The Texas Legislature made notable “employee-friendly” changes to the sexual harassment law that applies to employers doing business in Texas. Over the summer, Texas Governor Abbott signed two bills (SB 45 and HB 21) that significantly expand the protection of employees asserting sexual harassment under the Texas Labor Code. These changes became effective on September 1, 2021.
Over the past few years, we have seen the “Me Too” and other anti-sexual-harassment movements, which focus on the experience of individuals who have been impacted by sexual harassment and workplace offenders. Although Texas is generally considered an “employer-friendly” state, these movements compelled the Texas Legislature to revise the sexual harassment law to favor employees who file a claim alleging sexual harassment.
The Texas sexual harassment law is now different in four areas. First, the Texas Labor Code previously aligned with federal law that requires an employer to have 15 or more employees for a plaintiff to sue for sexual harassment. Now, the definition of “employer” in Texas has expanded to include those who employ one or more employees. Thus, all employers are now vulnerable to sexual harassment claims under Texas law regardless of the number of employees. This change will force small businesses with at least one employee to ramp up their compliance efforts, since their employees can now file sexual-harassment claims against them.
Second, the definition of “employer” now allows a plaintiff to sue an individual who “acts directly in the interests of an employer in relation to an employee.” Under federal law in the Fifth Circuit, the law clearly provides that there is no individual liability for sexual harassment claims and that a plaintiff may only properly sue their employer, not individuals.
Prior to the September 1, 2021 change, Texas courts aligned with this standard. Now, this major change opens the door to individual liability in sexual-harassment lawsuits, which means a human-resources director, manager, or supervisor may now be subject to individual liability in a sexual-harassment lawsuit, even if they did not engage in the alleged sexual-harassment conduct.
Allowing plaintiffs to sue management as part of their sexual-harassment lawsuit is a seismic change. We will likely see plaintiffs suing multiple individuals in addition to the employer, because the new law does not place any parameters on how many individuals may be sued. On the defense side, the new law will require employers to revisit their policies on providing legal counsel to their employees and whether they will pay the resulting legal fees. Additionally, employers should put their supervisors and managers on notice that their own conduct may personally implicate them in a sexual-harassment lawsuit.
Third, the Texas Labor Code now imposes a greater burden on employers with respect to sexual harassment. Before the new law, the Texas Labor Code provided a possible defense to an employer if it took “prompt remedial action” to stop the harassment, which is a common standard defined by many courts that was relatively easy for employers to follow. Now, the new sexual-harassment law states that an employer commits an unlawful employment practice if an employer knew or should have known about the sexual harassment and the employer failed “to take immediate and appropriate corrective action.” However, the new standard for Texas sexual-harassment cases creates ambiguity as the statute does not define how “immediate” an employer must act and what “appropriate correction action” is required. The courts will be tasked with defining the scope of this new standard.
Lastly, the Legislature expanded the statute of limitations for employees to file their sexual-harassment claims. Before filing a sexual-harassment lawsuit, Texas law previously required an employee to file a charge of discrimination with the Texas Workforce Commission (TWC) within 180 days of the alleged unlawful employment practice. As of September 1, 2021, an employee is allowed to file their charge with the TWC within 300 days after the date of the alleged sexual harassment. This statute-of-limitation change now aligns the Texas Labor Code with federal law.
It will be interesting to see how courts interpret these four changes to the Texas sexual-harassment law. These changes broaden the protection of employees in the sexual-harassment arena, aligning with the legislative intent. The new law will also force employers of all sizes to revisit their sexual-harassment compliance efforts, and it will require smaller employers with less than 15 employees to implement policies and standards not previously required.