In a surprise move for a typically employer-friendly state, Governor Greg Abbott signed two significant amendments into Texas law on June 9 governing sexual harassment: S.B. 45 and H.B. 21. Together, they have become known jointly as the “new Texas Sexual Harassment Law.”
Effective September 1, 2021, Texas law on sexual harassment officially became more protective of employees than federal law. Indeed, the Texas Sexual Harassment Law brings major changes for all employers, but particularly for small employers who could not previously be sued due to their size.
Potentially, even individual managers could be held personally liable for failure to comply with the heightened remediation obligations the new law places on employers. Finally, employees will now have 300 days, rather than 180 days, from the alleged harassing conduct to file a claim with the Texas Workforce Commission.
Expansion of Definition of “Employer”
The most significant change concerns small employers.
Previously, employers with fewer than 15 employers could not be sued for gender discrimination based on sexual harassment under Texas law due to the law’s headcount thresholds. The new state sexual harassment laws define an employer as a person or entity who employs even one other person. Therefore, where an employee of a small employer previously had no remedy under state or federal law, employees can now pursue sexual harassment claims against their employers under state law.
Employees of employers with fewer than 15 employees are still ineligible to pursue sexual harassment claims under Title VII, the applicable federal law. The change is a rare example of Texas law outstripping federal law in protections for employees.
Heightened Obligations for Employers and Personal Liability
Prior to September 1, an employer was previously liable for sexual harassment if it knew or should have known that sexual harassment was occurring and failed to take “prompt remedial action.” The new Texas Sexual Harassment Law amends and elevates the standard to require “immediate and appropriate corrective action” from employers that know or should know about sexual harassment occurring in their workplaces.
Although the law does not define “immediate or corrective action,” it is generally accepted that the legislature intended to force employers to do more to cure bad behavior in their offices. The change in the law’s language from “prompt” to “immediate” suggests the legislature intended for Courts reviewing sexual harassment claims to focus heavily on whether the employer remediates the harassing conduct as soon as possible. However, it is safe to say that this element of the new Texas Sexual Harassment Law will be heavily litigated.
The other change of the law on which the courts will need to provide additional guidance is whether managers can be held personally liable for failing to cure sexual harassment on their watch. Previously, it was almost impossible to hold managers and executives personally responsible for the bad acts of others simply for failing to cure the bad behavior. However, the text now includes anyone who “acts directly in the interests of the employer” in its definition of “employer.” It remains to be seen whether courts will interpret the text to impose personal liability on managers, but employer should anticipate that Plaintiffs’ attorneys will begin pursuing a broader slate of defendants that includes more than the corporate entity that directly employs a claimant.
Extension of the Statute of Limitations
The new laws extend the statute of limitations to file a discrimination claim based on sexual harassment with the Texas Workforce Commission from 180 days to 300 days, which also has the effect of extending the deadline to file a federal claim with the Equal Employment Opportunity Commission (EEOC). Effective Sept. 1, claimants may pursue a discrimination claim based on sexual harassment under either federal law (provided the employee works for an employer with more than 15 employees) or Texas law for 300 days from the alleged harassing conduct. Claims made on other bases will remain subject to the 180-day statute of limitations.
Recommendations for Employers
Everyone can agree that workplaces should be free from harassment and discrimination. However, there are inherent risks to businesses any time the law expands the scope of potential liability. Now, more than ever, employers should commit themselves to reviewing their personnel policies — especially those related to reporting harassing or discriminatory behavior — and conducting robust sexual harassment training annually.
Many small employers may not already have these important compliance measures in place because they were previously shielded from liability for sexual harassment due to their size. Notably, despite the many additional requirements the new amendments place on employers, they do not require employers to conduct anti-harassment training.
However, given that all employers — both the corporate entities and individual managers — may now be liable for sexual harassment, employers should treat the expenses associated with training, deterrence and compliance as merely another cost of business.
Litigation of claims under the new Texas Sexual Harassment Law is certain to be much more costly.
Kelly Robreno Koster is a shareholder in the litigation division of Munsch Hardt Kopf & Harr focusing on employment litigation and compliance. With both in-house and big law experience, she offers employers extensive experience in cases related to discrimination, termination, restrictive covenants, the Fair Labor Standards Act (FLSA), Americans with Disabilities Act (ADA), Family and Medical Leave Act (FMLA) and statutory employee benefits. Within the past year, Kelly has developed a specialty in Covid-19-related counseling and provides advice to employers seeking guidance on personnel matters related to the ongoing pandemic.