Employer-Friendly Texas Enacts Two New Laws to Expand Protections for Employees Asserting Sexual Harassment Claims

Texas is historically very employer-friendly, but recently Texas Governor Greg Abbott signed two new bills into law that expand protections for employees who assert sexual harassment claims under the Texas Labor Code. Both SB 45 and HB 21 became effective on September 1, 2021.

The new laws expand the definition of “employer.” Now, all employers may be held liable for sexual harassment claims asserted under the Texas Labor Code, even if they have a single employee. Previously, only employers with 15 or more employees were subject to such claims.

The new laws further expand the definition of “employer” to include, for purposes of sexual harassment claims, any person who “acts directly in the interests of an employer in relation to an employee” and knew or “should have known” about the ongoing sexual harassment in the workplace. As a result, supervisors, managers, human resources professionals, and similar employees may be named individually as defendants in an employee’s sexual harassment complaint and could face personal liability. This is a departure from previous Texas law and also a move away from the trend in other states limiting the definition of “employer” to specifically exclude personal liability against managers and supervisors.

The new laws also impose a heightened—albeit vague–standard for employers (including their “agents or supervisors”) to respond after they knew or should have known that sexual harassment occurred. An employer must now take “immediate and appropriate corrective action,” which is a departure from the former standard that required “prompt remedial action.” There is no guidance about what may constitute “immediate” as compared to “prompt” action. This standard will likely develop over time as claims are litigated.

One other noteworthy change is that employees now have 300 days—rather than 180—to file a charge of discrimination based on sexual harassment with the Texas Workforce Commission. The new 300-day deadline is effective for any conduct that occurred on or after September 1, 2021, and applies only to claims for sexual harassment. Claims related to any other alleged unlawful employment practices must still be filed within 180 days of the alleged action.

The practical effects of the new laws could include a limit on an employer’s ability to remove a sexual harassment claim filed in Texas state court to federal court, which is often viewed as a more favorable venue to employers. For example, out-of-state employers often remove sexual harassment claims filed in state court to federal court based on diversity of jurisdiction. Under the new law, if a Texas-based manager, supervisor, or other employee is added to the lawsuit, the case may not be eligible for removal. There may also be an uptick in the number of sexual harassment cases that go to trial in Texas state court because the issues of whether an employer or manager “knew” or “should have known” and whether they acted “immediately” pose fact questions that a jury must decide.

Texas employers should also consider reviewing and revising their employment policies and employee handbooks and may want to require more training on sexual harassment prevention and reporting.

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