes Schein, also a broker for the past 38 years. “A typical complaint is, ‘I really like working here, but there’s an awful lot of sex talk in the lunchroom.’ ” Such complaints are just as likely to come from men as from women today, he says.

What about an employee who assaults a coworker while under the influence? If it’s an isolated event, is it actionable as harassment? Yes, says employment attorney Jo Bennett of Schnader Harrison Segal & Lewis LLP in Philadelphia. “An assault potentially could form the basis of a sexual harassment lawsuit. In a sexual harassment claim, a plaintiff must prove, among other things, that the harassment suffered was severe or pervasive. Courts have recognized that even one severe act could rise to sexual harassment under the legal standards.” It’s worth noting sexual harassment is a form of discrimination connected to a work situation, while assault is a criminal matter involving physical contact.

In a workplace that includes employees and independent contractors, sorting out liability issues seems daunting. In general, in businesses with more than 15 employees, those employees have the right to sue for harassment under federal law. Independent contractors represent a much lower risk of litigation exposure to broker-owners, Lieb says. That’s because brokers aren’t generally liable for harassment of an independent contractor under federal law unless it can be proved that the contractor has been misclassified and has limited control over hours, tools, and other aspects of the work relationship. However, local civil rights ordinances may not exempt brokers from liability with independent contractors, so the advice of an experienced attorney is crucial, Lieb adds.

What if the alleged harasser is an independent contractor? If it’s an employee who has made the complaint, the independent contractor’s status will not necessarily protect a brokerage from liability. In comparable lawsuits filed by hospital workers who alleged harassment by contract physicians, courts have found that employers have a duty to protect employees from sexual harassment by third parties. If it’s an agent complaining of harassment by another agent, the grievance should never be ignored, for business and ethical reasons if not legal ones, Lieb says. “Focus on making your workplace inclusive, where everyone feels respected.” A policy should be in place that specifies reporting and investigation procedures. 

Aydt says sexual harassment training should be part of orientation and a continuing topic of discussion. It also reinforces an ethical obligation expressed in Article 10 of the REALTORS® Code of Ethics, which forbids discrimination based on race, sex, or other protected categories. The National Association of REALTORS® offers a model policy for brokerages, which includes steps for handling complaints. Complainants should receive an assurance against retaliation and a penalty for false reports.

Policies establish legal rights and responsibilities, but training communicates the importance of respect and professionalism and ensures that people understand the policies and complaint procedure, says Lieb, which can prevent people quitting out of frustration. “It’s one way to communicate a respectful office culture,” Lieb says.

Real estate companies need to be prepared to handle these problems, says broker-associate Brooke Wolford of BRIX Real Estate in Minneapolis, a 17- year veteran. Wolford had an incident years back with a colleague who made no secret he wanted to date her. When he wouldn’t back off, things became uncomfortable, she says. “There was no one to complain to, and I didn’t think they’d back me up because he was a top seller.” Her solution was to leave. Wolford thinks if the problem cropped up today, she’d be more likely to go through office channels. 

To keep issues from escalating, managers should hold moderated meetings where agents and staff can discuss what it means to be respectful and identify barriers to be overcome. Leading by example in communications and demeanor sets the professional expectations that apply to everyone affiliated with an office.