The effects of the #MeToo movement for employers continue with Governor Abbott recently signing two new bills into law (effective September 1, 2021) that greatly amplify legal protections against sexual harassment. One bill extends the statute of limitations for sexual harassment claims from 180 days to 300 days. The other opens the door for small employers, and even individual supervisors and coworkers, to be held liable for sexual harassment. Also, Texas employers must now take “immediate and appropriate corrective action” to avoid liability for sexual harassment. We explain these new laws in more detail below, and discuss steps Texas employers may want to consider before the new laws go into effect.
Statute of limitations lengthened for sexual harassment claims (House Bill 21)
Currently, employees must file a charge of discrimination with the Texas Workforce Commission within 180 days of the alleged harassing conduct. House Bill 21, which Governor Abbott signed into law on June 9, 2021, lengthens the statute of limitations for filing sexual harassment claims from 180 days to 300 days from the date of the alleged harassment. The longer limitations period applies only to sexual harassment claims based on conduct that occurs on or after September 1, 2021. The current 180 day statute of limitations remains unchanged for other types of alleged discrimination (e.g., based on race, age, etc.).
Because the statute of limitations under federal law for sexual harassment claims is 300 days, plaintiffs who miss the 180-day deadline under Texas law were typically only able to pursue their sexual harassment claims in federal court (assuming, of course, they initiated legal proceedings within the 300-day federal deadline). Beginning this fall, those plaintiffs will be able to pursue such claims in either federal or state court.
Broader definition of “employer” for sexual harassment claims (Senate Bill 45)
Currently, only employers with 15 or more employees can be liable for sexual harassment under Texas law. Senate Bill 45, which Governor Abbott signed into law on May 30, 2021, adds Section 21.141 to the Texas Labor Code. That new section applies specifically to sexual harassment claims. The statutory definition of “employer” under Section 21.141 includes anyone “who: (A) employs one or more employees; or (B) acts directly in the interest of an employer in relation to an employee” (emphasis added). Like House Bill 21, the newly-expanded definition of “employer” provided by Section 21.141 does not apply to other forms of alleged discrimination or harassment.
Regarding sexual harassment claims, however, anyone in Texas who has at least one employee can now be held liable for sexual harassment. As worded, the newly-expanded definition also encompasses supervisors, coworkers and, potentially, customers, vendors, contractors or other third parties who interact with workers formally employed by someone else.
Thus, beginning this fall, supervisors, coworkers and other individuals can be held personally liable for engaging in or failing to stop sexual harassment. Plaintiff attorneys likely will also start naming supervisors, coworkers and others as individual defendants to make it more difficult for out-of-state employers to remove sexual harassment claims to federal court based on diversity jurisdiction.
Heightened duty on employers to remedy sexual harassment (Senate Bill 45)
Currently, employers can be liable for sexual harassment committed by a coworker if the employer knew or should have known of the harassment and failed to take adequate remedial action. Under newly-added Section 21.141 of the Texas Labor Code, an employer commits an “unlawful employment practice” if “sexual harassment of an employee occurs 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” (emphasis added).
The new law does not define what “immediate and appropriate corrective action” means. Plaintiff attorneys may try to argue “immediate” means instantaneously. Defense attorneys would argue instead that “immediate” means as promptly as realistically plausible under the circumstances. Texas state courts will likely allow employers some breathing room on timing as long as the employer demonstrates it took the complaint seriously, conducted a prompt and diligent investigation, and decided what to do soon after completing the investigation; but it remains uncertain until the courts address the new law.
Practical takeaways for Texas employers
The new laws likely will create a great deal of uncertainty and potential exposure for Texas employers. Many small employers in Texas might not even have an employee handbook or policy manual. Beginning September 1, 2021, however, all Texas employers—regardless of headcount—will need to act swiftly when sexual harassment is reported, and take adequate remedial action to stop it. Employers may want to spend the next few months reviewing, updating, or (if necessary) implementing anti-harassment policies that provide a complaint-reporting procedure and a framework for promptly investigating reported sexual harassment. By this fall, Texas employers will be expected to have appropriate policies in place that ensure:
- Employees know who to complain to if they are experiencing sexual harassment;
- Sexual harassment complaints are taken seriously and immediately investigated;
- Corrective action, if needed, is taken promptly (and discretely); and,
- The remedy is sufficient to stop the harassment and prevent it from reoccurring.
Anti-harassment training for employees at all levels is recommended. Texas employers should also have policies in place to ensure employees are not retaliated against for complaining about sexual harassment or participating in a subsequent investigation. Proactive companies should act now to fix or implement appropriate sexual harassment policies, practices and procedures.
If you have any questions about these new laws, or would like any guidance, assistance or advice regarding your organization’s anti-harassment or other equal employment opportunity policies, practices or procedures, please contact a Reed Smith attorney.