Small Texas Employers Newly Liable for Sexual Harassment

Texas employers who have less than 15 employees are no longer protected from sexual harassment claims under the small employer exception. Senate Bill 45, signed by Governor Abbott on May 30, 2021, changes the standard definition of employer in the Labor Code for sexual harassment complaints from “employs fifteen or more employees” to “employs one or more employees”.

This is a major change for small businesses in Texas. It overturns a long-time affirmative defense that many small businesses have relied on to avoid litigation without really worrying about improving their behavior.

New Texas Sexual Harassment Law

Both the federal discrimination law, Title VII, and the Texas discrimination law, Labor Code chapter 21, have excepted small business from any liability for employment actions taken in whole or in part on the basis of sex, religion, age, disability, etc. While the 15-employees or more exception still applies to all of those other categories for the time being, preventing sexual harassment has received a new treatment by the Texas Legislature and, as of September 1, applies to every Texas employer, regardless of employee headcount.

In addition, Governor Abbott signed a companion bill, House Bill 21, on June 7, 2021, that extends the time for filing a sexual harassment claim under §21.141 from 180 days to 300 days after the last harassing act occurred. So now, any Texas employee claiming that they have been sexually harassed in any workplace will have ten months instead of six months to complain to the Texas Workforce Commission’s Civil Rights Division.

“Sex” includes Sexual Orientation and Gender Identity

Here is an interesting twist to this legislation. Last year, the U.S. Supreme Court ruled that the word “sex” in Title VII’s discrimination prohibitions includes sexual orientation and gender identity. Bostock v. Clayton County, 590 U.S. __ (2020). Recently, a Texas Court of Appeals addressed the issue of whether Bostock applies to Texas Labor Code Chapter 21, which bans discrimination in Texas “because of sex.” Tarrant Cnty Coll. Dist. v. Sims, No. 05-20-00351-CV (Tex. App—Dallas, Mar. 10, 2021).

The state appeals court in Dallas held that, in light of the U.S. Supreme Court’s decision in Bostock, they were compelled to read Chapter 21’s ban on sex discrimination “as prohibiting discrimination based on an individual’s status as a homosexual or transgender person.” It is no stretch to apply the Dallas court’s reasoning to sexual harassment, which is just a type of sex discrimination.

Small Businesses Need New Policies

With that background, even the smallest Texas businesses need to make sure they are not allowing any employee or customer to harass another coworker based on that coworker’s sex, sexual orientation or gender identity. While some courts may rule down the road that is not what the Texas Legislature meant to do in its ultra-conservative 2021 legislative session, you do not want your small business to be the test case on Texas’ new sexual harassment law.

Most small employers do not even have Equal Employment Opportunity language or Sexual Harassment policies in their employee policy manuals. That will have to change before September 1, 2021, when SB 45 goes into effect as Tex. Labor Code §21.141.

The new law only applies to harassment in a small business that occurs after September 1, 2021, so if you are a small business owner, now is the time to clean up your employees’ language and offensive behavior (and your own, if any). 

There are other preventative steps every Texas employer needs to take besides just adding a written policy.

Steps for Any Size Employer to Prevent SOGI Sexual Harassment

The steps you need to take to prevent “traditional” sexual harassment, which most often involves sexual propositioning of a woman or the creation of a hostile working environment based on a person’s gender, are well-documented in my blog and many other places.

So let’s instead focus on what you need to do to prevent a sexual harassment claim on the basis of sexual orientation or gender identity (“SOGI”). I covered the basic rules for avoiding discrimination against LGBT employees in my blog when the Bostock decision was published last year.

Newer guidance was provided on June 15, 2021, the one-year anniversary of the Bostock decision, when the Equal Employment Opportunity Commission addressed these specifics which will help all employers avoid hostile environment sexual harassment claims in the future. The EEOC has also provided a fact sheet that is very direct in its instructions on how to prevent SOGI harassment:

  • Do not criticize, humiliate, slur, make jokes, or otherwise indicate hostility to an employee’s sexual orientation or gender identity. This also means that “ye shall not proselytize” an LGBT employee to try to convert them to your belief system.
  • Use whatever name and pronouns that the employee asks you to use. Occasional, accidental misuse of a pronoun or name can be excused, but as with all harassment, you only get one or two mulligans before your repeated behavior will be considered frequent and/or severe enough to constitute a hostile environment.
  • All men, including transgender men, must be allowed to use the men’s restroom and other sex-segregated facilities such as locker rooms. All women, including transgender women, must be allowed to use the women’s restroom and all other sex-segregated facilities such as locker rooms.
  • Do not prohibit or criticize a transgender person for dressing and presenting as the gender to which that employee currently identifies. You cannot have any rules in your workplace that require an employee to present themselves as the gender which they were identified at birth.
  • Do not keep LGBT employees out of public-facing positions because you believe that your customers will be more comfortable. All employment discrimination laws are written on the basis that your first duty is to protect your employees from discrimination, not protect your customer’s preferences.
  • Whether or not you know an employee’s sexual orientation, do not comment upon, make derogatory remarks or otherwise attempt to humiliate an employee because that employee does not conform to stereotypical gender norms.

Application to Religious Entities

The new Texas sexual harassment law does not make an exception for religious organizations. In the case of a male preacher sexually harassing a female secretarial employee, I doubt any court will make an exception either, even in the smallest churches.

But as to enforcing the sexual harassment laws against churches in the case of SOGI harassment, the EEOC has taken this position (and I expect Texas courts will also):

Title VII allows “religious organizations” and “religious educational institutions” (those organizations whose purpose and character are primarily religious) to hire and employ people who share their own religion (in other words, it is not unlawful religious discrimination for a qualifying employer to limit hiring in this way). Courts also apply a “ministerial exception” that bars certain employment discrimination claims by the employees of religious institutions because those employees perform vital religious duties at the core of the mission of the religious institution. Courts and the EEOC consider and apply, on a case by case basis, any religious defenses to discrimination claims, under Title VII and other applicable laws.

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