Texas Expands Coverage and Penalties for Sexual Harassment in the Workplace: Individual Liability Now Available

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Executive Summary

Over 600 new laws went into effect on September 1, 2021 in Texas. Importantly, three (Senate Bill No. 45, Senate Bill No. 282, the House Bill No. 21) drastically modified the well-established, employer-friendly framework governing sexual harassment claims brought in the Lone Star state. In particular, these changes include: (1) greater protection to individuals working for small employers not otherwise covered by anti-discrimination laws; (2) individual liability for sexual harassment; (3) expanded periods in which employees are allowed to file complaints with applicable federal and state enforcement agencies; and (4) a prohibition on using tax-payer funds to resolve sexual harassment claims against elected officials.

These changes not only significantly expand coverage for existing anti-discrimination laws but will also undoubtedly result in an increased number of sexual harassment claims and lawsuits brought against employers and members of management alike. As such, businesses are encouraged to review their current sexual harassment policies, practices, and training and, where appropriate, consult trusted employment counsel for further guidance.

Employer Coverage Expanded to Businesses with Even One Employee

Prior to September 1, an “employer” subject to the Texas Labor Code (as well as federal anti-discrimination laws) constituted an individual or entity employing at least 15 or more employees. Senate Bill 45, however, amended Chapter 21 of the Texas Labor Code with respect to sexual harassment claims with the addition of Subchapter C-1 – now defining an “employer” as any person who “employs one or more employees or acts directly in the interests of an employer in relation to an employee.” In other words, every business that employs at least one employee is now subject to the Texas Labor Code and, consequently, potentially liable for sexual harassment that employee experiences in the workplace.

Individuals Can Now Be Held Liable for Employee Sexual Harassment

Subchapter C-1 also provides for individual, managerial liability for sexual harassment claims. Subchapter C-1 provides that liability for sexual harassment may be attributable not only to the ultimate employer; it may also be attributable to the employers’ agents or supervisors if they “know or should have known that the conduct constituting sexual harassment was occurring and fail to take immediate and appropriate corrective action.”

As a principal matter, this change significantly alters the sexual harassment framework in Texas as supervisors and managers (under prior law) generally were not individually liable for claims (unless the manager or supervisor was directly involved in an assault or other tort-like conduct). Now, however, members of management who fail to take “immediate and appropriate corrective action” can be named – individually – as defendants in a subsequent lawsuit. Of course, what constitutes “immediate action” will need to be worked out by the courts. At a minimum, however, employers should instruct members of management to report harassment they witness to a member of human resources (or another designated group/person) as soon as is practicable to limit potential liability. Employers should also (in light of this change) consider conducting robust managerial training on sexual harassment in the very near future – even if they conducted training earlier in the year.

Plaintiffs Have More Time to Bring Claims

Prior to September 1, employees were required to file a charge of discrimination with the Texas Workforce Commission (TWC) or Equal Employment Opportunity Commission (EEOC) within 180 days of alleged sexual harassment. Failure to do so barred the employee from bringing a subsequent lawsuit against the employer. Now, employees have 300 days to file a claim with the TWC or EEOC. This change only applies to sexual harassment claims. Claimants alleging all other forms of unlawful employment practices are still subject to the 180-day limitations period.

Public Officers Cannot Use Taxpayer Dollars to Settle Sexual Harassment Claims

In addition to the newly added employee protections discussed above, under Senate Bill No. 282 taxpayer dollars in Texas can no longer be used or appropriated for purposes of resolving or settling sexual harassment claims brought against elected and/or appointed officials – including members of the executive, legislative and judicial branches of state government. Importantly, the prohibition applies both to the actual elected official (e.g., Governor, House Member, Judge, etc.) as well as any person appointed by the Governor to serve as a member of a department, commission, board, or any other office within the executive, legislative, or judicial branch of Texas government.

Bottom Line

September 1, 2021 marks a drastic change in Texas employment law. Employers are strongly encouraged to review their policies, procedures, and training surrounding sexual harassment in the workplace and, where appropriate, contact trusted employment counsel for further guidance.

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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