67666 Federal Register / Vol. 65, No. 219 / Monday, November 13, 2000 / Proposed Rules

Lat 45°37′05′′N., long. 123°56′36′′W.; and

excluding that airspace that extends more

than 12 miles west of the U.S. shoreline; that

airspace within Federal airways; the Astoria,

OR; the Portland-Hillsboro; and the Portland,

OR, Class E airspace areas.

* * * * *

Issued in Seattle, Washington, on October

30, 2000.

Charles E. Davis,

Acting Manager, Air Traffic Division,

Northwest Mountain Region.

[FR Doc. 00–28988 Filed 11–9–00; 8:45 am]

BILLING CODE 4910–13–M

DEPARTMENT OF HOUSING AND

URBAN DEVELOPMENT

24 CFR Part 100

[Docket No. FR 4597–P–01]

RIN 2529–AA89

Fair Housing Act Regulations

Amendments Standards Governing

Sexual Harassment Cases

AGENCY: Office of the Assistant

Secretary for Fair Housing and Equal

Opportunity, HUD.

ACTION: Proposed rule.

SUMMARY: This proposed rule would

amend HUD’s Fair Housing regulations

to establish the standards the

Department will use in sexual

harassment cases.

DATES: Comment due date: January 12,

2001.

ADDRESSES: Interested persons are

invited to submit comments regarding

this proposed rule to the Rules Docket

Clerk, Office of the General Counsel,

Room 10276, Department of Housing

and Urban Development, 451 Seventh

Street, SW, Washington, DC 20410.

Communications should refer to the

above docket number and title.

Facsimile (FAX) comments are not

acceptable. A copy of each comment

submitted will be available for public

inspection and copying during regular

business hours (7:30 a.m. to 5:30 p.m.)

eastern time at the above address.

FOR FURTHER INFORMATION CONTACT:

David H. Enzel, Deputy Assistant

Secretary for Enforcement and

Programs, Room 5204, Department of

Housing and Urban Development, 451

Seventh Street, SW, Washington, DC

20410, telephone (202) 619–8046. (This

is not a toll-free number). Individuals

with hearing or speech impairments

may access this number via TTY by

calling the Federal Information Relay

Service at (800) 877–8339 (This is a tollfree number).

SUPPLEMENTARY INFORMATION The Fair

Housing Act (42 U.S.C. 3600–3620)

(referred to as ‘‘the Act’’ in this rule)

prohibits discrimination on the basis of

sex. Sexual harassment related to

housing has been uniformly recognized

by courts as a form of discrimination

based on sex and a violation of the Fair

Housing Act. Sexual harassment may

violate sections 804(a), 804(b), 804(c),

805, 806 or 818 under the Act. As the

Department’s current Fair Housing

regulations do not address the standards

to be applied in cases of sexual

harassment, courts have looked to Title

VII of the Civil Rights Act of 1964 (42

U.S.C. 2000 et. seq.) (Title VII), and

associated case law and regulations for

guidance in Fair Housing Act cases. (See

Grieger v. Sheets, 1989 WL 38707 (N.D.

Ill); see also Henson v. City of Dundee,

682 F.2d 897 (11th Cir. 1982);

Shellhammer v. Lewallen, 770 F.2d 167

(6th Cir. 1985); Honce v. Vigil, 1 F.3d

1085 (10th Cir. 1993); Beliveau v. Caras,

873 F. Supp. 1393 (D. Cal. 1995);

Krueger v. Cuomo, 115 F.3d 487 (7th

Cir. 1997).) One court has expressed

concern about the Department’s lack of

published standards concerning sexual

harassment as a violation of the Act.

(See DiCenso v. Cisneros, 96 F.3d 1004,

1007 (7th Cir. 1996)).

The Department is promulgating this

proposed rule to provide guidance on

key aspects of evaluating sexual

harassment claims. In formulating the

Department’s position on sexual

harassment, the Department carefully

reviewed case law applying the Fair

Housing Act, case law governing Title

VII, and the Equal Employment

Opportunity Commission’s (EEOC)

guidelines and policy statements. Victims of sexual harassment at home

lose their traditional place of refuge.

‘‘When the harassment occurs in a

woman’s home, it is a complete

invasion in her life. Ideally, the home is

the haven from the troubles of the day,

when home is not a safe place, a woman

may feel distressed and often

immobile.’’ (Regina Cahan, Home is No

Haven: An Analysis of Sexual

Harassment in Housing 1987 Wis. L.

Rev. 1061, 1072 (1987).) At least two

courts have recognized that sexual

harassment in the home may have more

severe effects than harassment in the

workplace. (See Beliveau v. Caras, 873

F. Supp. 1393, 1397 (C.D. Cal. 1995);

Williams v. Poretsky Management, 955

F. Supp. 490, 497 (S.D. Md. 1996).) Sexual harassment violates the

prohibitions against discrimination on

the basis of sex found in sections 804(a),

804(b), 804(c), 805, or 806 of the Act.

Sexual harassment can also violate

section 818 of the Act, which prohibits

threatening, intimidating or coercive

verbal or physical conduct that occurs

because of an individual’s membership

in a protected class. Threatening,

intimidating or coercive verbal or

physical conduct, which occurs

between neighbors or tenants, may

constitute sexual harassment and, if so,

the offending neighbor or tenant will be

liable under section 818 of the Act.

There are two types of actionable

sexual harassment claims: ‘‘quid pro

quo’’ claims and ‘‘hostile environment’’

claims. There will be cases where the

conduct in question may support both

quid pro quo and hostile environment

claims of sexual harassment.

Proposed § 100.500(a)(1)—Quid Pro

Quo

A ‘‘quid pro quo’’ claim exists when

submission to unwelcome sexual

advances and requests for sexual favors

is made a term or condition of housing

related to the sale or rental of dwellings,

the provision of services in connection

therewith, or the availability of

residential real estate-related

transactions. Such a claim may be

established if submission to or rejection

of such conduct is used as the basis for

decisions affecting the provision of

housing or residential real estate-related

transactions and related benefits or

services. Generally, an individual

asserting a quid pro quo claim of sexual

harassment must establish the existence

of an unwelcome demand for sexual

favors based on the individual’s sex and

that the harassment adversely affected

one or more terms, conditions, or

privileges of housing or a residential

real estate-related transaction or

associated benefits or services.

Proposed § 100.500(a)(2)—Hostile

Environment

A person creates a hostile

environment when that person’s

unwelcome conduct is sufficiently

severe or pervasive that it results in the

creation of an environment that a

reasonable person in the aggrieved

person’s position would find

intimidating, hostile, offensive, or

otherwise significantly less desirable.

Generally, an individual asserting a

hostile environment sexual harassment

claim generally must establish that he or

she was subjected to unwelcome verbal

or physical conduct; the conduct was

severe or pervasive; the conduct was

based upon the individual’s sex; and the

conduct made the environment

burdensome and significantly less

desirable than if the conduct had not

occurred.

Reasonable person standard. Whether

conduct creates a hostile environment

will be evaluated from the perspective

Federal Register / Vol. 65, No. 219 / Monday, November 13, 2000 / Proposed Rules 67667

of a reasonable person in the aggrieved

person’s position. The perspective of a

reasonable person in the aggrieved

person’s position is that of an ordinary

person in like circumstances. The

Department believes that the purpose

and intent of the Act is best served by

adhering to the reasonable person

standard and adopts this standard for

cases under the Act. This standard

recognizes that men, as well as women,

may be victims of sexual harassment.

(Oncale v. Sundowner Offshore

Services, Inc., 523 U.S. 75 (1998).) This

standard also recognizes that either

opposite-sex or same-sex discrimination

violates the Fair Housing Act if the

challenged conduct occurred because of

the victim’s sex. (Id.)

The reasonable person standard is the

perspective from which the victim’s

reaction to the harasser’s conduct

should be analyzed to determine

whether an actionable sexual

harassment claim exists. Use of the

reasonable person standard to determine

liability should not be confused with

the standard used to determine

appropriate damages to aggrieved

persons in housing discrimination

cases. It is a well-established principle

in fair housing law that perpetrators of

housing discrimination must take their

victims as they find them; that is,

damages are measured based on the

injuries actually suffered by the victim,

not on the injuries that would have been

suffered by a reasonable person. (Alan

W. Heifetz and Thomas C. Heinz,

Separating the Objective, the Subjective

and the Speculative: Assessing

Compensatory Damages in Fair Housing

Adjudications, 26 Marshall Law Review

3, 21 (1992).)

Proposed § 100.500(b)—Totality of the

Circumstances

Whether any conduct in question

constitutes sexual harassment in

violation of the Act will depend on the

totality of the circumstances involved in

each particular situation on a case by

case basis. (Harris v. Forklift Systems,

Inc., 510 U.S. 17, 22 (1993).) Critical

factors to examine include, but are not

limited to, the context, nature, severity,

scope, frequency, duration, and location

of the incidents, as well as the identity,

number, relative ages and relationships

of the persons involved.

This proposed regulation does not

impose a quantitative requirement on

the incidents of harassment that will

constitute sexual harassment under the

Act. (Harris, 510 U.S. at 22 ‘‘[t]his is not

* * * a mathematically precise test.’’) A

quantitative requirement unfairly

penalizes the person who takes

affirmative steps to avoid further

harassment by avoiding the harasser.

(Gnerre v. Massachusetts Commission

Against Discrimination, 524 N.E. 2d 84,

89 (Mass. 1988).) A single incident of

conduct may constitute unlawful sexual

harassment.

Proposed § 100.500(c)—Unwelcome

Conduct

As evidenced by case law, unwelcome

verbal conduct without physical

conduct may independently support a

sexual harassment claim. (See e.g.,

Grieger, 1989 WL 38707 (N.D. Ill.).)

Verbal conduct includes, but is not

limited to, the use of sexual epithets.

Since verbal harassment may by itself

support a sexual harassment claim

under the Act, it follows that proof of

physical harm is not necessary to

establish a sexual harassment claim.

An intentional touching of any part of

the body may constitute unwelcome

conduct. To establish that conduct is

sexual harassment, it is not necessary

that intentional physical conduct

involve an intimate body part. Evidence

of unwelcome conduct need not be

sexual in nature to support a claim for

sexual harassment. (Id.*3 (citing cases

from the Eighth, Tenth, and District of

Columbia Circuits).)

Proposed § 100.500(d)—Liability

(1) A person is responsible for his or

her acts.

(2) A person shall be vicariously

liable for sexual harassment by his or

her agents. An alleged perpetrator’s

responsibilities, duties and functions

should be carefully examined to

establish whether the perpetrator was

acting in an agency capacity before

determining whether a principal is

liable. This principle is fully consistent

with the Department’s position on a

principal’s liability for the acts of

agents. (See 24 CFR 103.20 (1999), and

preamble to final rule implementing the

Fair Housing Act Amendments of 1988,

54 FR 3232, 3260–3261, January 23,

1989.)

The duty of a property owner not to

discriminate in the leasing or sale of

property is non-delegable. (Alexander v.

Riga, 208 F.3d 419, 432–434 (3rd Cir.

2000); Walker v. Crigler, 976 F.2d 900,

904 (4th Cir. 1992); Marr v. Rife, 503

F.2d 735, 741 (6th Cir. 1974); City of

Chicago v. Matchmaker Real Estate

Sales Center, Inc., 982 F.2d 1086, 1096

(7th Cir. 1996); Coates v. Bechtel, 811

F.2d 1045, 1051 (7th Cir. 1987); Phiffer

v. Proud Parrot Motor Hotel, Inc., 648

F.2d 548 (9th Cir. 1980)). The

Department invites comment on

whether an affirmative defense, similar

to the one that was created for

employers by the Supreme Court in

Title VII cases (Burlington Industries,

Inc. v. Ellerth, 524 U.S. 742 (1998), and

Faragher v. City of Boca Raton, 524 U.S.

775 (1998)) would be appropriate in the

Fair Housing context. The Department

also solicits comments on methods by

which it can incorporate in the

regulation provisions regarding training

and other methods to educate

individuals as to the prohibitions

against sexual harassment under the

Fair Housing Act.

(3) A person shall be responsible for

acts of sexual harassment by third

parties, where he or she, or his or her

agent, knew or should have known of

the conduct and failed to take

immediate and appropriate corrective

action, and had a duty to do so. (Reeves

v. Carrolsburg Condominium Unit

Owners Association, 1997 U.S. Dist.

LEXIS 21762 *23; Cf. Bradley v.

Carydale Enterprises, 707 F. Supp. 217

(E.D. VA 1989).) The duty to take

corrective action may be established by

leases, contracts, condominium by-laws

and local ordinances. (Reeves, 1997 U.S.

Dist., LEXIS 21762, *23.) Examples of

third parties include tenants and

independent contractors.

The Department solicits comments on

other mechanisms that may create a

duty to take corrective action and

factors the Department should consider

when determining whether such a duty

exists.

Proposed § 100.500(e)—Other Related

Conduct

When a housing-related opportunity

or benefit is granted because of an

individual’s submission to sexual

advances or requests for sexual favors,

a person may be held liable for sexual

harassment by other individuals who

were qualified for and had a reasonable

expectation of receiving an opportunity

or benefit, but were denied. (Cf.,

Broderick v. Ruder, 685 F. Supp., 1269

(D.D.C. 1988).) For example, the

manager of a housing complex with a

long waiting list offers to move

applicants to the top of the waiting list

in exchange for sexual favors. Other

applicants, even if they were not

propositioned, but lost housing

opportunities because of the manager’s

preferential treatment of others in

exchange for sexual favors are aggrieved

persons under the Fair Housing Act.

Proposed § 100.500(f)—Evidence of

Psychological harm

Evidence relating to the relative

mildness or severity of an aggrieved

person’s psychological harm is not

relevant to whether a respondent has

violated the Fair Housing Act’s

prohibition against sexual harassment.

67668 Federal Register / Vol. 65, No. 219 / Monday, November 13, 2000 / Proposed Rules

(Harris, 510 U.S. 17 (1993)) Evidence of

psychological harm may be considered

in determining the proper amount of

any money damages to which an

aggrieved person may be entitled in

compensation for emotional distress

suffered.

Findings and Certifications

Executive Order 12866

The Office of Management and Budget

(OMB) reviewed this rule under

Executive Order 12866, Regulatory

Planning and Review, and determined

that this rule is a ‘‘significant regulatory

action’’ as defined in section 3(f) of the

Order (although not economically

significant, as provided in section 3(f)(1)

of the Order). Any changes made in this

proposed rule subsequent to its

submission to OMB are identified in the

docket file, which is available for public

inspection between 7:30 a.m. and 5:30

p.m. in the Office of the Rules Docket

Clerk, Office of General Counsel, Room

1026, Department of Housing and Urban

Development, 451 Seventh Street, SW.,

Washington, DC.

Regulatory Flexibility Act

The Secretary, in accordance with the

Regulatory Flexibility Act (5 U.S.C.

605(b)), has reviewed this proposed rule

before publication and by approving it

certifies that this rule would not have a

significant economic impact on a

substantial number of small entities.

This proposed rule would address

sexual harassment in a housing or

residential real estate-related transaction

environment as a form of discrimination

based on sex and a violation of the Fair

Housing Act.

Environmental Impact

In accordance with 24 CFR 50.19(c)(3)

of HUD’s regulations, this proposed rule

would set forth fair housing standards,

and therefore is categorically excluded

from the requirements of the National

Environmental Policy Act of 1969 (42

U.S.C. 4321–4347).

Executive Order 13132, Federalism

This rule does not have Federalism

implications and does not impose

substantial direct compliance costs on

State and local governments or preempt

State law within the meaning of

Executive Order 13132.

Unfunded Mandates Reform Act

Title II of the Unfunded Mandates

Reform Act 1995 (Pub. L. 104–4;

approved March 22, 1995) (UMRA)

establishes requirements for Federal

agencies to assess the effects of their

regulatory actions on State, local, and

tribal governments, and on the private

sector. This rule would not impose any

Federal mandates on any State, local, or

tribal government, or on the private

sector, within the meaning of the

UMRA.

Catalog of Federal Domestic Assistance

The Catalog of Federal Domestic

Assistance number is 14.400.

List of Subjects in 24 CFR Part 100

Aged, Fair Housing, Individuals with

disabilities, Mortgages, Reporting and

recordkeeping requirements.

Accordingly, 24 CFR part 100 is

proposed to be amended as follows:

PART 100—DISCRIMINATORY

CONDUCT UNDER THE FAIR HOUSING

ACT

1. The authority citation for 24 CFR

part 100 continues to read as follows:

Authority: 42 U.S.C. 3535(d), 3600–3620.

§ 100.65 Discrimination in terms,

conditions and privileges and in services

and facilities.

2. Section 100.65 is amended by

removing paragraph (b)(5).

Subpart G—Prohibited Sexual

Harassment

3. In part 100, a new subpart G that

consists of new § 100.500 is added to

read as follows:

§ 100.500 Prohibited sexual harassment.

(a) Sexual harassment can violate the

prohibitions against discrimination on

the basis of sex found in sections 804(a),

804(b), 804(c), 805, or 806 of the Act.

Sexual harassment can also violate

section 818 of the Act. There are two

types of actionable sexual harassment

claims:

(1) Quid pro quo. Unwelcome sexual

advances, requests for sexual favors, and

other verbal or physical conduct of a

sexual nature constitute sexual

harassment when submission to the

conduct, either explicitly or implicitly,

is made a term or condition relating to

the sale or rental of dwellings, the

provision of benefits or services in

connection therewith, or the availability

of residential real estate-related

transactions.

(2) Hostile environment. Unwelcome

sexual advances, requests for sexual

favors, and other verbal or physical

conduct constitute sexual harassment

when the conduct has the effect of

creating an environment which a

reasonable person in the aggrieved

person’s position would consider

intimidating, hostile, offensive, or

otherwise significantly less desirable in

connection with the sale or rental of

dwellings, the provision of benefits or

services in connection therewith, and

the availability of residential real estaterelated transactions. Proof of an adverse

action is not necessary to create an

actionable hostile environment claim.

(b) Totality of the circumstances.

Whether any particular conduct

constitutes sexual harassment will

depend upon the totality of the

circumstances, including the nature of

the conduct and the context in which

the incident(s) occurred. Critical factors

to examine include, but are not limited

to, the context, nature, severity, scope,

frequency, duration, and location of the

incidents, as well as the identity,

number, relative ages and relationships

of the persons involved. A single

incident of conduct may constitute

hostile environment sexual harassment.

(c) Unwelcome conduct. Unwelcome

verbal conduct may include, but is not

limited to, sexual epithets. Unwelcome

physical conduct may include, but is

not limited to, contact with an intimate

body part.

(d) Liability. (1) A person is

responsible for his or her acts.

(2) A person is vicariously liable to a

victimized individual for sexual

harassment by his or her agents.

(3) With respect to liability for sexual

harassment by a third party, a person is

responsible for acts of sexual

harassment where the person, or his or

her agents, knew or should have known

of the third party’s conduct and did not

take immediate and appropriate

corrective action and had a duty to do

so.

(e) Other related conduct. When a

housing-related opportunity or benefit is

granted because of an individual’s

submission to sexual advances or

requests for sexual favors, a person may

be held liable by other individuals who

were qualified for and had a reasonable

expectation of receiving the opportunity

or benefit, but were denied.

(f) Evidence of psychological harm.

Evidence relating to the relative

mildness or severity of an aggrieved

person’s psychological harm from such

conduct is not relevant to a

determination of whether a respondent

violated the Act, but such evidence will

be considered in determining the proper

amount of any money damages to which

an aggrieved person may be entitled in

compensation for emotional distress

suffered.

Dated: August 21, 2000.

Eva M. Plaza,

Assistant Secretary for Fair Housing and

Equal Opportunity.

[FR Doc. 00–28892 Filed 11–9–00; 8:45 am]

BILLING CODE 4210–28–P