March 2022 Coach's Quiz
We’ve explained how you can be liable for harassment and other fair housing violations that your contractors commit. We’ve also outlined six things you can do to minimize these liability risks. Now it’s your turn to see if you can apply the principles to real-life situations that may arise in your own contractor operations. Take the COACH’s Quiz below. The correct answers (with an explanations) follow the Quiz. Good luck!
A tenant on the second floor complains that the contractor you use to maintain the community swimming pool asked her to perform oral sex on him and then called her a f*** c*** when she refused. What should you do?
a. Ignore the complaint since the pool contractor isn’t your agent.
b. Terminate the pool contractor immediately.
c. Investigate and take action against the contractor if the report turns out to be true.
A landlord who’s strongly and personally committed to fair housing principles is sickened to learn that three people in her leasing office have been using racial slurs to refer to African-American applicants. Although the landlord didn’t in any way authorize or approve of this behavior, she still faces potential vicarious liability for their actions. Question: Of the following people who used racial slurs, for whom would the landlord NOT be liable?
a. A leasing representative who works for the landlord as an employee.
b. A leasing representative employed by an independent contractor that the landlord has hired.
c. The landlord’s husband, who doesn’t work for her but hangs out in the leasing office and wears a shirt with the community’s logo.
COACH’S ANSWERS & EXPLANATIONS
Correct answer: c
Reason: Rules #4 and #5 apply to this situation
Rule #4: Take Special Precautions to Prevent Sexual Harassment Claims
Rule #5: Establish a Complaint Reporting and Investigation System
Your duty is to take steps to address harassment that you know or should know about. And now that the tenant has complained, you know, or should at least suspect, that the pool contractor is sexually harassing one of your tenants. So, you need to do something to guard against the risk of direct liability under the FHA.
The first step: Promptly investigate the complaint. If you find that the pool contractor actually did sexually harass the tenant, take immediate action based on your judgment of the situation. And don’t give up until you actually get him to stop. For example, be prepared to take stronger measures if the stern warning you decide to provide doesn’t work, up to the point of terminating his contract. Thus, c. is the right answer.
Wrong answers explained:
a. The pool contractor may or may not be your agent. The scenario doesn’t provide enough facts to make an informed judgment on this question. But the question of agency is actually irrelevant in this case because you can be directly liable for the contractor’s sexual harassment to the extent you know about it and don’t seek to prevent it. That’s why reason a. is wrong.
b. Choice b. is wrong because, while it may solve the sexual harassment issue, immediately terminating the contractor on the basis of this one accusation would also be premature and unfair. The tenant’s complaint, in other words, triggers the duty to investigate; the duty to take action against the contractor doesn’t arise unless and until you determine that the tenant’s sexual harassment complaint is true.
Correct answer: b
Reason: Rule #3 applies in this situation
Rule #3: Guard Against Liability for Agents with “Apparent Authority”
A principal is vicariously liable for the acts of its agent as long as the agent is acting within the scope of his or her actual or apparent authority. This is true regardless of whether the principal played any role in or was even aware of the agent’s wrongful conduct. Unlike the other two, the leasing representative employed by the independent contractor wasn’t acting as the landlord’s agent. And since the landlord didn’t instruct or approve of her use of racial slurs, she wouldn’t be vicariously liable for her fair housing offense. So, b. is the right answer.
Wrong answers explained:
a. The reason a. is wrong is that the leasing representative was employed by the landlord, and employees acting within the scope of their employment are considered a principal’s agent.
c. This choice is wrong because the husband was also the landlord’s agent, even though he wasn’t an employee. That’s because an agency relationship can be established by a person who exercises either actual or apparent authority on a principal’s behalf. And while the husband didn’t have actual authority because he wasn’t employed by the landlord, his status as her spouse, coupled with his presence in the leasing office in a shirt bearing the community’s logo, would be enough to prove apparent authority, making him the landlord’s agent.
See The Lesson For This Quiz
|Avoiding Liability Risks for Fair Housing Violations Committed by Contractors|