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New Texas Law Expands Employee Rights and Employer Liability for Sexual Harassment Claims
Thursday, September 2, 2021

Total Planetary Alignment. Halley’s Comet. A Full Solar Eclipse. Texas Enacting Heightened Employee Protections Beyond Federal Law.

What are “things that rarely happen in your lifetime?”

In Texas, the general rule is that employee-facing legal protections overlap with—and extend no further than—its federal counterparts. But newly-enacted state legislation concerning workplace sexual harassment has bucked that trend.

On September 1, 2021 new laws took effect that will expand employee rights, as well as employer and individual liability, for claims of sexual harassment in the workplace. Specifically, S.B. 45 (codified as Section 21.141 of the Texas Labor Code) made three key revisions to preexisting state law concerning sexual harassment.

First, the new law revised the meaning of a qualifying “employer.” Under the old statute, liability for workplace sexual harassment applied only to employers having 15 or more employees for at least 20 weeks in the preceding calendar year. But the updated statute now covers employers having only one or more employees. To that end, virtually all Texas employers are within the statute’s reach.[1]

Second, S.B. 45 expands liability to individuals who act “directly in the interest of an employer in relation to an employee.” The upshot of this revision is that individual persons acting as supervisors, managers, owners, agents, contractors, or (potentially) non-supervisory employees could find themselves personally liable under the new state statute. Consequently, for essentially the first time in Texas’s history, individuals may find themselves as named defendants in workplace sexual harassment litigation.

Third, the revised statute also increases the duty of employers to investigate and remedy claims of sexual harassment. Previously—and analogous to federal law—Texas employers could bring an affirmative defense to liability if they took “prompt remedial action” in response to a sexual harassment complaint.[2] But the statute’s revised language appears to heighten that standard. Specifically, S.B. 45 states, in part, that an employer acts unlawfully:

[I]f sexual harassment of an employee occurs and the employer or the employer’s agents or supervisor (1) know or should have known that the conduct constituting sexual harassment was occurring; and (2) fail to take immediate and appropriate corrective action.

While the new language has not been tested, plaintiffs’ lawyers will no doubt argue that the phrase “immediate and appropriate” creates extra temporal urgency on a defendant employer to act, in order to successfully invoke the defense.

Finally, but importantly, accompanying legislation also expanded the limitations period in which employees may file a claim. Specifically, H.B. 21 lengthens the statutory period for employees to file a sexual harassment claim to 300 days from the date of the alleged harassment. Previously, employees were required to file a harassment/discrimination charge with the Texas Workforce Commission (“TWC”) within 180 days from the event(s). Effectively, this change brings the filing period for state claims in line with its federal counterpart of 300 days.[3]

All of the above-referenced changes apply only to claims based on conduct that occurs on or after September 1, 2021.

Three Key Takeaways for Employers:

  1. Know your exposure. As of September 1, 2021, essentially every business or employer in Texas falls within the ambit of the new harassment statute. If you have one employee, you are a potential defendant.

  2. Act accordingly. Related to point “1”, employers who previously overlooked harassment policies, procedures, and training must act quickly to implement necessary procedures. Outside counsel can play a vital role in this process. Crafting effective handbooks, holding trainings, implementing policies, and conducting thorough investigations may allow employers to avoid claims or otherwise assert defenses to liability.

  3. Alert supervisory employees. Supervisors, managers, and employees (whether or not in positions of authority) could face individual liability under the revised statute. To that end, and accompanying point “2”, employers should ensure their personnel understand they may be found personally liable for engaging in workplace sexual harassment—or failing to report the same.

FOOTNOTES

[1] To be clear, these modifications apply only to sexual harassment claims—not other forms of statutorily-prohibited discrimination.

[2] Known as a Faragher-Ellerth Defense, after two 1998 United States Supreme Court decisions. Faragher v. City of Boca Raton, 524 U.S. 775, 118 S.Ct. 2275, 141 L.Ed.2d 662 (1998); Burlington Industries, Inc. v. Ellerth, 524 U.S. 742, 118 S.Ct. 2257, 141 L.Ed.2d 633 (1998).

[3] Again, this expanded limitations period applies only to charges of sexual harassment.

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