Amended Sexual Harassment Laws in Texas
Prior to 2021, sexual harassment claims against employers in Texas were quite limited. Newly enacted laws in 2021 expanded protections for employees asserting sexual harassment claims. Almost all employers may now face liability for these types of claims, including employers with only one employee. Specifically, under the 2021Texas Commission on Human Rights Act (TCHRA) amendments, an “employer” is “a person who employs one or more employees or acts directly in the interests of an employer in relation to an employee.” Section 21.141 Texas Labor Code.
Acts of Sexual Harassment as Defined in TCHRA
Sexual harassment can take form in many ways. Generally, sexual harassment is unwelcome behavior rooted in a sexual nature. As defined in Section 21.141(2), this unwanted behavior is a sexual advance or request for a sexual favor, or other acts whether verbal or physical of sexual nature which affect the terms, conditions, or privileges of an employee’s employment. Whether explicitly or implicitly, sexual harassment can be found in numerous forms. This is true even where an employee has submitted to or rejected the sexual advance, request, or favor.
Staffing Agency Liability
Well, what does this mean for staffing agencies and how does liability attach? The inquiry to assess staffing agency liability for sexual harassment claims is whether the staffing agency is an employer for TCHRA purposes. The answer lies within chapters 21 and 91 of the Texas Labor Code. A staffing agency may qualify as a professional employment organization (PEO). As a PEO, a staffing agency can also qualify as a co-employer where the staffing agency is a “party to a co-employment relationship.” Section 91.001(3-a) Texas Labor Code.
There is a recent state court case which casts light on the distinction. In Harbor America Central, Inc. v. Armand, the court held that a “professional employer organization” (PEO), can be an “employer” appropriately named in an action under the TCHRA (which is Chapter 21 specifically of the Texas Labor Code). Harbor America Central, Inc. v. Armand, ___ S.W.3d ___, 2024 WL 1289596 (Tex. App.—San Antonio March 27, 2024). However, the inquiry does not end here. To be liable as an employer under Chapter 21, the staffing agency/PEO must still satisfy the definition of an employer under Chapter 21 and be an employer of the claimant. In this case, there was no dispute that the PEO qualified as an employer under Chapter 21 because it was engaged in commerce and had more than 15 employees.
However, to be an employer liable to a claimant under Chapter 21 the employer must have an employment relationship with the claimant. In this sexual harassment case, the defendant staffing service’s contract with the client employer included multiple provisions suggesting the staffing service was a joint employer of the claimant-employee. This is where the joint employment liability theory lies present.
However, the court of appeals found that the district court erred in finding as a matter of law that the staffing service was the claimant’s employer. There were issues of fact regarding the staffing service’s control over the claimant and the economic realities of their relationship. As a result, the court of appeals remanded the case for additional proceedings.
In sum, staffing agencies may be held liable for sexual harassment claims. In order to be held liable, a claimant must prove that the staffing agency is considered an employer for purposes of the Texas Labor Code. The 2021 amendments to Chapter 21 of the Texas Labor Code, TCHRA, affords greater protections for employees. In the years to come, it’ll be interesting to see what other avenues of recourse employees may have against a non-traditional employer. While the 2021 amendments were a great step in the right direction, Texas laws are still generally employer friendly.
Was your employer made aware of your sexual harassment claim? An employer is liable for sexual harassment if it knows or should have known about the harassment and failed to act. Employers must take immediate and appropriate corrective action. Don’t hesitate to book a consultation with our firm to discuss your potential employment law claim.
Areyana N. Johnson is a Trial Attorney located in our Houston office of Wiley Wheeler, P.C. Additional employment law blogs from Ms. Johnson can be accessed here.