New Texas Law Expands Potential Liability for Sexual Harassment

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In Short

The Situation: Texas, a traditionally employer-friendly state that seldom imposes more stringent requirements on employers than federal law, recently passed a sexual harassment law that includes protections for employees and potential liabilities for employers beyond those provided by federal law.

The Result: The Texas law is more stringent than Title VII in that employers of all sizes are now subject to potential liability for sexual harassment, and managers and supervisors can be held individually liable, too. Moreover, the new law requires employers to take "immediate and appropriate corrective action" to remedy sexual harassment it knows or should have known about—a departure from Title VII's affirmative defense requiring "prompt remedial action" under the same circumstances. Finally, employees now have 300 days to file a charge of discrimination alleging sexual harassment with the Texas Workforce Commission.

Looking Ahead: Texas employers should review and, if necessary, revise their sexual harassment policies and procedures for reporting and investigating sexual harassment complaints to comply with the new law. Employers should consider emphasizing the prospect of supervisor liability in management training and prepare the organization to act "immediately" to respond to potential sexual harassment.

Texas, a traditionally employer-friendly state that seldom imposes requirements on employers that are more stringent than federal law, recently passed a new sexual harassment law that does just that. The law, which took effect on September 1, 2021, expands protections for Texas employees and potential liability for Texas employers for workplace sexual harassment. This Commentary addresses the provisions of the new law that relate to private employers but not the provisions applicable to government officials.

What the New Law Says

The new law expands the definition of "employer," for purposes of sexual harassment only, to include a person who: (i) employs one or more employees; or (ii) acts directly in the interests of an employer in relation to an employee. Tex. Lab. Code § 21.141. This definition is broader than the definition of "employer" under Title VII in two respects. First, Title VII's prohibition against sexual harassment applies only to employers with 15 or more employees. Second, unlike under federal law, employees may now file lawsuits under Texas law against supervisors or other individuals who act "directly in the interests" of the employer.

The new statute does not define "in the interests" of the employer, but Texas courts may interpret the phrase consistent with jurisprudence under the FLSA and FMLA, two federal statutes that use the same phrase in their definitions of "employer." Under the FLSA and FMLA, a number of factors are relevant in determining who is an employer, including whether the putative employer has the power to hire, fire, and make compensation decisions about the specific employee(s).

Additionally, the new law makes it unlawful for employers to fail to take "immediate and appropriate corrective action" once they know, or should have known, of sexual harassment. Tex. Lab. Code § 21.142 (emphasis added). Until now, Texas law mirrored federal law in holding employers liable where they knew or should have known of sexual harassment by a coworker and failed to take "prompt, remedial action." See Gulf States Toyota, Inc. v. Morgan, 89 S.W.3d 766, 770–71 (Tex. App.—Houston [1st] 2002, no pet.); see also Jones v. Flagship Int'l, 793 F.2d 714, 719–20 (5th Cir. 1986). An employer's duty to take "prompt, remedial action" to avoid liability for coworker harassment is not explicitly stated in Title VII but is instead a creature of case law, and its application in a particular case varies based on the facts and circumstances at play:

What is appropriate remedial action will necessarily depend on the particular facts of the case—the severity and persistence of the harassment, and the effectiveness of any initial remedial steps…. [N]ot every response by an employer will be sufficient to discharge its legal duty. Rather, the employer may be liable despite having taken remedial steps if the plaintiff can establish that the employer's response was not "reasonably calculated" to halt the harassment.

Taylor v. Seton Healthcare, No. A-10-CA-650 LY, 2012 WL 13680, at *15 (W.D. Tex. Jan. 3, 2012) (quoting Waltman v. International Paper Co., 875 F.2d 468, 479 (5th Cir. 1989)); see also Skidmore v. Precision Printing and Pkg., Inc., 188 F.3d 606, 616 (5th Cir. 1999) (finding that employer took prompt, remedial action where employer instructed the alleged harasser to leave the plaintiff alone and transferred the harasser to a new shift, at which point the harassment stopped). Here, unlike Title VII, the Texas Labor Code now explicitly places an affirmative obligation on employers to take "immediate and appropriate corrective action" with respect to sexual harassment it knows (or should know) about. The statute does not define the phrase or provide further guidance as to what it means. Thus, it remains to be seen whether there is any meaningful distinction between the interpretation of "prompt, remedial action" under federal law and "immediate and appropriate corrective action" under the new Texas law.

And finally, the new law extends the time period within which employees must file charges of discrimination with the Texas Workforce Commission alleging sexual harassment from 180 days to 300 days. See Tex. Lab. Code § 21.201(g). This additional 120 days applies only to sexual harassment claims, not all discrimination claims. See Tex. Lab. Code § 21.202(a). This brings Texas in line with the federal rule, which gives employees 300 days from the date of harassment to file a charge with the EEOC in states that have a state or local agency that enforces a law prohibiting employment discrimination on the same basis.

What This Means for Employers

The new law provides an opportunity for employers to revisit and potentially revise their sexual harassment policies. Regardless of whether any revisions or modifications are necessary, employers should consider training management employees on what to do when they learn of sexual harassment, including their duty to investigate and/or responsibility to report complaints to appropriate personnel. Likewise, employees should be fully aware of the policies and reporting procedures so that they can quickly report any complaints. Once a complaint is received, it is now more important than ever for Texas employers to act "immediately" to appropriately investigate any such complaints and to take corrective action when needed.

Five Key Takeaways

  1. Texas employers with one or more employees are now subject to sexual harassment lawsuits.
  2. Individual supervisors and managers may be liable for sexual harassment, or for failing to take immediate corrective action.
  3. Texas employees now have 300 days to file a charge of discrimination with the Texas Workforce Commission.
  4. Employers must take "immediate and appropriate corrective action" once learning of any sexual harassment.
  5. Employers should ensure they have clear, written policies addressing sexual harassment, and all employees should be trained on such policies.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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