Our firm has recently blogged about Senate Bill 45 and its potential impact on sexual harassment claims in Texas. This blog addresses a collateral issue that employees should consider when filing their sexual harassment lawsuits.
Senate Bill 45 and Expanded Individual Liability
After September 1, 2021, supervisors, managers, human resources professionals, other employees, and third parties may be named individually as defendants in an employee’s sexual harassment complaint and held personally liable for damages. This is welcome news for employees wishing to hold individuals, and not just their employer, liable for unlawful conduct.
Diversity Implications with Multiple Joined Defendants
However, employees should be aware this could potentially foreclose an employer’s ability to remove a sexual harassment lawsuit to federal court (often viewed as more favorable for employers than state courts) given that the parties would no longer have diversity of jurisdiction. If a non-diverse supervisor, human resources professional, or other employee (a Texas resident) is added as a defendant to the lawsuit, the employer cannot then remove to federal court based on the diversity of the parties, as complete diversity of all parties is required.
An Overview of Snap Removal
Employers may therefore resort to a process known as “snap removal” to remove the case to federal court on diversity grounds before the defendant is served. Snap removal takes advantage of the plain language of the “forum defendant rule” in the removal statute, which states a suit that is “otherwise removable solely on the basis of [diversity of citizenship] may not be removed if any of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought.” 28 U.S.C. Section 1441(b)(2). Thus, the technique allows an employer to remove a case to federal court on diversity grounds after the suit is filed in state court, but before the forum defendant is served.
The Fifth Circuit's View of Snap Removal
The Fifth Circuit, in which Texas belongs, has recently approved of snap removal by a non-forum defendant. Texas Brine Co. v. American Arbitration Ass’n, 955 F.3d 482 (5th Cir. 2020). It is unclear whether the Fifth Circuit would uphold the practice with respect to forum defendants.
Guidance for Employees Under the New Law
Going forward, the best practice for employees concerned about snap removal when joining multiple defendants may be to sue the resident defendant (so diversity does not entitle an employer to remove to federal court) and then amend to include the non-resident employer after service on the resident has been effected, thus eliminating the option entirely.
However, not every employee may be concerned with removal to federal court, and indeed some employees may actually prefer to litigate in federal court depending on the unique circumstances of their case. Choice of venue can play a pivotal role in an employee’s lawsuit, so these issues should all be discussed with a competent employment attorney intimately familiar with the advantages and disadvantages of bringing a particular suit to state or federal court.
However, not every employee may be concerned with removal to federal court, and indeed some employees may actually prefer to litigate in federal court depending on the unique circumstances of their case. Choice of venue can play a pivotal role in an employee’s lawsuit, so these issues should all be discussed with a competent employment attorney intimately familiar with the advantages and disadvantages of bringing a particular suit to state or federal court.
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