Seyfarth Synopsis: California has long prohibited sexual harassment in various types of relationships, including employment relationships, and in other professional and business relationships which have elements of power imbalance. Although the right to sue for sexual harassment in business and professional relationships has been part of the fabric of California law for decades, in recent years, the legislature has taken steps to highlight those rights by enacting new legislation and clarifying the types of relationships from which actionable sexual harassment may arise.

Sexual Harassment Prohibited in Non-Employment Relationships

In November 2018, California amended and clarified Civil Code section 51.9 with Senate Bill 224, which states that a “person” (which includes business entities) is liable for sexual harassment when a claimant can prove the following:

  1. There is a business, service, or professional relationship between the plaintiff and defendant or the defendant holds himself or herself out as being able to help the plaintiff establish a business, service, or professional relationship with the defendant or a third party.
  2. Defendant made sexual advances, solicitations, sexual requests, demands for sexual compliance, or engaged in verbal, visual, or physical conduct of a sexual nature or of a hostile nature based on gender—which were unwelcome, persuasive, or severe.
  3. Plaintiff suffered or will suffer economic loss or a personal injury including but not limited to emotional distress or violation of a statutory or constitutional right due to defendant’s actions.

When Civil Code section 51.9 was initially enacted, it specifically stated that the professional and business relationships included physicians, psychotherapists, dentists, attorneys, social workers, real estate agents, appraisers, investors, accountants, bankers, building contractors, executors, landlords, teachers, and other relationships that were substantially similar. The idea was to protect individuals from sexual harassment in relationships where there may not be an employment relationship, but there is an inherent relationship of trust and a power imbalance, and to provide an accountability mechanism.

Now, as you might imagine, the broad “substantially similar” language has been a focus of many court cases over recent years and thus, the California legislature made an effort to clarify the intent of and motivation for the law with SB 224. Smart California businesses should take heed of this recent change.

Motivations for the Change

In explaining the need for SB 224, the drafter (Senator Hannah-Beth Jackson) cited high profile incidents, no doubt pointing towards the #MeToo movement, as the reasons for the bill’s enactment. The legislature highlighted that specific relationships were expressly identified in the bill to act as a “greater deterrent against this type of discriminatory behavior,” to end the “boy’s club” mentality, and to put individuals who may “wield so much power and influence” on notice that they would be held liable for sexual harassment—regardless of the existence of an employment relationship. This legislation thus puts burdens on many companies that are greatly expanded to cover how their employees may interact with any number of non-company individuals.

What Other Professional Relationships Are Covered?

Since passing SB 224, developing law has expanded on the types of roles that may be subject to potential liability for sexual harassment. Some examples of the “other relationships” which may give rise to sexual harassment claims under this provision include:

  • A physician who provides the vital service of healthcare and who patients trust with their bodies
  • Producers who are in a position of power and influence over an actor’s career even in the absence of an actual employment relationship (as highlighted by the #MeToo movement)
  • Coaches who are in a service relationship with their athletes, namely providing guidance and overall structure, or who may control an athlete’s prospects (i.e. they can choose to prioritize, play, or cut a player without much say by the athlete)

Ultimately, Civil Code section 51.9 was written to be intentionally broad to cover as many non-employment relationships as possible, and create an accountability mechanism for sexual harassment.

What Should My Business Do?

California courts have held that employers can be vicariously liable for the sexual harassment perpetrated by their employees who may be engaged in these business and professional relationships on their behalf, even with non-employee individuals. Astute employers should therefore listen for complaints about their employees from customers, students, athletes, applicants, and the like, and employers should act on those complaints by investigating, and if necessary, coaching or reprimanding based on the alleged behavior.

Businesses who employ individuals that provide professional services should also consider implementing a training program for employees that goes beyond the prohibition of sexual harassment of co-workers, and provide real-life examples of what Civil Code section 51.9 means in terms of employee’s own personal liability as well as liability of the company.

Companies should also review their policies prohibiting harassment to make sure its policy prohibits sexual harassment in business and professional relationships that employees may be engaged in on behalf of the company as well.

Workplace Solutions

Understanding and navigating the laws prohibiting sexual harassment outside of the employment relationship context is critical for legal compliance and company culture. For help with prohibiting sexual harassment in business and professional relationships within your Company, and mitigating risk in non-employment relationships, please reach out to your favorite Seyfarthian.

Edited by Coby Turner