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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 . . .”).

With Rise of Hate Groups, Laws Prohibiting Harassment at Work are Important Tools

With the apparent increase of hate speech and hate groups on the rise in the United States, it is important for employees to keep in mind their rights to be free from hostility and harassment at work under federal and state law.

Title VII of the Civil Rights Act of 1964 (“Title VII”) prohibits discrimination based on sex, race, color, national origin, and religion. It generally applies to employers with 15 or more employees, including federal, state, and local governments. The Americans with Disabilities Act (ADA) protects employees based on disability, and the Age Discrimination in Employment Act (ADEA) protects people based on age. The Minnesota Human Rights Act (MHRA) provides similar protections for employees in Minnesota, and generally applies to any employer, regardless of size.

These laws also prohibit harassment, or a “hostile work environment,” for these same protected classes. For example, both Title VII and the MHRA prohibit an employer from maintaining a hostile work environment on the basis of race or religion. Put another way, the law protects employees from being harassed because of their race or religion (or any other protected status).

In order to qualify as a “hostile work environment” under the law, an employee must experience conduct, including acts or words, that are either severe or pervasive, and based on a protected class (such as race or religion). The harassment must be unwanted, and it must be objectively offensive to a reasonable person. Examples of racial harassment (also called hostile work environment) include hanging a noose in a workspace, using racial slurs or epithets, or repeatedly using racial or similar stereotypes about coworkers.

According to a recent study, many employees find their workplace hostile—as many as one in five employees believes they have experienced hostility at work. At the same time, racial and religious hate groups still continue to exist throughout the United States, including in Minnesota. According to the Southern Poverty Law Center, hate groups are on the rise.

One way to combat hateful speech and conduct is to know and enforce your rights under federal and state employment laws. If you believe that you have been targeted because of race, sex, gender, sexual orientation, religion, age or disability, or experience harassment or hostility at work, contact Teske Katz Kitzer & Rochel today.