On September 1, 2021, three major changes to the Texas Commission on Human Rights Act went into effect. These changes give those who have been the victims of sexual harassment in the workplace many more litigation options under Texas law. 

Previous Good Morning, HR guest attorney Jim Zadeh calls these changes “gold” for plaintiffs.

Today’s guest agrees that these changes will necessitate changes to policy and training by every employer in Texas, regardless of the number of employees. And individual supervisors or even coworkers will need to rethink their own potential liability when they become aware of workplace sexual harassment.

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Julie Ross

Julie is a partner in the law firm of Ross | Gannaway, PLLC. Her law practice is devoted solely to employment law, and she represents employers and management in both the public and private sector.

Julie’s practice emphasizes all aspects of employment law including assisting clients on FMLA, FLSA and ADA issues; assisting clients against claims such as wrongful discharge, employment discrimination and harassment under Title VII, ADA, ADEA and other employment statutes; training in all areas of employment law; and investigation of employee complaints.

Julie has a J.D. with honors from Texas Tech University and a B.B.A. in Accounting from the University of Texas.

Julie is a long-time member of FWHR and served on the board of directors as Legal and Legislative Director for many years.

Contact

JR@rossgannaway.law | 817-332-8509

Transcript

Julie Ross: And I think smaller groups are better, just because you can get a conversation going, people feel maybe freer to ask questions, and you get a lot of resistance to some of these things, and I think it’s important for employees to be able to vocalize that, so you can address their concerns, and kind of one on one to the extent you can. But I don’t know that training is really any different. I think training every year is important, and when I do my training, I tell folks, “Hey, I’m here for two hours or three hours max, and it’s really important that when I leave that this should just be the start of the conversation.”

[intro music]

Mike Coffey: Good Morning, HR. I’m Mike Coffey, and this is the podcast where I talk to business leaders about bringing people together to create value for shareholders, customers, and the community. Please follow, rate, and review Good Morning, HR on Apple Podcasts, Stitcher, Spotify, or wherever you get your podcast. You can also find us on Facebook, Instagram, YouTube, or at goodmorninghr.com.

During this year’s regular session, the Texas legislature passed sweeping changes to sexual harassment law in the state. Previous Good Morning, HR guest, attorney Jim Zadeh, calls these changes gold for plaintiffs.

Interestingly, these changes went largely unnoticed by the business community, and many small businesses are still unprepared for the law, which has already gone into effect effective September 1st.

My guest today is longtime friend, Julie Ross, a partner with the law firm, Ross Gannaway. Julie councils and when necessary, defends employers in all areas of employment law. Over the years, she’s helped more than one of our clients get their wagon out of the ditch.

Welcome to Good Morning, HR, Julie.

Julie Ross: Thanks, Mike. Glad to be here.

Mike Coffey: So, do you think these changes to Texas sexual harassment law are really gold to plaintiffs?

Julie Ross: I do.

Mike Coffey: Why?

Julie Ross: Unfortunately, for my clients, and actually our mutual friend, Jim Zadeh, sent me an email a couple weeks ago, basically thanking me in advance for all this extra business he’s going to have as a plaintiff’s lawyer suing my employer clients, because he knows that under this law, there’s really going to be, I believe, a boom in cases for sexual harassment.

Mike Coffey: So, what’s changed here?

Julie Ross: Well, it’s really this is huge news in employment law, and probably one of the biggest changes I’ve seen in my career. And there were I think almost 650 new Texas laws that went into effect on September 1st, and a handful of those make these big giant changes to the Texas Commission on Human Rights Act, or what we call the Texas Labor Code, and that’s the Texas version of Title VII.

And as of September 1st, the day we keep mentioning, that Texas employees now have more protection and rights under a new sexual harassment law than they did prior, whether it was under Texas law or federal law. And prior to September 1st, the Texas law on sexual harassment was pretty much identical to the federal law, and we all know that Texas has a reputation for being very employer friendly. So this is really a big surprise, because this law is not employer friendly.

So now as of September 1st, individuals and all Texas employers, even if the employer has only one employee, they’re now potentially liable for sexual harassment claims. So to kind of sum it up, now the Texas sexual harassment law is much tougher than it was before, and much more employee friendly than even federal law is.

Mike Coffey: So where the Title VII stuff applies to employers with more than 15 employees, this now just applies, and under state law, to everybody.

Julie Ross: And before this law, under state law, you also had to have 15 employees in order to get coverage, and so just for some sexual harassment, not for race, religion, color, age, or any of the other protected categories, but for sure for sexual harassment, you can have one employee, and you’re now covered.

Mike Coffey: Yeesh. So that’s, I mean, these are even domestic and household employers that have a problem, that could be at risk there.

Julie Ross: Correct. And you think a lot of these small employers, they don’t have an employee handbook. They don’t have a sexual harassment policy, because a lot of these are mom and pop. They’re just kind of doing their thing, not thinking about employment laws, and they could kind of skate under the old version of Texas law and still under federal law, but not anymore.

Mike Coffey: What about one of the things Jim mentioned was some was something about individual liability for managers under state law. How does that work now?

Julie Ross: Well, that’s huge, and I’ve actually been doing a whole lot of training for clients on that already. In the past, under both the way that Texas courts and federal courts looked at Title VII and the Texas Labor Code for sexual harassment, if an individual supervisor or an employee was a harasser, and the court found that there was sexual harassment, it was the employer who wrote that check, who if there was liability, it landed in the employer’s lap. Now under this new law, a supervisor or really anyone, it doesn’t have to be a supervisor, but anyone under this new expanded definition of employer can be liable, and personally, what we call personal or individually liable.

Julie Ross: So in the past, an employee could sue both the employer and the employee, but it would be the employer who ended up writing that check. Now, a wronged employee can sue both the employer and the individual supervisor, who either engaged in harassment, or who was aware of the conduct and failed to take immediate action.

Mike Coffey: Wow. That’s going to be…

Julie Ross: It’s big.

Mike Coffey: Yeah. I mean, if the cases are bonafide, maybe that’s a justified outcome, but I can see sorting out on the individual basis, who knew what when, and who should have taken action in an organization of any size, you could have a bunch of individual plaintiffs inside of an organization for one case.

Julie Ross: That’s correct. That’s correct. So under this Texas law, they’ve expanded the definition of employer, and now an employer is a person who employs one or more employees, or who acts directly in the interests of an employer in relation to an employee. So it’s not just supervisors and managers, potentially, and a lot of things you’ll read that says this law expands individual liability for supervisors and managers, but I think it’s actually far broader than that, because you could have someone in payroll who acts directly in the interest of the employer, and that person is not a supervisor. So I think now even coworkers can be personally liable under this new law, if they are harassers, or if they fail to take appropriate action, potentially.

Mike Coffey: And does an employer have any responsibility to defend their employees in a case like this, if a manager, or supervisor, or coworker is named?

Julie Ross: Well, I think in most cases kind of as it is under the current law, I mean, employers, they want to assert a vigorous defense. So they don’t want their supervisors to have engaged in this conduct, and they’re going to argue that the plaintiff couldn’t show that the conduct was unwelcome, or that it was offensive to them, and so forth.

But I think I can foresee situations where an employer is going to argue that a supervisor who engaged in sexual harassment was acting outside the scope and authority of their employment, and they’re going to kind of maybe divide and conquer. And I think it puts employers potentially in a real bind as versus their supervisors and managers.

Mike Coffey: Yeah. It could make them adversaries in the case. Right?

Julie Ross: Exactly.

Mike Coffey: I mean, oh, wow. That’s not where you want to be as an employer.

Julie Ross: No, no. So what I’ve been in this training, I’ve really been doing supervisory training, and really stressing that, first of all, obviously, don’t engage in sexual harassment, but that if you are a manager or a supervisor, and you’re made aware, or you observe that this is going on, I mean, your immediate response is to stop the bad conduct if it’s happening, you can see or hear it, but really you need to pick up the phone and call HR immediately, because liability, even if you aren’t the harasser, if a supervisor fails to take immediate and appropriate corrective action.

And by the way, that’s new terminology, immediate and appropriate corrective action. We’re used to prompt remedial action. So the Texas legislature used different terminology under this new sexual harassment law. So we don’t really know what’s the difference between prompt and immediate, but I would think that immediate means something quicker than prompt, and we’ll have to wait a while for there to be jury awards, court decisions to wind their way up through the appellate courts to kind of give us some more guidance.

But I think that probably a lot of this is in response to #metoo, and that we say, “Don’t do this. Don’t do that,” and people can still continue to do it. So maybe the Texas legislature thinks, “Hey, you know what? If we make people have to get out their own checkbook and write the check, that maybe that will finally get people’s attention, and they’ll stop engaging in this kind of conduct.”

Mike Coffey: But thinking about your typical employment investigation, especially if you’re using a third party outside to come in and do an investigation, prompt could be, “Yeah, I got this report in the HR office on Monday, and Tuesday morning, we called our outside council. We called Julie Ross, and arranged for her to come in, but she couldn’t come in til Thursday to start the investigation.” Is that immediate? I mean, is that going to pass that standard?

Julie Ross: In the real world, I think that that would… If somebody reports on Monday, and you’re starting investigation on Thursday, now, I think if we need to put somebody on the admin leave, and separate these two people, I think we need to do those things more immediately, but realistically, when you call an outside investigator, if they can jump on it on Thursday, that’s pretty good, but a lot of times it’s somebody in HR is out. They don’t get ahold. They play some telephone tag, and somebody is on vacation, or they’re involved in some big other thing that they can’t get back to. So I think our bench needs to be deeper. We need to have other people that we can call, because I think waiting two weeks is not going to be immediate.

And you think about what’s going on now with COVID. I mean, how many people are unavailable because of real life things, and are those going to be acceptable to a court that, “Oh, yeah, we tried. We really tried, but everybody was out with COVID, or they had to be quarantined.” I mean, does that mean we have to do our investigation remotely? We just don’t know the answer to those things, but, man, it’s going to be hugely challenging for employers. And again, to Jim Zadeh’s point, it’s going to be gold for plaintiffs, because those are exactly the kind of issue that we’re going to litigate. What is immediate?

Mike Coffey: Is it a big deal that that number, the days to file, went from 180 days to 300 for state court? Does that really matter much, or will that make a difference?

Julie Ross: Yeah, I mean, I think it does. I think a lot of times what I see is that there’s always a dual… not always, but dual filing. So if an aggrieved employee goes to the EEOC, they’ll usually check the box that it’s a dual filing from both state and in federal claims, but I think a lot of plaintiffs would and certainly their attorneys would prefer to be in state court. Things aren’t thrown out at the summary judgment stage like they are in federal court. I think we think of federal court as perhaps being more favorable to employers overall. So employers prefer to keep things in federal court or remove them to federal court.

Also, I think with this whole… We talked about immediate action. I think that may end up being a jury question, a fact question. And so again, another reason why these things won’t be thrown out on summary judgment. So I think that getting into state court is likely more advantageous from an employee’s point of view. And now, instead of having 180 days, they have 300. So before, if they’d missed their 180 days, they couldn’t follow through in state court, but they could still go to the EEOC. So now, they’ll have that option to file either or both in 300 days.

Mike Coffey: And so considering that term immediate, it’s really important that I’d guess that whoever takes that complaint in HR, or whoever it is, this is brought to the attention of the supervisor, manager, whoever it is, who becomes aware of it, needs to start documenting immediately everything that they’ve done, which is always good. We always tell them, but it sounds like now, if we’ve got this standard of immediate, we really need to show, “Hey, I reached out on this date to do this. I did this. I started some remedial action to try and investigate this and take appropriate steps.”

Julie Ross: Exactly. And we all know just in real life, whether it’s COVID or anything, supervisors and managers are busy, and they have a lot of things that they’re juggling. And so this has got to be something that takes absolute priority.

Mike Coffey: And let’s take a quick break.

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And now back to my conversation with Julie Ross.

Now, when we use sexual harassment, this sounds obvious, because it’s like pornography, we know it when we see it, or we know it when we look under our teenager’s bed, but define for me what sexual harassment is under the law?

Julie Ross: Well, the new Texas law defines what is sexual harassment, and really it’s the definition that we’re familiar with under Title VII, and it’s any unwelcome sexual advance, a request for sexual favor, or any other verbal or physical conduct of a sexual nature, if submission to that conduct is made a term or condition of the employee’s employment, or the employee is disciplined for submission to or rejection of the conduct, or the conduct unreasonably interferes with the employee’s work performance, or the conduct creates a hostile working environment. And we know that to be harassment, sexual harassment in this case, it has to be severe or pervasive, and so it’s kind of what’s that question? How much conduct has to be in that pile before it crosses over the line to be unlawful versus just perhaps a violation of policy, but not unlawful?

And again, those are the things that get litigated all the time, and I think now it’s more important than ever for employers to have what I call a zero-tolerance policy. They don’t ignore this. They don’t wait until it gets really bad. If they see it, if it’s going on in the workplace, if somebody complains about it, they’re going to take it seriously, and they’re going to respond immediately to the conduct, and take the steps appropriate and necessary to stop it.

Mike Coffey: Does this statute apply to both public and private employers, or is this just a private employer thing?

Julie Ross: Yes.

Mike Coffey: Oh, it does.

Julie Ross: Yep. Mm-hmm.

Mike Coffey: Okay. And there’s no sovereign immunity for individuals who happen to work for the government or anything?

Julie Ross: And in fact, there’s even another big change. This was under Senate Bill 282, that prohibits the use of public funds to settle or pay sexual harassment complaints against public officials or public employees.

Mike Coffey: Ooh. So if you’re a public employee, your employer can’t come to your rescue, and settle a deal, and say, “Hey, we’ll pay this out.”

Julie Ross: I guess not. Yeah. So I haven’t looked into that much, and luckily I haven’t had one of those issues pop up yet, but it really changes the landscape.

Mike Coffey: So let’s say I’m an employer, and I’m smart enough to be carrying employment practices liability insurance. If I get a claim like this, even under state law, will EPLI tend to cover me?

Julie Ross: I assume that the general answer that is, “Yes,” but sometimes those… And every policy is probably a little different. I’m no expert on insurance, but sometimes these policies don’t cover intentional acts. So sometimes we have sexual harassment that wasn’t intentional. It was just the stuff was going on, versus we have intentional conduct where we’re really trying to exchange sexual favors for things at work. So I think it’s important to pull out that policy, and read about what it covers, and does it cover individuals?

And I mentioned that I’ve been doing training for one of my clients. I’ve done about 15 sessions of training for this one client, and when I have just the supervisors, that’s the main question that they’re asking is, “If somebody just comes after me and makes a false claim, it means am I going to have to defend myself? Am I going to have to pay the lawyer?”

So these questions are… You don’t want your employees to leave or your supervisors leaving in droves. So I think it’s really important for employers to immediately take a look at that, and it may be that they need to enhance their coverage to make sure that… In all likelihood, they may have different attorneys. One attorney group would represent the employer, and then you might have a different attorney group representing the employee, but you want to make sure that your policy covers that.

Mike Coffey: Well, you and I both sit on a lot of boards, and we’ve served on stuff together. I won’t serve on a board that doesn’t have officers and directors’ liability insurance. I wonder if we’re going to see manager, supervisor liability insurance programs or something like that pop up. I mean, I’m not sure if these cases begin to be… If they become pretty prolific, I’m not sure that I would want to be a supervisor or a manager in a world where anybody can make a claim and push for a settlement, or I have to go get an attorney and defend it. I mean, it just seems like a really low bar.

Julie Ross: When you think about it, employers often settle lawsuits because it’s a nuisance value. For an individual supervisor, it’s going to be expensive to defend, but they may not have the cash just to settle something for a nuisance value.

And maybe that supervisors need to look at their umbrella policies or personal umbrella policies to make sure that if they are sued, but I think we might see something in offer letters that go out now to supervisors, that we have all these benefits, including this insurance coverage that will protect you if you’re… Because I agree with you. Being a supervisor has enough headaches without being sued, and have to pay for a personal lawyer, and all that to defend me.

Mike Coffey: So in your sexual harassment training, I mean, you mentioned some of the stuff. What is a good sexual harassment training that really helps prevent the abusive bad behavior, but also protects the company? What are some components of that? What’s the main message you’re giving?

Julie Ross: Well, everything I read says, “It needs to be in-person training,” and I think smaller groups are better, just because you can get a conversation going, people feel maybe freer to ask questions, and you get a lot of resistance to some of these things. And I think it’s important for employees to be able to vocalize that, so you can address their concerns, and kind of one on one to the extent you can, but I don’t know that training is really any different. I think training every year is important, and when I do my training, I tell folks, “Hey, I’m here for two hours or three hours max, and it’s really important that when I leave that this should just be start of the conversation.”

And supervisors need to be following up at least monthly with their employees. Directors need to be following up with supervisors, and it just needs to be an ongoing conversation, not a one and done once a year, but I think I’ve really been able to get people’s attention. These supervisors, when you talk about personal individual liability, so I find that perhaps are listening a lot more closely than they have in the past, just because this awareness of this new law that went into effect on September 1st.

Mike Coffey: Well, the idea of individual liability has got to make a big difference to at least for those supervisors who aren’t really intentional in their efforts to sexually harass somebody, but they’re just kind of knuckleheads, and just kind of like that light feeling in the office, and we can joke around, and we can all be guys here. After the first one or two of those cases come down, where a manager in that kind of environment, not Harvey Weinstein, but somebody who’s just a good old boy takes a hit, then that’ll probably be a wake up call.

Julie Ross: I would hope so.

Mike Coffey: Yeesh.

Julie Ross: Yeah. I would’ve thought that five or 10 years ago too.

Mike Coffey: Yeah. Well, especially after the last few years.

Julie Ross: Stuff still happens.

Mike Coffey: Yeah. And it’s in everybody’s interested that it stop, obviously. Well, anything else you think employers ought to do to protect themselves besides the training?

Julie Ross: Sure. I mean, I think there’s some really easy and obvious ones. Pull out your harassment policy, and make sure it specifically covers sexual harassment. I know there’s still some policies out there that only cover sexual harassment. Your harassment and the EEO policy, I tend to combine those, because I like they have the same reporting requirements. If this is going on, you need to report it to X, Y, or Z person, and make sure that the policy doesn’t say that the employee has to report it to their supervisor. Oftentimes it is the supervisor who is the sexual harasser or the other harasser, and so you want to give the… And also, I just don’t think that especially lower-level supervisors have had adequate training to even recognize potentially when a complaint comes in.

So I like to limit it really to somebody in HR, or the department director, maybe some other high level high ranking person, but review and a update that policy, and have employees acknowledge in writing that they’ve received it. And there’s some tweaking that needs to go on in most policies to make them compliant with this new Texas law. And again, we talked about these small employers who may never have had a harassment policy. They need to adopt one at the least for sexual harassment, because they’re covered for sexual harassment, and I think that the 15 number still only covers for sexual harassment. If you’re over 15, that’s when the other protected categories come into play, race, religion, national origin, those kinds of things. But a lot of those are going to be owners, and a lot of times we see it’s the owner, him or herself, who is the harasser.

So they need to be aware that it may not be the company like the Harvey Weinstein company who is going to write the check to the agreed party, but it could be Harvey Weinstein or the owner of the company, him or herself. And I think it’s really important that employers do this training, and make sure that supervisors and managers are acutely aware that these changes have gone on, and that there may be personal liability, and make the training mandatory, and make employees sign in, make them print their name, their signature, and the date. I still see so many times where an employee will sign something, and nobody knows whose signature that is, because nobody can read it. And if you’re training 100 people, we don’t know who that is.

Mike Coffey: Lord help you.

Julie Ross: Yeah.

Mike Coffey: Lord help you if it’s a medical practice. Right?

Julie Ross: Right, right. Right. So then, and I think you kind of mentioned this point, but we need to adopt processes and procedures to make sure that we are responding immediately to these things. If somebody in HR is out of town, or if a supervisor in another department is out of town, who is their stand in? Who is fielding these calls and complaints that may be coming in, so that we are excuse for not responding promptly is, “Oh, that person was out of town, and nobody checked the email,”?

So we need to have somebody who can jump in, and with the investigation, whether it’s internal or external, make sure that we can’t wait around for somebody to return our phone call, or to wait for them to be available. We need to have two or three people in our Rolodex that we can call to jump in on that.

And then, basically, make sure that employers know and supervisors that they got to stop the conduct. If this stuff is going on, and they see it, they don’t run off and put out the other hot potato thing going on. They make sure they stop the conduct. And also, I think another way to address this is to make sure that job descriptions for your supervisors have one of those essential job description bullet points, “It’s an essential function of the job to timely and appropriately respond to sexual harassment complaints.” So just make that a part of their job description across the board, so that they recognize that’s one of their job duties.

Mike Coffey: Cool. Well that’s all the time we have, but unfortunately, I don’t doubt that somebody in the near future going to be Googling, “How do I respond to this sexual harassment complaint at my company,” and come across this podcast. So Julie’s contact information will be in the show notes and at Good Morning, HR. So anybody who’s listening to this now or in the near future will be able to reach the law firm of Ross | Gannaway to get help there. And thank you, listeners, for listening.

You can find previous episodes, show notes, and contact info for our guests at goodmorninghr.com, or on Facebook, Instagram, and YouTube. And don’t forget to follow us wherever you get your podcast.

Rob Upchurch is our technical producer and Imperative’s marketing coordinator, Katy Bautista keeps the trains running on time, and I’m Mike Coffey. As always, don’t hesitate to reach out, if I can be of service to you professionally or personally. In the meantime, do good, be well, keep your chin up.