Court Analyzes Prospective Tenant’s Sexual Harassment Claim

In a recent ruling, New Jersey’s Appellate Division recognized that the same basic legal principles that apply to sexual harassment claims in employment under the New Jersey Law Against Discrimination (“LAD”) also apply to sexual harassment claims involving housing discrimination under the LAD.  The LAD is a law that prohibits discrimination in the context of both employment and housing.

Leasing company can be liable for sexual harassment against prospective tenant.In November 2019, Sira Traore attempted to lease an apartment for her family and financial assistance from Fairview Homes Preservation, L.P. (“Fairview).  She met with Ricardo Mendoza, who was an employee of Related Management Company, L.P. (“Related”), a company that manages and leases apartments on behalf of Fairview.

Ms. Traore claims that when she met with Mr. Mendoza he touched her and pressured her to go to his hotel room to have sex with him in exchange for him providing her a lease for an apartment lease and the housing assistance she was seeking.  Ms. Traore did not agree to have sex with Mr. Mendoza, and claims that as a result she did not receive a lease or housing assistance.  Ms. Traore recorded her conversation with Mr. Mendoza using her cell phone.

Ms. Traore filed a lawsuit in which she alleges Fairview and Related sexually harassed her in violation of the LAD.  She also asserts that Fairview and Related each aided and abetted the sexual harassment.

Fairview and Related filed a motion to dismiss, which the trial court granted.  Ms. Traore filed an appeal.

On November 22, 2023, in an unpublished opinion, Traore v. Fairview Homes Preservation, L.P., the Appellate Division ruled that Ms. Traore can pursue her LAD claim against Related, but not against Fairview.

The Appellate Division recognized that no previous New Jersey appellate court has determined if or when the LAD deems an employer liable for sexually harassing a third party in connection with a housing transaction.  However, it relied on case law establishing when an employer can be liable for sexual harassment an employee.

Applying that body of law, the Court concluded that Related could be liable for Mr. Mendoza sexually harassing Ms. Traore because her allegations support the conclusion that Mr. Mendoza touched her and made a quid pro quo offer that it would lease her an apartment and provide financial assistance in exchange for sex, and that offer was intended to benefit Related by leasing one of Fairview’s apartment to Ms. Mendoza.  In other words, Related could be held liable for the sexual harassment because Mr. Mendoza was acting on its behalf when he harassed Ms. Traore.

Similarly, the Appellate Division concluded that Related could be vicariously liable for Mr. Mendoza’s sexual harassment because he harassed her in his capacity as Related’s manager and as part of his effort to find tenants for Related’s benefit.

In contrast, the Appellate Division affirmed the lower court’s dismissal of Ms. Trarore’s claims against Fairview.  First, it noted that Mr. Mendoza was an employee of Fairview, and thus Fairview could not be liable for his actions as his employer.  The Court explained that under limited circumstances a company can be liable for harassment committed by one of its independent contractors, but only if:

  1. It controlled the way the work is performed;
  2. The work was a nuisance per se; or
  3. The company knowingly hired an incompetent contractor.

Since there were no facts to support any of those factors applying to Fairview, the Appellate concluded that it was proper for the lower court to dismiss the claims against Fairview.

With respect to Ms. Traore aiding and abetting claims against Fairview and Related, the Appellate Division explained that such a claim requires proof of “active and purposeful conduct” by the defendant.  However, Ms. Traore did not even claim Fairview or Related did anything to actively or purposefully encourage Mr. Mendoza to sexually harass her.  Accordingly, the Appellate Division affirmed the dismissal of that claim.

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