Discrimination Complaints Lead to Strict Liability

Discrimination Complaints Continue

The US Equal Employment Opportunity Commission (EEOC) has released its 2013 year end statistics on charges filed against companies and individuals.  The EEOC is the governmental department in charge of monitoring and enforcing Federal employment laws – specifically discrimination and harassment.   While the total number of charges have declined slightly from 2012, the figures reveal many areas that property managers should be aware of as they interact with their employees, and as their employees interact with tenants of properties they manage.

In 2013 the EEOC reports that 93,727 charges were filed.  Many of the charges mentioned multiple areas where the individual felt they were being discriminated against.  The largest concentration of complaints arose in a few areas.  Namely: Race, Sex, National Origin, Age and Disability.  Property managers have a unique role that brings them into contact with many different types of people.  This increases the opportunity for a property manager or their employee to offend, discriminate or harass an individual.  It is vital for managers of buildings to realize this risk and mitigate their exposure to it.

When charged with an EEOC violation, the regulatory investigation can be expensive and time consuming.  If found guilty, a company can face compensatory and punitive damages up to $300,000.  For age or sex discrimination, the amount could be higher if liquidated damages are awarded.  There may also be monitoring by a local Fair Housing or governmental agency.

It is also important to note that owners of properties have liability for this as well – even if they hire a property manager to handle the operations of the building.  Federal – and most state – Fair Housing Laws  contain absolute vicarious liability wording.  This means that the owner of a property could be liable even if their manager discriminates against a tenant.

Risk Mitigation

With this risk facing property managers every single day, it is important to be aware of the issues and promote activities that discourage discrimination.  There are a number of ways that building managers can lessen the chance of facing an EEOC investigation and decrease the adverse impact if they do.

1) Training

First, make training a priority within your firm.   Making sure that all employees and building managers are aware of the law is the first step to complying with the law.  Regular announcements and examples can help employees realize how this may impact them specifically. As the law or interpretation of the law changes, inform your employees and staff

Secondly, require each employee to attend a Fair Housing training at least once  a year.  Finding a reputable organization to host classes will not only earn your licensed managers CE, it may also save your firm from a major lawsuit.  The law also changes and obtaining updated information annually is an important aspect to a risk management program.

2) Insurance

Insurance can play a critical role in protecting your firm.   While you cannot insure against a guilty verdict, many policies have coverage for the expenses and defense costs associated with an EEOC violation.  Documentation, time away from the office and legal fees can quickly deplete a firm’s resources.  Having the right insurance in place can protect you.  Since not all insurance policies have this coverage, it is important to engage with a broker who is an expert in this field.

3) Internal Policies and Manuals

Managing a building is a 24/7 job.  There are no days off when a pipe bursts.  However, who handles those emergencies is subject to your discretion.  Be aware of family and religious commitments that may prevent some individuals from working on a particular day.  Forcing them to work or threatening to terminate their job could be conceived as discrimination.

Finally, engage with a employment lawyer to make sure your employee handbook and policies manual are up to date with required wording.


For further discussion on ways to protect your firm, contact a licensed broker today.