New Texas Law Expands Potential Liability for 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.