It would be tacky to call it a cause for celebration, but California real estate agents can be gratified that the State Supreme Court has upheld the dismissal of Hughes v. Pair, a sexual harassment case. Why should real estate professionals care about sexual harassment suits? Because the laws involved apply to them.

Most of those in the real estate business should know by now that both federal and state laws banning sexual harassment in the workplace apply to real estate brokerages. Many real estate people in supervisory positions have received required training in this regard. Brokers of both large and small offices know that they need to maintain anti-harassment rules governing interactions between agents and agents, agents and staff, and staff with staff.

What is less known, but is fraught with potential liability, is that California law also prohibits sexual harassment in certain business relationships outside the workplace. According to California Civil Code 51.9, among the persons to whom this prohibition applies are a "…real estate agent, real estate appraiser…loan officer…escrow officer…landlord or property manager," if there is a "business, service, or professional relationship between the plaintiff and defendant."

It is because of this applicability of sexual harassment laws to business and professional relationships that California real estate brokers and the attorneys for California real estate brokerages have had an interest in Hughes v. Pair. This was not a case involving real estate licensees; but it had elements that are easily seen to be analogous to situations and events that could occur in a brokerage or property management context.

The facts of the case might evoke a certain fascination, but they were not pretty. Suzan and Mark Hughes had divorced in 1998. In 2001, Mr. Hughes died, leaving some $350 million in trust for the sole benefit of his son, for whom Suzan was guardian. The trust was administered by three trustees, one of whom was Christopher Pair.

In June of 2005, Ms. Hughes requested that, on behalf of the son, the trustees provide $160,000 rent for the two-month rental of a Malibu beach house. The trustees rejected the request and agreed only to one month's rent for $80,000. A few days later, Ms. Hughes received a phone call from Mr. Pair. During their conversation, he called her "sweetie" and "honey" and at one point told her he thought of her "in a special way, if you know what I mean." When Ms. Hughes queried him regarding the one-month payment allowed by the trustees, Mr. Pair "suggested that he could be persuaded to cast his vote for an additional month if [she] would be 'nice' to him." He told her to "call me when you're ready to give me what I want."

Later, that evening at a social event, Mr. Pair said to Ms. Hughes "I'll get you on your knees eventually. I'm going to ____ you one way or the other." Subsequently Ms. Hughes filed a complaint alleging infliction of emotional distress as well as sexual harassment under Civil Code section 51.9.

Pair's behavior was clearly rude and boorish. Moreover, we acknowledge that the plaintiff was a sympathetic character, like a mama bear protecting her cub. What parent wouldn't seek to keep their child from being deprived of a second $80,000 month at a Malibu beach house? Nonetheless, setting manners and emotions aside, the Court had to decide whether or not Pair's behavior constituted actionable sexual harassment under Civil Code 51.9. Upholding an Appellate decision, the Supreme Court said, no, it wasn't sexual harassment.

The Court's reasoning drew heavily from the extensive case law regarding sexual harassment within the workplace. It noted that "the hostile work environment form of sexual harassment is actionable only when the harassing behavior is pervasive or severe." "There is no recovery for harassment that is occasional, isolated, sporadic, or trivial." (To be sure, it acknowledged that a single incident "involving physical violence or the threat thereof" could qualify as severe.)

On a variety of grounds, including the legislative history of section 51.9, the Supreme Court held that the section should be understood in the same way as the prohibitions against sexual harassment within the workplace. The harassing conduct "must consist of more than a few isolated incidents" and that standard had not been met in Hughes v. Pair. Moreover, there had been no threat of violence. Nor was there any evidence of retaliation for Ms. Hughes non-cooperation. At most there were only "unfulfilled threats." Hence, the case was dismissed.

It would be naïve to think that real estate agents and property managers never make unwanted and offensive sexually-tinged comments to clients and customers. Shame on them. And no one should take the Hughes v. Pair ruling as an entitlement to engage in such behavior. On the other hand, it would seem good to know that, to be sustained, the serious charge of sexual harassment will have to rest on more than occasional or isolated misbehavior.

Published: February 2, 2010

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Bob Hunt is a former director of the National Association of Realtors and is author of the recently published book, "Real Estate the Ethical Way." A graduate of Princeton with a master's degree from UCLA in philosophy, Hunt has served as a U.S. Marine, Realtor association president in South Orange County, and director of the California Association of Realtors, and is an award-winning Realtor. Contact Bob at .