California Law Also Prohibits Sexual Harassment In Business Relationships


January 10, 2008
Everyone knows that state and federal laws prohibit sexual harassment in the workplace. Can sexual harassment claims arise out of business relationships unrelated to employment? In California, the answer is yes.

California Civil Code section 51.9 provides that a person is liable for sexual harassment arising out of business, service or professional relationships. In order to recover damages for sexual harassment in such circumstances, the claimant must establish all of the following:

1. A business, service or professional relationship exists between the plaintiff and defendant.

2. The defendant has made sexual advances, solicitations, sexual requests, demands for sexual compliance or engaged in other verbal, visual or physical conduct of a sexual nature that was unwelcome and either pervasive or severe.

3. There is an inability by the plaintiff to terminate the relationship easily.

4. The plaintiff has suffered or will suffer economic loss or other disadvantage or personal injury, such as emotional distress.

The statute lists examples of the types of business relationships covered by section 51.9. However, this list is not exhaustive. The examples listed include physicians, dentists, attorneys, social workers, real estate agents, accountants, teachers, certain bank employees, landlords and other relationships that are "substantially similar" to any of those specifically mentioned.

Section 51.9 was first enacted in 1994 but has not been the subject of significant litigation in the appellate courts. However, the California Court of Appeal in Los Angeles did address section 51.9 in a decision issued this past September entitled Hughes v. Pair1 In that case, Suzan Hughes sued Christopher Pair alleging that Pair had sexually harassed her in violation of section 51.9. Hughes was the widow of Mark Hughes, the founder of the Herbalife company. Pair was one of three trustees of Mark’s estate. The trust was established to administer Mark’s estate, with the 14 year old son of Mark and Suzan as a beneficiary. Suzan had been totally excluded from Mark’s estate. Nonetheless, Suzan had interactions with Pair in dealing with issues concerning the son and his support from the trust. The court opinion indicates that the relationship between Suzan and Pair was somewhat stormy and contentious.

Several weeks after a disagreement between Suzan and the trust over rental of a beach house, Suzan and Pair had two interactions on the same day. First, during a telephone conversation regarding an upcoming museum event, Suzan complained about the trust’s decision on the beach house. Pair stated, "you know how much I love Alex (the son) and you in that special way." As the discussion of the beach house issue continued, Pair added that he could be persuaded "to give more time if you would be nice to me." When Suzan told Pair that "talking to me this way is crazy," Pair replied, 'How crazy do you want to get?" Pair gave Suzan his number and told her to call him if she changed her mind.

Later that day, Suzan and her son attended the museum event mentioned during the phone call and encountered Pair and his nine year old son. Pair made one comment to her indicating that he was "going to get [her] on her knees" and he then used a four letter sexual expletive. The statement was made in close proximity to both children.

Suzan then brought the legal action alleging a violation of Civil Code section 51.9 plus other claims. Pair’s motion for summary judgment was granted and then affirmed on appeal. In determining whether Pair had sexually harassed Suzan, the Court used the same considerations utilized to determine whether sexual harassment in employment has occurred pursuant to the California Fair Employment and Housing Act. The Court found that Pair had not engaged in "quid pro quo" sexual harassment of Suzan and that he had not engaged in "pervasive or severe" conduct because both incidents occurred on the same day and the language used was ambiguous (i.e. whether the use of the sexual expletive was intended in a literal or figurative manner.)

The Court was also required to address whether the relationship between Suzan and Pair was covered by section 51.9. The Code language clearly includes a "trustee." However, Pair argued that Suzan did not have standing under section 51.9 because it was her son, not she, who was the beneficiary of the trust. The Court rejected this argument holding that, even though she was not a beneficiary, "her relationship with Pair falls within the Legislature’s intended reach of section 51.9" because Suzan was the mother and guardian of the child and in those capacities was obligated to deal with the trust on her son’s behalf.

Section 51.9 as originally enacted in 1994 covered only specific relationships. However, amendments in 1996 expanded the scope of covered business relationships. Thus, even though the Code section includes a detailed list of covered business, service or professional relationships, the addition of the language "including but not limited to" indicated a legislative intent that the listing was intended to include examples only and not be all inclusive. Further, the statute includes any "relationship that is substantially similar" to any of those listed.

A prevailing plaintiff under section 51.9 would be eligible for an award of damages by either a judge or jury and to attorneys fees pursuant to Civil Code section 52(b).

It should also be noted that section 51.9 prohibits sexual harassment by either side in a business relationship. Thus, for example, the professional could be sued by a client or the client could be sued by the professional, depending upon the facts. It should also be noted that the elements of a claim under section 51.9 differ somewhat from those required for a claim of sexual harassment in the employment relationship. Here, for example, the plaintiff must establish that there is "an inability" for him or her to terminate the relationship easily. There is no such requirement for a claim of harassment in the employment relationship.

Government Code section 12950.1 already requires organizations with 50 or more employees to provide training and education regarding sexual harassment. The training program should include a segment involving Civil Code section 51.9 in light of the reality that sexual harassment litigation can be brought by customers, clients and other persons involved in business relationships, and not only by employees.

This article was written by Jeffrey Freedman, an attorney with the labor and employment law firm of Liebert Cassidy Whitmore (LCW). Mr. Freedman is a Partner in the Los Angeles office and can be reached at (310) 981-2000 or at jfreedman@lcwlegal.com. For more information regarding the information above or our firm please visit our website at www.lcwlegal.com, or contact one of our offices below.

Liebert Cassidy Whitmore publishes this article as a service to our clients and other friends for informational purposes only. It is not intended to be used as a substitute for specific legal advice or opinions and the transmission of this information is not intended to create an attorney-client relationship between sender and receiver. You should not act upon this information without seeking professional counsel.

1(2007) 154 Cal.App.4th 1469.

To Contact Liebert Cassidy Whitmore:
Los Angeles 310.981.2000 | Fresno 559.256.7800 | San Francisco 415.512.3000 | San Diego 619.481.5900 info@lcwlegal.com
© 2014 Liebert Cassidy Whitmore