Are Real Estate Agents Protected from Harassment and Discrimination under the Minnesota Human Rights Act (MHRA)?

The Minnesota Human Rights Act (“MHRA” or “Act”) protects individuals from discrimination in the workplace,[1] including sexual harassment as a form of gender discrimination.[2] Workers are further protected against termination, demotion, or other retaliatory employment actions in response to reporting discrimination or sexual harassment.[3] Ultimately, the MHRA was designed to “provide more expansive protections to Minnesotans than federal law,” its provisions intended to be “construed liberally.”[4]

Enacted in 1973, the law under the MHRA is generally well-developed. That said, few cases have been litigated regarding MHRA protections for real estate agents in particular. This gap in litigation has led to a gray zone surrounding the question of whether real estate agents receive MHRA protection for workplace harassment and discrimination.

This question can be answered through two main lenses: (1) by considering real estate agents as employees for purposes of the MHRA or (2) by looking to other subdivisions of the MHRA that grant real estate agents protection regardless of employee status.

The MHRA expressly protects employees from unfair discriminatory practices and retaliation.[5] Courts traditionally look to a variety of factors to determine whether an individual constitutes an employee or an independent contractor.[6] Such factors include, for example, the method of payment, who provides the necessary tools/office space, and the level of control the employer has over the worker.[7] Under Minnesota law, the level of control an employer has over an individual is the most important factor—the more control, the more likely that person constitutes an employee.[8] While the control factor plays heavily into MHRA cases, courts have opted to reframe the analysis as one that examines the economic realities underlying the work relationship to decide “whether the worker is likely to be susceptible to the discriminatory practices Title VII was designed to eliminate.”[9] Given the close working relationship between real estate agents and their brokerages (which agents typically have exclusive contracts with), Minnesota courts would likely consider real estate agents to be employees for purposes of the MHRA, as their position leaves them “susceptible to the discriminatory practices Title VII was designed to eliminate.”[10]

That said, because the MHRA was designed to be widely inclusive, real estate agents may find protection under other sections of the Act regardless of employee status.

The MHRA also prohibits any “person having the right to sell, rent or lease any real property from “discriminat[ing] against any person or group of persons because of … sex … in the terms, conditions or privileges of the sale, rental or lease of any real property or in the furnishing of facilities or services in connection therewith.”[11] Current case law addressing this section of the MHRA primarily concerns the relationship between a seller and buyer or renter of real property.[12] However, the language of the statute prohibiting sex discrimination in connection with real estate services may apply to the broker-agent relationship. As service providers in the real estate industry, real estate agents may fall under the protection afforded by the MHRA.

Similarly, the MHRA prohibits “any real estate broker, real estate salesperson, or employee or agent thereof [from] intentionally engag[ing] in any reprisal against any person because that person opposed” a forbidden.[13] The language “prohibiting reprisal against any person” likely supports any report by a real estate agent of sexual harassment or discrimination as protected, regardless of employee status.

Finally, the MHRA forbids “business discrimination.” In other words, contracting parties cannot “discriminate on the basic terms, conditions, or performance of the contract because of a person’s race, national origin, color, sex, sexual orientation, or disability.”[14] In the agent-broker context, the following examples would constitute business discrimination under the MHRA:

• A broker or agency’s termination of a real estate agent’s contract because of discriminatory reasons;
• A broker or agency’s termination of a real estate agent’s contract because the agent reported discrimination or sexual harassment; and
• A broker or agency offering a contract to a real estate agent contingent on that agent submitting to romantic or sexual advances.

Ultimately, the law governing the broker-agent relationship under the MHRA is slim. While this article provides a general overview of relevant Minnesota law, each case presents unique circumstances that are best analyzed by a practicing employment law attorney.

NOTES:

[1] Minn. Stat. Ann. § 363A.08.

[2] Minn. Stat. § 363A.03, subd. 13.

[3] Minn. Stat. Ann. § 363A.15.

[4] Kenneh v. Homeward Bound, Inc., 944 N.W.2d 222, 229 (Minn. 2020) (quoting Minn. Stat. § 363A.04).

[5] Minn. Stat. Ann. § 363A.08.

[6] Creative Non-Violence v. Reid, 490 U.S. 730, 751-52 (1989).

[7] Abel v. Abbott Nw. Hosp., 947 N.W.2d 58, 75 (Minn. 2020).

[8] Id.

[9] Wilde v. County of Kandiyohi, 15 F.3d 103, 105 (8th Cir. 1994).

[10] Id.

[11] Minn. Stat. Ann. § 363A.09, Subd. 1(2).

[12] See, e.g., Fletcher Props. v. City of Minneapolis, 947 N.W.2d 1, 16 (Minn. 2020) (noting that the refusal to rent property because of public assistance use constitutes an unfair discriminatory practice); Fletcher Props. v. City of Minneapolis, 931 N.W.2d 410, 416 (Minn. Ct. App. 2019) (noting that landlords cannot discriminate against tenants with regard to public assistance status).

[13] Minn. Stat. Ann. § 363A.15.

[14] Minn. Stat. § 363A.17(3); see also Minn. Stat. § 363A.03, subd. 30 (“person” includes partnership, association, [and] corporation . . .”).