By: Tracy M. Evans, Esq., Associate, Saxon Gilmore & Carraway, P.A.

Tevans2-cropped-sEarlier this month, a proposed consent decree was submitted by the parties in a sexual harassment case pending in the Middle District of North Carolina, which serves as a crucial reminder to the importance of instituting, maintaining, and enforcing polices against sexual harassment in the work place. The complaint, filed in the case of Sellers v. Southeastern Community and Family Services, Inc., alleged several violations of state law, and violations of the Fair Housing Act (“FHA”) against two male employees of a Section 8 administrator, Southeastern Community and Family Services, Inc. (“SCFS”). More specifically, the complaint alleged that the two employees made unwelcome sexual comments and advances to plaintiffs who were female applicants and participants in the Section 8 voucher program; touched and exposed themselves to plaintiffs; conditioned or offered housing benefits in exchange for sexual acts; and took or threatened adverse actions with respect to housing benefits to women who would not perform sexual favors. As alleged in the complaint, these actions constituted violations of several FHA sections because the employees’ conduct indicates a preference, limitation, or discrimination based on sex, and interfered with the plaintiffs’ full enjoyment of their rights under the FHA.

The complaint also asserted liability against SCFS alleging that SCFS hired the two offending employees, knew or should have known of their conduct, and failed to take preventative or corrective action, despite having the authority to do so.

The consent decree entered into by the parties does not contain any admission of liability, but it does constitute the largest settlement of a pattern and practice sexual harassment case brought under the FHA. SCFS has agreed to pay $1.7 million to the plaintiffs, and an additional $1 million into a fund for other aggrieved individuals. SCFS has also agreed to pay a $25,000 civil penalty. The two individual employees have agreed to pay civil penalties in the amounts of $1,000 and $1,500. In addition to the monetary relief, the consent decree contains injunctive relief, enjoining the two individual employees from participating in any way in Section 8 voucher program responsibilities, any management responsibilities at any residential property, or engaging in any management responsibilities that could potentially involve personal contact with tenants or prospective tenants.

The consent decree also imposes new restrictions that SCFS and its employees must meet in order to conduct inspections under the Section 8 voucher program. The consent decree also requires SCFS to retain an independent manager, approved by the Department of Justice, to manage SCFS’s entire Section 8 program. SCFS also must create a written anti-discrimination policy and a policy prohibiting sexual harassment of clients.

This case serves as a reminder to employers to ensure that proper sexual harassment and anti-discrimination policies are in place and enforced to protect against potential liability for an employee’s actions. It is imperative that all employees are made aware of these policies, and trained on how to identify potential harassment as early as possible. Taking steps to train employees and enforcing the policies and procedures will help shield employers from costly liability.


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