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A Texas Supreme Court ruling that says a worker can pursue an assault claim, rather than a sexual harassment claim, against her former employer in an alleged sexual attack by her supervisor will make it more difficult for employers to defend these types of claims, an expert says.
The Texas Supreme Court overturned a lower court ruling and held a Steak ’n Shake restaurant worker who was sexually assaulted by her supervisor in a one-time incident can sue the restaurant chain for assault, which has no liability cap, rather than be required to litigate under the Texas Human Rights Commission Act, which has a $300,00 cap, says the Texas Supreme Court, in overturning a lower court ruling.
The THRCA, which was modelled after Title VII of the Civil Rights Act of 1964, does not pre-empt a plaintiff’s common law assault claim when the essence of a plaintiff’s case is not harassment, but rather assault, said a unanimous court in its Feb. 24 ruling in B.C., Petitioner, vs. Steak N Shake Operations Inc., which was publicized this week.
The ruling “was very much a pro-employee decision and one that I think caught most employment counsel on the defense docket by surprise,” said Robert Kilgore, of counsel at Fisher Phillips L.L.P. in San Antonio, who was not involved in the case.
It “really opens the door to a lot of other inquiries that need to be made, so instead of having a bright-line test like we thought we had before this decision was rendered,” that bright line is now blurred, Mr. Kilgore said.
B.C., who had worked as an associate at Steak ‘n Shake’s Frisco, Texas restaurant, charged she was sexually assaulted by her supervisor during an overnight shift on company property in October 2011, according to the ruling.
After an investigation, the supervisor was not terminated by the Indianapolis-based company, but transferred to another location. The company offered to return B.C. to work at any location, but she decided instead to terminate her employment.
B.C. later sued Steak N Shake and her supervisor on several charges, including assault. A trial court granted the company summary judgment dismissing the case, and a court of appeals in Dallas affirmed the trial court’s ruling on the basis the THCRA preempted her claim.
The TCHRA does not apply, said the court. “While civil remedies against individual assailants have long existed under Texas common law, the TCHRA is a statutory scheme created to provide a claim for individuals against their employers for tolerating or fostering a workplace that subjects their employers to discrimination in the form of harassment,” said the ruling.
The “public policy it advances is wholly inapposite to claims against individual assailants,” it said. The Texas legislature “did not intend for individual assailants to receive, among other benefits, statutorily-capped damages and predictability for their employers simply because those assaults occurred in the workplace and not elsewhere.
“We are not compelled to apply different reasoning when the employer, in legal effect, is the assailant.”
B.C. “does not allege that Steak N Shake is liable for fostering or tolerating a hostile work environment, a wrong the TCHRA was intended to remedy,” the ruling said.
What she does allege is she was sexually assaulted on a single occasion without warning or prior incident, said the court, in remanding the case for further proceedings.
Mr. Kilgore said the ruling will result in plaintiffs counsel asserting assault and battery claims in addition to sexual harassment claims, at least at the initial part of the lawsuit, “because those kinds of allegations are a lot more explosive, a lot more emotional, but also because damages for those types of torts are not subject to damage caps in Texas.”
These claims will also create many ancillary issues, including whether the conduct occurred in the scope and the during course of employment, with defense attorneys trying to demonstrate the alleged perpetrator acted outside his authority, said Mr. Kilgore.
“You might even have employers in Texas clarifying their policies that sexual misconduct, sexual assaults in general, is never acceptable,” he said. “You want to destroy any semblance of even apparent authority that supervisors have” to conduct this kind of activity, Mr. Kilgore said.
An employer that provided a job applicant with a background check disclosure and consent form at the same time as a liability waiver violated the Fair Credit Reporting Act, says the first appellate court ruling on this issue.