If you’re a real estate broker, there’s a high chance you’re managing a culturally diverse team of real estate agents. As of the 2018 Census, 60% of the U.S. population was non-Hispanic white while 40% was from other ethnic and racial backgrounds.
When managing a diverse team, there are some best practices you can implement to ensure your real estate brokerage stays out of legal trouble.
Understand the Value of a Diverse Team
There is great value in having a diverse team. It leads to diverse perspectives and different approaches. Having a culturally diverse team can help bridge language barriers, allowing you to better communicate with your target market. When your team is representative of the community where you work, you can gain valuable consumer insights that can give your brokerage a positive edge.
Know Your Responsibilities and the Law
The first step to avoiding a lawsuit is knowing your responsibilities and the law. Under Federal law in the United States, it is illegal under Title VII of the Civil Rights Act of 1964 for employers to discriminate against applicants and employees on the basis or color, race, sex, religion or national origin. Employers are also prohibited from retaliating against any applicants or employees who “assert his or her rights under the law”.
If you’re a private employer with 15 employees or more, Title VII applies to you. If you have less than 15 employees or your real estate agents are independent contractors, Title VII does not apply. However, you still must comply with state anti-discrimination laws.
In California, the Department of Fair Employment and Housing is responsible for enforcing anti-discrimination laws that protect job applicants and employees against bias and discrimination in the workplace.
The Fair Employment and Housing Act applies to both private and public employers, labor organizations and employment agencies. Under the Act, it is illegal for employers of five or more employees to discriminate against job applicants and employees because of a “protected category.” It is also illegal to retaliate against them for asserting their rights by law. Protected categories include race, color, ancestry, national origin, religion, and creed.
The law prohibits discrimination against a person on the basis of race or culture in: job advertisements, applicant screening and interviews, hiring, transferring, promoting, or terminating employees. You can also not discriminate with working conditions, compensation, or participation in training opportunities.
Get Your HR Policies In Order
It’s good practice to ensure you have human resources (HR) policies in your real estate brokerage. You want to ensure your expectations are clearly communicated to all of your team about acceptable behaviors — and procedures for grievances and complaints.
There are three key policies you need in place in regards to cultural diversity:
- Workplace bullying policy
- Anti-discrimination policy
- Grievance policy
In 2017, The Workplace Bullying Institute estimated that some 61% of employees in the United States are aware of abusive conduct in the workplace. A further 19% have experienced it.
A workplace bullying policy will outline your expectations for your team. It’s designed to protect your staff against repeated threats, abusive conduct, intimidating behavior or work interference.
An anti-discrimination policy will outline to your team the law, and their legal obligations not to discriminate against their fellow team members on the basis or culture, race, etc.
Your grievance policy should give your team clear guidance as to the channels available for them to submit a grievance, and how grievances will be handled in your real estate brokerage.
Ensure Your Team is Adequately Trained
Putting a policy framework in place is a positive step. But it’s not useful unless your team is aware of and trained in all of your company policies. You should include policies in your team inductions and staff meetings, and undertake regular team training.
External training through the National Association of REALTORS ® is also available. This training addresses the topic of diversity, as well as fair housing, so your team will learn skills useful in dealing with a diverse cultural community.
Check that Your Real Estate Insurance Coverage Is Adequate
If a team member sues you for discrimination, you could be liable for damages, back pay, attorney’s fees and court costs. As a business owner, you should have Employment Practices Liability Insurance (EPLI), as well as a Business Owner’s Policy.
What if a client sues you for discrimination, because you or one of your team haven’t acted in accordance with the law? You could face even more financial penalties, along with irreparable damage to your professional reputation and the image of your business.
Your Errors and Omissions insurance for your real estate office should include coverage for Fair Housing/Discrimination.
CRES can customize an insurance package for your real estate business, and do an “insurance check-up” to help determine exactly what you need. (View our Insurance Checklist for Real Estate Offices.)
Contact CRES at 800-880-2747 for a confidential discussion. We’ve been tailoring insurance packages for real estate offices for more than 20 years.
An additional benefit is that with CRES E&O + ClaimPrevent®, you’ll also have access to professional legal assistance from highly qualified attorneys 7 days a week.