Some news reports have mischaracterized the effect of a recent change to the National Association of REALTORS® (NAR) Code of Ethics regarding hate speech on real estate brokers linked to violence at the U.S. Capitol on Jan. 6, says Illinois REALTORS® General Counsel and Vice President of Legal Services Betsy Urbance.

Urbance and Walker R. Lawrence, partner at Levin Ginsburg, clarify the rights of real estate agents and the brokerages they work for in the Chicago Agent Magazine article, “Can Agents Be Terminated For Any Reason?” They note that agents are usually independent contractors, not employees.

Read Urbance’s full comment on the issue below:

Recently, we have seen media coverage regarding two matters pertaining to our industry. Unfortunately, erroneously addressing these two issues together can cause confusion.

    1. The first one involves a real estate broker participating in the group that “stormed” the U.S. Capitol in Washington, D.C.
    2. The second is directed at a change to the REALTOR® Code of Ethics which has recently been amended making it a violation of the REALTOR® Code to use targeted or weaponized hate speech against members of protected classes (race, color, religion, sex, handicap, familial status, national origin, sexual orientation, or gender identity).

With regard to recent activities at the U.S. Capitol, Illinois REALTORS® echoes the sentiments and comments of National Association of REALTORS® President Charlie Oppler, and denounces the violence we witnessed in Washington, D.C., on Jan. 6 as an assault on our nation’s centuries-old observance of peaceful protests and the peaceful transfer of power.

Regarding questions about a real estate broker’s participation in the events at the U.S. Capitol, and whether they should be fired and/or lose their real estate licenses; answers will depend upon the specific facts of each case. For purposes of their hiring and firing, these matters will be governed by the terms of the contractual agreement between the sponsoring brokerage company and the licensee. Typically, the contract defines an independent contractor relationship between the broker and their company.

Both the company and the broker are contractually bound to the other and it is common that one can terminate the relationship with or without cause depending on specific contract provisions. The brokerage company also has written policies and procedures to which the affiliated licensee must adhere. Breaches of company policy, procedure or contractual obligation can all be grounds for termination. Criminal charges can be grounds for termination, and some criminal convictions can be grounds for real estate license termination. Specific facts must be addressed in the context of the applicable contracts, policies and laws.

In addition, regarding the broker’s real estate license, the Illinois Department of Financial and Professional Regulation is the state agency in charge of administering the provisions of the Illinois Real Estate License Act including issuing licenses and imposing discipline when necessary. This agency has a process in place to determine when and if the License Act has been violated and to assess penalties or fines, up to and including revocation of one’s license. Certain criminal convictions are grounds for license revocation, subject to the administrative process involving a complaint, a right to a hearing and a conclusion as to discipline.

Next, as has been recently published, the National Association of REALTORS®, a voluntary trade association to which many real estate licensees choose to belong, recently amended its Code of Ethics. As stated, REALTORS® choose whether to join and in so doing, obligate themselves to the high standards of this Code. The amendment makes it a breach of the Code for REALTORS® to attack specific protected classes (cited above) using harassing language, hate speech, epithets, or slurs. Allegations of violations are subject to a strict enforcement procedure which includes substantial due process for the accused.

Neither the National Association of REALTORS®, Illinois REALTORS® nor any local association of REALTORS® issues or administers real estate licenses. They are voluntary trade associations which do require a properly sponsored and active real estate license as a condition of membership.

The “U.S. Capitol” question involves whether there was criminal behavior and application of laws prohibiting such action; while the second involves ethical questions governed by a voluntary trade association and a specific requirement to refrain from using weaponized hate speech against members of protected classes.

It is important to distinguish the difference between the situations and to assess individual facts of any case on its own merits.