Joshua J. Borger
Partner, Berliner Cohen LLP
Email: Joshua.Borger@berliner.com
Boston College Law School; Newton MA
Josh practices commercial and civil litigation in a variety of areas, including unfair business practices, breach of contract, trademarks, trade secrets, fraud, employment, insurance coverage and litigation, Proposition 65, and general business litigation. In addition to his litigation work, Josh represents companies in nonlitigation matters, including employment matters and licensing agreements.
Many private organizations, including those in which people are essentially required to join for business purposes, will likely implement new policies regulating their members' online posts to curb the abundance of hate-filled rhetoric. However, there is a dearth of legal authority outlining the rights of both the organizations and their members in removing a member for statements made online. This article addresses these issues with emphasis on a new rule by the National Association of Realtors regulating online speech.
On Nov. 13, 2020, the board of directors for the National Association of Realtors approved a change to its Code of Ethics and Professional Standards Policies. The rule provides that realtors "must not use harassing speech, hate speech, epithets, or slurs based on race, color, religion, sex, handicap, familial status, national origin, sexual orientation, or gender identity." The rule does not limit when the conduct takes places. As worded, the rule prohibits such conduct whether the individual is working at that time as an agent/broker, sitting in a bar with friends on the weekend, or at home at night posting online. Per NAR, the rationale is that "[t]his proposed Standard of Practice directly flows from the requirement to not deny equal professional services or be parties to a plan to discriminate. Specifically, bias against protected classes revealed through the public posting of hate speech could result in REALTORS(r) not taking clients from certain protected classes or not treating them equally, which would lead to violations of the Fair Housing Act due to overt discrimination or disparate impact."
An agent/broker who is not a member of NAR may not have access to the MLS (multiple listing service) or access may be significantly harder. And, their job would be significantly harder if not impossible without such access. Unlike with other purely social groups, there is an economic necessity to joining NAR. The California Supreme Court has placed limits on the ability of such organizations, whose members are essentially required to join for economic reasons, to remove members.
In Pinsker v. Pac. Coast Soc. of Orthodontists, 12 Cal. 3d 541 (1974), the California Supreme Court set forth some standards for excluding or dismissing members of a limited category of private associations such as labor unions or professional and trade associations. Membership in these organizations differs from others because it is frequently an "economic necessity." Although not technically required, membership is a "practical necessity" since membership is necessary to achieve the highest economic advantages of the profession, and expulsion would deprive the member of educational, financial, and professional advantages. While the parameters are not clearly defined, the members have some due process rights. Pinsker v. Pac. Coast Soc. of Orthodontists, 1 Cal. 3d 160, 165 (1969) (holding that a dentist had a judicially enforceable right to have his application to the American Dental Association considered in a manner comporting with the fundamentals of due process, including the showing of cause for rejection). Giving their status, removal from these associations requires fair procedures, and the expulsion from the association cannot rest upon a rule that is substantively arbitrary or contrary to public policy.
There is little case law defining when the removal of a member is arbitrary or which "public policies" bind these organizations. The case law implies that the Constitution plays some role in defining these parameters, but the extent of which is unclear.
NAR certainly has a strong public policy argument. NAR reasons that "hate speech" may lead to agents/broker not taking minority clients which, in turn, would violate the Fair Housing Act. The courts afford these organizations great deference in establishing their rules. Since NAR can tether its rules to implementation of a federal act, the courts may be inclined to allow the rule to stand.
While the First Amendment does not apply to NAR since it is not a state actor, the case law implies that certain constitutional rights, including free speech, do apply to these private organizations in dismissing their members. See Mitchell v. Internat. Assn. of Machinists, 196 Cal. App. 2d 796, 804 (1961); Curran v. Mount Diablo Council of the Boy Scouts, 147 Cal. App. 3d 712, 723 (1983); Bernstein v. Alameda etc. Medical Assn., 139 Cal. App. 2d 241 (1956) (holding that a medical society could not lawfully expel a doctor for making disparaging statements about another doctor's professional work in the course of legal proceedings); Malibou Lake Mountain Club, Ltd. v. Roberson, 219 Cal. App. 2d 181 (1963) (concluding that a member of a corporation that owned mountain property was expelled for a reason that violated public policy; that is, the member's exercise of his right to free speech and to petition for redress of grievances).
NAR's new rule is problematic if the parameters of the First Amendment apply to determine whether a rule is arbitrary or contrary to public policy because it only applies to certain categories of people. In R. A. V. v. St. Paul, 505 U.S. 377 (1992), the U.S. Supreme Court held that the city of St. Paul's municipal ordinance banning hate speech was unconstitutional. The court reasoned that although fighting words are generally not protected by the First Amendment, the city's ordinance unconstitutionally engaged in viewpoint discrimination by prohibiting some topics but not others. Noting the ordinance outlawed fighting words "that insult, or provoke violence, 'on the basis of race, color, creed, religion, or gender,'" Id. at 391, the court determined that "[d]isplays containing abusive invective, no matter how vicious or severe, are permissible unless they are addressed to one of the specified disfavored topics. Those who wish to use 'fighting words' in connection with other ideas -- to express hostility, for example, on the basis of political affiliation, union membership, or homosexuality -- are not covered." Id.
Assuming arguendo that NAR can overcome the aforementioned issues, the next issue is whether the member's conduct rises to the level of "fighting words," which are not protected. Even if the First Amendment applied to NAR, there is no constitutional right to engage in hate speech. As stated, "fighting words" that are intended to insult or provoke violence are not protected. For example, imagine two people discussing the U.S. Supreme Court's case of Masterpiece Cakeshop v. Colorado Civil Rights Commission, in which a baker refused to bake a wedding cake for a same-sex marriage on the basis that he had to use his artistic skills to make an expressive statement inconsistent with his religious beliefs. A third party overhears their discussion and believes that one of the parties referred to homosexuals using a word with a negative connotation. The third party perceives it to be a slur against homosexuals, although the speaker did not intend it to be as such. NAR must draw the line between whether the member's speech amounted to "fighting words" or simply crass but protected speech.
The author finds that NAR's new rule will likely be upheld because there is a sufficient link between the online posts and potential violations of the Fair Housing Act. Other organizations whose members are also economically required to join may have a harder time tethering such a policy to a statute. As more private organizations implement similar rules governing conduct on the internet, the courts must define the "public policies" that bind these organizations.