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When Is Your Employer Liable for Sexual Harassment in Texas?

Not all workplace sexual harassment automatically makes your employer legally responsible. Texas law uses different liability standards depending on who committed the harassment and what your employer knew or should have known about it.

Understanding when your employer can be held liable is critical to your case. This guide explains the specific legal standards Texas and federal courts apply when determining employer responsibility for sexual harassment.

Why Employer Liability Matters

Sexual harassment is illegal under both Texas law (Texas Commission on Human Rights Act, or TCHRA) and federal law (Title VII). But proving harassment occurred is only half the battle. You must also prove your employer should be held responsible.

Employer liability matters because:

Individual harassers usually can’t be sued in Texas. Unlike states like New York, Texas law doesn’t allow you to sue the individual harasser personally under TCHRA or Title VII. You can only sue the employer.

The employer pays the damages. Even if your harasser is fired, you can only recover money from the employer if the employer is legally liable.

Liability standards affect your case strategy. Different standards apply to supervisor harassment versus coworker harassment. Understanding which standard applies helps you build a stronger case.

Employers have defenses. In some situations, employers can avoid liability even when harassment occurred. Knowing these defenses helps you understand your case’s strengths and weaknesses.

The Three Types of Harassment and Employer Liability

Texas courts analyze employer liability differently depending on who committed the harassment:

  1. Supervisor harassment – Highest employer liability
  2. Coworker harassment – Moderate employer liability (employer must have known or should have known)
  3. Third-party harassment – Lowest employer liability (very limited responsibility)

Each category has different legal standards.

Employer Liability for Supervisor Harassment

Supervisors are employees with authority to make or recommend employment decisions affecting you (hiring, firing, promoting, demoting, assigning work). When a supervisor sexually harasses you, your employer faces higher liability than for other types of harassment.

Quid Pro Quo Harassment: Automatic Employer Liability

When a supervisor conditions employment benefits on sexual favors, the employer is strictly liable. This means the employer is automatically responsible, with no defenses available.

Example: Your manager tells you that you’ll get the promotion if you go on a date with him. Your employer is automatically liable if you can prove this happened, regardless of whether they had a sexual harassment policy or training program.

This strict liability exists because supervisors act on behalf of the employer when they make decisions about your job. The law treats the supervisor’s discriminatory actions as the employer’s actions.

Hostile Environment by Supervisor: Faragher-Ellerth Defense

When a supervisor creates a hostile work environment but doesn’t take tangible employment action against you (like firing or demotion), your employer is presumptively liable. However, the employer can avoid liability by proving the Faragher-Ellerth affirmative defense.

To use this defense, your employer must prove two things:

  1. The employer exercised reasonable care to prevent and promptly correct harassment

    • Had an effective anti-harassment policy
    • Provided harassment training
    • Had a clear complaint procedure
    • Investigated complaints properly
    • Took appropriate corrective action

  2. You unreasonably failed to use the employer’s complaint procedure

    • You never reported the harassment through available channels
    • You unreasonably delayed reporting
    • You avoided using clear, accessible complaint procedures

Example: Your supervisor makes repeated sexual comments and touches your shoulder despite your objections. Your employer has a clear sexual harassment policy with a hotline you never called. You didn’t report the harassment until after you quit. Your employer may successfully use the Faragher-Ellerth defense because you didn’t use their complaint procedure.

Counter-example: Your supervisor sexually harasses you. You immediately report it to HR using the company’s complaint procedure. HR investigates but does nothing to stop the harassment. The Faragher-Ellerth defense fails because the employer didn’t take prompt corrective action after you reported.

What Counts as “Tangible Employment Action”?

If the supervisor harassment results in tangible employment action, the employer cannot use the Faragher-Ellerth defense. Tangible employment actions include:

  • Termination or constructive discharge
  • Demotion or denial of promotion
  • Significant pay reduction
  • Significant work assignment changes (especially if negative)
  • Unfavorable job transfers or relocations

Example: Your supervisor sexually harasses you for months. When you finally complain, he fires you. This is a tangible employment action. Your employer cannot use the Faragher-Ellerth defense and is strictly liable for the supervisor’s harassment and retaliatory termination.

Employer Liability for Coworker Harassment

When a coworker (someone without supervisory authority over you) sexually harasses you, your employer is liable only if the employer knew or should have known about the harassment and failed to take prompt, appropriate corrective action.

The “Knew or Should Have Known” Standard

This is a lower liability standard than supervisor harassment. You must prove:

1. Actual or Constructive Knowledge

The employer either:

  • Actually knew: Someone with authority was directly informed about the harassment
  • Should have known: The harassment was so obvious or pervasive that management should have discovered it

Example of actual knowledge: You tell your manager that a coworker is sexually harassing you. The employer now has actual knowledge.

Example of constructive knowledge: A coworker loudly makes sexual comments about you every day in an open office. Multiple people witness it. Managers walk by and can hear it. The employer “should have known” even if you never formally complained.

2. Failed to Take Prompt, Appropriate Corrective Action

After gaining knowledge, the employer must:

  • Investigate promptly – Not delay or ignore the complaint
  • Take action reasonably calculated to stop the harassment – Warning, discipline, separation, training
  • Follow through – Ensure the harassment actually stops

What “appropriate” action means depends on severity:

  • First-time inappropriate joke: Warning may be sufficient
  • Repeated sexual touching: Termination may be required
  • Severe harassment: Immediate separation pending investigation

When Employers Escape Liability for Coworker Harassment

You never reported it: If you never told anyone with authority about the harassment and there’s no way management should have known, the employer typically isn’t liable.

The employer took prompt, effective action: If the employer immediately investigated after you reported, disciplined the harasser appropriately, and the harassment stopped, the employer may not be liable for harassment that occurred before you reported.

Example: A coworker makes sexual comments to you three times over two months. You report it to your manager. The manager immediately investigates, issues a written warning to the coworker, separates your workspaces, and the harassment stops. The employer likely isn’t liable because they took prompt corrective action.

Counter-example: A coworker sexually touches you repeatedly. You report it to HR. HR says they’ll “look into it” but does nothing. The touching continues. The employer is liable because they failed to take prompt corrective action despite actual knowledge.

Employer Liability for Third-Party Harassment

Third parties are non-employees: customers, clients, vendors, contractors, delivery people. Employer liability for third-party harassment is very limited in Texas.

The High Bar for Third-Party Liability

Your employer is liable for third-party harassment only if:

  1. The employer knew or should have known about the harassment, AND
  2. The employer failed to take immediate and appropriate corrective action within its control

The key phrase is “within its control.” Employers have less control over third parties than over employees.

What employers must do:

  • Tell the third party to stop the harassing behavior
  • Limit the third party’s access to you when possible
  • End the business relationship if harassment continues (when feasible)

What employers usually don’t have to do:

  • Fire their customers or clients (though they should in egregious cases)
  • Fully eliminate all contact with harassing third parties in customer-facing roles

Example: A customer repeatedly makes sexual comments to you at a retail store. You report it to your manager. Your manager tells the customer to stop and offers to have other employees help the customer. If the customer returns and continues harassing you, your manager bans the customer from the store. The employer took appropriate action within its control.

Counter-example: A client sexually touches you at a business meeting. You report it to your boss. Your boss says “that’s just how he is” and sends you to future meetings with that client alone. The employer failed to take corrective action and may be liable.

Texas Reality for Service Workers

Texas has a large service industry where workers frequently interact with customers. Sexual harassment by customers is common, but employer liability is limited. Texas courts tend to be employer-friendly in third-party harassment cases.

Realistic expectations:

  • Retail workers, servers, and customer service employees face regular customer harassment
  • Employers often aren’t held liable unless they completely ignore complaints
  • Taking minimal action (asking the customer to stop) may be enough to avoid liability
  • Texas law doesn’t require employers to ban customers or end business relationships in most cases

This means many service workers endure customer harassment without legal recourse against their employer.

Employer Size and Damages in Texas

The size of your employer affects both coverage and potential damages:

Coverage Thresholds

Title VII (federal): Applies to employers with 15 or more employees for at least 20 weeks in the current or previous year.

TCHRA (Texas state): Applies to employers with 15 or more employees for at least 20 weeks in the current or previous year.

If your employer has fewer than 15 employees, you have no legal recourse under TCHRA or Title VII for sexual harassment in Texas. Unlike California (5+ employees) or New York (4+ employees), Texas provides no state law protection for workers at small companies.

Damage Caps Based on Employer Size

Even when you win, the amount you can recover is capped based on employer size:

Employer Size Maximum Compensatory + Punitive Damages
15-100 employees $50,000
101-200 employees $100,000
201-500 employees $200,000
501+ employees $300,000

These caps apply to combined compensatory and punitive damages. Back pay, front pay, and attorney’s fees are not capped.

What this means: Even in the most egregious cases, you can recover a maximum of $300,000 in compensatory and punitive damages in Texas (plus uncapped back pay and attorney’s fees). Compare this to California, which has no damage caps under FEHA.

No Individual Liability in Texas

Unlike New York’s Human Rights Law, Texas law does not allow you to sue individual harassers or supervisors personally under TCHRA or Title VII. You can only sue the employer.

This means:

  • The harasser faces no personal financial liability
  • The harasser might be fired but won’t pay you damages
  • Only the employer pays if you win
  • Individual harassers have less personal financial deterrent

You can potentially sue an individual harasser under other legal theories (assault, battery, intentional infliction of emotional distress), but these claims are much harder to prove and rarely succeed in Texas courts.

How to Prove Employer Liability

To hold your employer liable for sexual harassment in Texas, you need evidence showing:

1. The harassment occurred and was based on sex

  • Harasser’s statements, actions, emails, texts
  • Witness testimony
  • Your contemporaneous notes and documentation

2. The harasser’s relationship to your employer

  • Supervisor: Higher employer liability
  • Coworker: Need to prove employer knowledge
  • Third party: Need to prove employer knowledge and failure to act

3. Your employer’s knowledge (for coworker/third-party harassment)

  • Evidence you reported the harassment (emails to HR, written complaints)
  • Evidence management witnessed or should have discovered the harassment
  • Other employees’ complaints about the same harasser

4. Your employer’s inadequate response

  • No investigation or delayed investigation
  • No discipline or inadequate discipline
  • Harassment continued after you reported it
  • Retaliation against you for complaining

5. Damages you suffered

  • Lost wages if you were fired or quit
  • Emotional distress (therapy records, medical treatment)
  • Damage to reputation or career

Common Employer Defenses in Texas

Texas employers frequently use these defenses to avoid liability:

“We had a policy and the employee didn’t use it” – The Faragher-Ellerth defense for supervisor hostile environment cases.

“We didn’t know about it” – For coworker harassment, arguing they had no actual or constructive knowledge.

“We took prompt action” – Showing they investigated and disciplined the harasser after learning about it.

“The employee’s complaints were vague” – Arguing they didn’t know the conduct rose to the level of illegal harassment.

“The harassment wasn’t severe or pervasive” – Arguing the conduct doesn’t meet the legal standard for hostile environment.

“The employee is lying or exaggerating” – Attacking your credibility (sadly common and often effective in Texas).

Texas courts tend to be sympathetic to these employer defenses, making it harder to win harassment cases compared to states like California or New York.

Related Topics

Understanding employer liability is crucial to your sexual harassment case. If you believe your employer should be held responsible for harassment you’ve experienced, consult a Texas employment lawyer who can evaluate the specific liability standards that apply to your situation and help you build the strongest possible case.

Legal Disclaimer

This article provides general information about employer liability for sexual harassment in Texas and should not be construed as legal advice. Employment law is complex and fact-specific. The information presented here may not apply to your specific situation.

If you have experienced sexual harassment, consult with a qualified Texas employment attorney who can evaluate your individual circumstances and provide personalized legal advice. Nothing in this article creates an attorney-client relationship.

Sources:

  • Title VII of the Civil Rights Act of 1964
  • Texas Commission on Human Rights Act (Texas Labor Code Chapter 21)
  • Equal Employment Opportunity Commission (eeoc.gov)
  • Texas Workforce Commission Civil Rights Division (twc.texas.gov)
  • Burlington Industries, Inc. v. Ellerth, 524 U.S. 742 (1998)
  • Faragher v. City of Boca Raton, 524 U.S. 775 (1998)