Texas Labor Code Chapter 21 and Title VII of the Civil Rights Act protect employees from employment discrimination based on sex or sexual harassment. With respect to private employers, both laws apply only where the employer has 15 or more employees, meaning employees of small businesses subject to sexual harassment have limited legal recourse.
​
Additionally, Texas law requires individuals complaining of discrimination, harassment, or retaliation to file a Charge of Discrimination within 180 days of the alleged conduct. Federal law has a similar requirement but a deadline of 300 days.

On March 25, 2021, the Texas legislature passed two bills subsequently signed into law by Governor Greg Abbott that change these requirements and add additional liability for employers facing claims of sexual harassment.

Slated to go into effect on September 1, 2021, Senate Bill 45 amended the Texas Labor Code to add a new subchapter allowing claims of sexual harassment against employers with as few as one employee. It further provides liability for those who act “directly in the interests of an employer in relation to an employee,” which may impose liability on managers and supervisors.

The changes contained in these two bills will apply to conduct occurring on or after September 1, 2021 and will certainly serve to benefit employees bringing claims of sexual harassment against managerial agents and small business employers.
​
What remains to be seen is what Texas courts will construe to be “immediate and appropriate” remedial action by the employer and the extent to which individual managers and supervisors can be held liable. Whether similar legislation will be passed in the near future to encompass other claims of discrimination or retaliation is also unclear.

Many employment contracts contain clauses whereby an employee agrees any and all disputes between the employee and the employer will be subject to binding arbitration before it can be taken through the court system.
 
An example of what the agreement may look like is below:
Any controversy, dispute or claim arising out of or relating to this [contract] or breach thereof shall first be settled through good faith negotiation [OR company employment program] [other]. If the dispute cannot be settled through negotiation [OR company employment program] [other], the parties agree to attempt in good faith to settle the dispute by mediation administered by [arbitration service provider].
 
Employees confronted by this agreement may have concerns about the scope of these agreements.

Do they limit or prevent employees’ rights to form class action lawsuits?

Does a victim of sexual harassment in the workplace truly maintain substantive Title VII rights as Congress intended under such a clause?

The Federal Arbitration Act of 1925 (FAA) ensures that arbitration agreements contained in contracts involving maritime transactions or interstate commerce are “valid, enforceable, and irrevocable, save upon such grounds as exist at law or in equity for the renovation of any contract.”

The FAA thus empowers federal courts to grant a stay of litigation for any issue referable to arbitration under a valid arbitration agreement. Indeed, the Supreme Court has sought to ensure that the FAA’s authority is not usurped, for “[i]n enacting Section 2 of the federal Act, Congress declared a national policy favoring arbitration and withdrew the power of the states to require a judicial forum for the resolution of claims which the contracting parties agreed to resolve by arbitration.”
 
It is common for employers to draft agreements conditional on the signee’s consent to arbitrate any and all claims arising from their relationship with the employer, often impeding just for sexual assault survivors. More than half of American workers—56%—are subject to mandatory arbitration. 60 million Americans have signed such clauses.

​Should a signee refuse to surrender their Seventh Amendment right to trial by jury, she would likely be prohibited from entering the relationship at all. While employers argue these provisions are offered contingent on a consensual agreement to the terms, few employees have the luxury of turning down jobs when confronted with arbitration agreements - particularly given the pervasiveness of the practice.

To be clear, conditional arbitration clauses are not universally criticized and may provide benefits to some employees. Sometimes arbitration does make sense for both parties.

First, the relaxed rules of evidence and the greater control parties hold in the process can make it simpler, and perhaps more rewarding, for employees than litigation. While litigation requires strict compliance with formal procedures and can leave plaintiffs dissatisfied if their primary purpose was to feel heard, the opportunity for a sexual harassment victim to tell her story with less publicity and arguably more attention from the defendant can appeal to these victims.
 
This benefit has its tradeoff, though, where arbitration has almost none of the protections that fundamental fairness and due process usually require. Although an employee compelled to arbitrate may initially believe she is not giving up much in return for a relaxed setting with more opportunity to have her voice heard, the fact-finders in arbitration operate with almost none of the controls and safeguards of litigation.

There are other reasons why the arbitration process may harm employees as well.

First, employers often have arbitrators on retainer to rely on for many arbitration proceedings. It goes without saying that arbitrators on an employer’s payroll may be inclined to skew findings in the employer’s favor.
 
Second, there is less transparency to evaluate awards, so even prevailing employees may receive less in damages than they would have had they not been bound by the arbitration agreement.
 
Third, plaintiffs are prevented from joining in class actions, which is often the surest way to thrust employer misconduct into the public eye and compel employers to conform their behavior to the law. Without the ability to form class actions, individuals will likely not know the scope of employer misconduct and the extent to which the company may truly be liable, resulting in less actual change in company practices.
 
Lastly, arbitration can be incredibly costly despite the popular belief that arbitration avoids the costly expenses of litigation.
 
Thus, arbitration is not always in the best interests of an employee, which is why mandatory arbitration agreements are particularly troubling.

While seeking redress in the courtroom may pose its own challenges to an employee, the choice of forum for a particular grievance should be a consensual decision made by both parties and should not be the exclusive decision of an employer with more leverage. Not only do employers have the benefit of unequal bargaining power when entering into contractual relationships with employees, but courts today construe arbitration clauses incredibly liberally.
 
Broadly written arbitration clauses can include virtually all disputes with any connection to the initial infraction and their broad drafting can create a presumption that any dispute is subject to arbitration. Moreover, once a court has found an arbitration clause is valid, it will resolve any doubts as to the agreement’s scope in favor of arbitration.

A 2018 study by Namely of 500 employees across the country revealed 40 percent of employees have engaged in an intimate relationship with a coworker, and 5 percent of those occurred between a direct report and a manager. Less than 5 percent of workers would willingly notify HR about their workplace relationship.

There are no express federal regulations addressing workplace relationships apart from Title VII’s prohibition against sexual harassment, and most states similarly lack legislation on the subject, so employers are mostly free to create their own policies or to decide not to publish an official policy at all.
​
Texas, like most states, does not have laws addressing workplace relationships in the private sector. For government employees, the state constitution has been interpreted to implicitly create a “zone of privacy” on unwarranted governmental interference into individual autonomy, which requires the government to show any intrusion on an employee’s personal life and choices was reasonably warranted for the achievement of a compelling governmental objective that cannot be achieved by less intrusive, more reasonable means.
​
Personal autonomy is not boundless, however. For example, the Texas Supreme Court has determined that public employees do not have a privacy right to have an adulterous affair even when the behavior takes place away from work and within the employee’s theoretical zone of privacy. City of Sherman v. Henry, 928 S.W.2d 464 (1996).

Even when workplace relationships do not present legal issues, they can present other problems such as reducing morale and productivity (particularly where relationships lead to favoritism and preferential treatment).
​
Some employers choose to establish non-fraternization policies and consensual relationship agreements. Non-fraternization policies prohibit social relationships between employees, although usually centering on those between supervisors and subordinates. Consensual relationship agreements are written attestations signed by coworkers in romantic relationships that acknowledge their relationship is consensual and agree that a breakup will have no adverse impact on job performance or outcomes.

Employers do not have an unfettered right to prohibit workplace relationships, though. Courts have held that a threat to terminate employment due to a workplace romance violates public policy and may form the basis for a wrongful discharge claim. Williams v. Joe Lowther Ins. Agency, Inc., 177 P.3d 1018 (Mont. 2008).

​Employers that choose not to adopt a formal policy may subject themselves to liability for quid pro quo sexual harassment, hostile work environment, retaliation where a relationship goes south, and more.

An employee establishes quid pro quo sexual harassment under Title VII where they prove a supervisor because of sex subjected the employee to unwelcome conduct that affects a tangible aspect of the employment relationship.

​An employee establishes a hostile work environment where they prove the employee belongs to a protected class; was subject to unwelcome harassment based on her membership in the protected class; the harassment affected a term, condition, or privilege of her employment; and the employer knew or should have known of the harassment and failed to take prompt remedial action.

​An employee establishes retaliation where they prove the employer retaliated or discriminated against a person who opposes a discriminatory practice; makes or files a charge; files a complaint; or testifies, assists, or participates in any manner in an investigation, proceeding, or hearing. The employee must show she participated in a protected activity; the employer took an adverse employment action against her; and a causal connection existed between her protected activity and the adverse employment action.

Americans spend a significant amount of time at work, and by extension spend a lot of time with their supervisors and co-workers. Intimate relationships are likely to arise at some point in any workplace, so employers and employees alike have an interest in preparing for that possibility.

​Even a positive relationship can subject employers and employees to liability under various federal and state laws, and the Me Too movement has in part emphasized the dangers of such relationships, particularly between supervisors and direct reports, where the power imbalance can complicate, if not obliterate, consent.