While the ongoing pandemic and vaccine mandates have grabbed the employment law headlines this summer, Texas employers should be aware that Senate Bill 45 and House Bill 21, which amend the Texas Labor Code and expand employee protections and employer liability for sexual harassment claims, go into effect on September 1, 2021. Together, these bills make three substantial changes to the Texas Labor Code:
First, in the subchapter on sexual harassment, the Senate Bill now defines “employer” as: “a person who: (A) employs one or more employees; or (B) acts directly in the interests of an employer in relation to an employee.” Significantly, this changes the threshold for coverage from fifteen (15) employees to one (1) employee on sexual harassment claims. This is a major departure in Texas labor and employment law. It also likely means that supervisors, co-workers, and even third-parties associated with a particular employer may be named as individual defendants in complaints of sexual harassment if the “person” “acts directly in the interest of an employer in relation to an employee.” This is also a major change in Texas law and opens the door (wide) to the concept of individual, supervisor liability on a sexual harassment claim – a concept that does not currently exist under Title VII. Following this change to its logical conclusion, this will almost certainly lead to more sexual harassment claims filed against small employers and individual managers and supervisors in Texas. It may also limit certain out-of-state employers’ ability to remove sexual harassment claims under Texas law to federal court in cases where an in-state manager or supervisor is also sued.
Second, the Senate Bill provides that an “unlawful employment practice” occurs if there is sexual harassment of an employee “and the employer or employer’s agents or supervisors: (1) know or should have known that the conduct constituting sexual harassment was occurring; and (2) fail to take immediate and appropriate corrective action.” The reference to “immediate and appropriate corrective action” places a heightened burden on employers in “immediate[ly]” (not “promptly”) responding to complaints of sexual harassment and undertaking an “appropriate” investigation once the employer has knowledge of the complaint. Employers should also expect their decisions concerning corrective action following a complaint of sexual harassment to be more closely scrutinized for timeliness and appropriateness under this heightened standard.
Third, the House Bill lengthens the statute of limitations under state law for filing a charge of sexual harassment from 180 days to 300 days from the date the alleged harassment occurred. This change only applies to alleged harassment that occurs on or after September 1, 2021.
The Bottom Line for Texas Employers: Texas employers should be aware of these significant changes in Texas employment law. On the checklist — employers should promptly review their sexual harassment and investigation policies to tailor the language in Senate Bill 45. Employers should also make sure they have a robust complaint and investigatory process in place that is easily accessed for the purpose of making a complaint and quickly initiated for purposes of investigating a complaint. Further, after an investigation is complete, it will be more important than ever for employers to document and be able to articulate the “immediate and appropriate” action taken in response to the complaint. Finally, employers should expect more sexual harassment claims against managers and supervisors until the contours of individual, supervisor liability are better defined.